Ten Steps for Strong Policies

Policymaking can seem more overwhelming than the regulatory changes that require it.

December 9, 2011

Strong policies and procedures are like life preservers for credit unions struggling in the turbulence of today’s regulatory climate. Stick by them, and you’ll stay afloat.

Yet, policymaking itself can seem even more overwhelming than the regulatory changes that make it necessary. This is particularly true for smaller credit unions that lack the resources or dedicated compliance personnel.

For that reason, many credit unions will choose to utilize sample policies from trusted sources, such as regulatory consultants or fellow credit unions.

However, there are certain steps that must not be skipped when tailoring existing policies to fit your credit union.

Follow these 10 simple steps to give your policymaking program the greatest chance for success.

1. Cross every ‘T’

Jami Weems
Jami Weems is the senior compliance officer for PolicyWorks.

If you’re using a sample policy, take the time to scan the document for things like the credit union’s name, location, and other information specific to the credit union.

It sounds like a no-brainer, but when overwhelmed staff are rushed, these kinds of mistakes can happen.

Nothing signals a lack of commitment to compliance more than a policy manual filled with the wrong credit union’s name.

2. Don’t name names

Particularly when it comes to policies, credit unions can get tripped up by examiners who come across the name of a former employee in what’s supposed to be a current document.

Whenever possible, stick to job titles or functions when drafting and updating your policies.

3. Call the meeting to order

After going to all the hard work of policymaking, credit unions can easily overlook a last necessary step—board approval.

Be sure to send any new or updated policy by your board of directors for a vote.

4. Spread the word

After you’ve finalized your policies (and received board approval), you have to implement them. A key component of doing so is communicating the policies and procedures to staff.

Make them accessible on a shared network or create printed copies for integral personnel. That’s what examiners want to see.

5. Show, don’t tell

Making policies available to staff is one thing. Truly educating them on an individual basis is quite another.

Management must ensure that new or updated policies are understood by the personnel responsible for implementing them and that there are no lingering or unspoken concerns with the changes.

Next: Jump on the express

6. Jump on the express

Communications such as NCUA’s Letters to Credit Unions are a vital resource for any credit union’s policymaking effort.

That’s because they may provide clarifying information about specific regulations, express concerns about compliance, issue warnings, or announce rule changes that will impact your policies and procedures.

Require each of your department heads to sign up for NCUA Express by visiting This service will send NCUA communications, such as Letters to Credit Unions and Regulatory Alerts, directly to the inboxes of your staff, so there will not be an excuse that they didn’t receive them.

7. Use an examiner resource

Another tool set to aid in your policy construction: NCUA AIRES questionnaires. These will provide some insight into what examiners will look for as they review various policies and procedures.

You can access these publically available documents on the agency’s website.

8. Schedule an annual check-up

Just as your doctor recommends you see him or her at least once each year, so too, does NCUA recommend you schedule an annual check-up for your policies. In many cases, the agency isn’t recommending it—they’re requiring it.

NCUA mandates that credit unions review all incentive bonus, investment, member business lending, and security policies annually.

For all other major policies, the NCUA cites annual reviews as a best practice for safety and soundness.

9. Document, document, document

A simple scan of the language during a board meeting may be all your credit union must do to review a policy. There may not be any necessary changes or updates.

Be sure, however, that even these minor reviews are documented in board meeting minutes and inside the policy itself. Add review dates to the policy headers and add the updated documents to your policy manual and/or shared network.

10. Don’t wait to be told

Examiners operate under the premise that credit unions have no excuse for not being informed of the current rules and regulations. For this reason, they expect all policies and procedures to exist and to be up-to-date.

Don’t wait to be told your credit union is a missing a policy—unless, of course, you enjoy frequent visits from your friendly examiner.

JAMI WEEMS is senior compliance officer for PolicyWorks LLC and a frequent contributor to