Regulatory Compliance Comes to the Forefront

The last few weeks, I've spent more time than I'd like to think reading new regulations. I started with an appetizer the new HUD regulations dealing with RESPA. Then I moved on to a second course of Unfair and Deceptive Acts and Practices rules and a main course of final Regulation Z rules on open-end lending dealing with credit card regulations and multi-featured open-end lending. I had a dessert of proposed changes to Reg Z for mortgage disclosures. It was, well, quite a meal.

I worked through these regulations, trying to understand how the rules were meant to work, and how they succeeded in meeting the expressed goals of the particular regulator. In some cases, they did a pretty good job at all these tasks, some not so good. I'll comment on these attempts in a later posting. What came more and more to mind was the new importance and prominence of regulatory compliance in a post banking meltdown world.

Compliance has always been, in my perception, something that's been viewed as a royal pain by most credit union staff. In many cases, it's been seen as obstructing credit unions from carrying out processes or strategies, a joke, an irritant. Times are different now.

One aspect of the banking meltdown most people agree on is that lack of regulation was a cause of of the problems we now face. To reduce the likelihood of a reccurance of the problems in the financial services industry happening again, we all face more regulation. No longer can we view it as a joke or an irritant. Now, we need to be serious about compliance.