The regulatory forecast has warned of increasing regulations and requirements over the last year, and those predictions are now coming to fruition.

The recently issued Memorandum of Understanding (MOU) between the National Credit Union Administration (NCUA) and the Consumer Financial Protection Bureau (CFPB) discusses the regulators’ plans to be more collaborative and consistent. This alignment of regulatory enforcement styles has already brought increased scrutiny to credit unions, as NCUA exams have become increasingly more detailed.

For credit unions offering mortgage services, this alignment between the NCUA and the CFPB further compounds the regulatory complexity and scrutiny of their institutions. In April 2021, the CFPB warned mortgage servicers that it would begin increasing its scrutiny of servicers’ handling of forbearance requests and loss mitigation efforts after those forbearances expire.

Although credit unions with less than $10 billion in assets are not subject to CFPB examination, they are not exempt from this increasing pressure. Nor should credit unions disregard the CFPB directives and guidelines, as their size only exempts these institutions from CFPB examination and not compliance (except for small servicer exemptions from the servicing rules).

Credit unions should proactively dive into policies, processes, procedures, and technologies to prepare for this changing regulatory environment. While quality control is most often associated with mortgage and/or consumer lending, multiple non-lending lines of business, such as deposits, can benefit from a robust quality control process.

Most often, individual lines of business utilize separate methods to track and communicate quality issues, with spreadsheets and emails being the most common. These methods are inefficient, unscalable, and risky.

ACES Quality Management is a one-stop shop for quality control, communication, reporting, and compliance. With ACES Quality Management & Control® software, credit unions can maintain quality and mitigate risk across lines of business and establish an enterprise-wide foundation of quality.

For Jenille Fairbanks, vice president of lending compliance at $13 billion asset Mountain America Credit Union in Sandy, Utah, ACES plays a key role in her organization’s ability to respond quickly and confidently to regulators’ inquiries.

“With ACES, we have greater insight into what's happening within our organization and the ability to justify what we're doing, provide documentation about what our second line functions are and how we are performing those,” Fairbanks noted. “When a regulator comes in and asks, ‘How do you know you're doing this?’ we have a tool that can help us drill into the specifics of tracking how those procedures followed and verifying that we have the appropriate controls in place.”

With ACES Flexible Audit Technology®, credit unions like Mountain America Credit Union can build strong quality control structures and narrow down their organizations’ risk appetites.

Read success stories or sign up for a demo.

AMANDA PHILLIPS is vice president of compliance at ACES Quality Management.