Sep 12 '19

Growth Through Compliance

Erin O'Hern
Erin O'Hern
Director of League Compliance Services
PolicyWorks

Every product and service at the credit union carries some degree of risk, how you comply with the regulations and mitigate your risk is always key to the long-term success of the product.

Erin O'Hern
Erin O'Hern
Director of League Compliance Services
PolicyWorks

Growth through serving more members of the community is a positive mission-aligned purpose but it requires a strong foundation in compliance. Just as a credit union should act in expanding any service or product it must first ensure it has considered the compliance implications and mitigated its risk where possible.

An important place to start from both a compliance and service perspective is taking the time to know and understand the members you hope to serve. Understanding the community and its individual culture will help a credit union identify how to reach those potential members and strengthen its policies and procedures.

For example, if the credit union’s community includes people that were born in another country and have immigrated to the United States, spending time to learn which countries potential members came from will allow a credit union to better understand how to market those products. That effort also pays off in mitigating compliance risk. By utilizing that same information staff can determine compliance best practices through training employees on typical forms of identification different consumers in the community may visit a branch with and other methods of verifying the identity of an individual to comply with account opening regulations.

Erin presenting at the Accelerate Financial Inclusion Workshop in Chicago, IL, June 2019.

Over the last year, PolicyWorks, Coopera, Inclusiv and Filene have teamed up to assist credit unions with expanding its current lending program to include members utilizing an Individual Taxpayer Identification Number (ITIN) to apply for loans. With many consumers that do not have a social security number but do have an ITIN needing financial services; credit unions can help.

Let’s look at the specific compliance considerations for ITIN lending. These considerations can be broken into a few main areas; account opening and loan process considerations.

Before embarking on ITIN lending credit unions should evaluate the strength of its Bank Secrecy Act (BSA) and Customer Identification program as well as its underwriting criteria, operational set-up and specific lending related regulations.

Every product and service at the credit union carries some degree of risk, how you comply with the regulations and mitigate your risk is always key to the long-term success of the product.

Serving the local community and learning from other credit unions are two of the many things credit unions do well. To interact with other credit unions interested in ITIN lending and to understand more about addressing and mitigating applicable compliance considerations, join the team at the final Accelerate Financial Inclusion workshop in Austin, TX on September 24-25. This FREE event will give you the practical and proven tools to drive financial inclusion in your community.

Access additional resources for ITIN Lending to help expand your lending programs.