Tackling credit union compliance, operational challenges

With an eye on pressing compliance and operational challenges, America’s Credit Unions’ Operations Committee met for its second meeting of the year Thursday. The committee focuses on identifying challenges and recommending both advocacy and compliance solutions for America’s Credit Unions to pursue.

The Illinois Interchange Fee Prohibition Act (IFPA) was a significant focus of discussion during the meeting. The IFPA is set to take effect July 1 and would ban financial institutions from charging or receiving interchange fees in Illinois on the portion of a debit or credit card transaction attributable to tax or gratuity.

To assess impact, committee members from credit unions across the country are tracking how many transactions their members make in Illinois (including Chicago’s two large, international airports). They have already tracked hundreds of thousands of dollars of card transactions in Illinois each month, transactions that will be affected by the IFPA when it takes effect. 

A court upheld the law following a credit union challenge. America’s Credit Unions and the Illinois Credit Union League filed an appeal, maintaining that the IFPA remains contrary to federal law and illegally restricts financial institutions from receiving compensation for services provided. 

The meeting also featured an update on NCUA’s Deregulation Project, which has released 26 proposals in seven different rounds, with more to come. Comments on the current round are due to the NCUA March 30. Credit unions are encouraged to send their comments to America’s Credit Unions in advance of the agency deadlines, to help shape the organization’s comments using credit union feedback. 

The group also touched on the Financial Crimes Enforcement Network’s (FinCEN) modernization efforts, including the February order providing relief from the requirement to identify and verify beneficial owners at each account opening. 

With fraud top of mind for all credit unions, America’s Credit Unions shared the latest efforts, including its testimony earlier this month on the need for an all-of-government approach to empower credit unions to fight fraud.