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Compliance Outlook

Compliance Outlook. Policies Vs. Procedures. Policies vs. Procedures. When considering policies and procedures it is easily understood that both are essential in the guidance of credit union operations.

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Compliance Outlook

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  1. Compliance Outlook Policies Vs. Procedures

  2. Policies vs. Procedures When considering policies and procedures it is easily understood that both are essential in the guidance of credit union operations. Due to the similarities in the concepts for policies and procedures the two words are often used interchangeably, which is not correct. It is important to understand the difference between the two to understand how they affect the guidance and management of credit union activities.

  3. Policies vs. Procedures Policies contain the: Rules, Guidelines, and Strategic Goals of a credit union.

  4. Policies vs. Procedures • NCUA Examination Manual provides guidance that: • “The Board adopts policies to direct the credit union’s activities.” • “The board must provide a clear framework within which the CEO can operate and administer the credit union’s affairs. This includes setting forth the credit union’s business strategy in the business plan, investment and loan policies, capital planning, funds management, and risk management. The board must approve all major policies. Further, it should review and, if necessary, update those policies at least annually.”

  5. Policies vs. Procedures • NCUA Examination Manual provides guidance that: • Policies direct the credit unions activities; • The Board of Directors must approve all major policies; and • The Board should review and update policies on an annually basis.

  6. Policies vs. Procedures Policies include guidance for: • Administration, • Operations, • Accounting, • Security, • Asset liability management, • Investments, • Lending, and • Record retention.

  7. Policies vs. Procedures Procedures represent the process the credit union uses to implement policies. They are step by step instructions that provide credit union employees with the information they need to conduct daily credit union practices and operations.

  8. Policies vs. Procedures

  9. Policies vs. Procedures • Policy and Procedure differences: • Policies direct decision making, and procedures guide employee actions. • Policies are an integral part of a credit unions strategy, while procedures are the process that is followed to achieve strategic goals. • Policies are approved and instituted by the Board of Directors; procedures are created by management to assist employees in meeting operational requirements for the credit union.

  10. Policies vs. Procedures • NCUA Examination Manual: • “Operating policies and procedures establish management’s strategy for realizing the credit union’s goals, and they provide a basis for gauging performance.”

  11. Thank you for joining me for this review of Policies and Proceduers Stay Tuned… Shawn Wolbert, CIA, CUCE Director CU System Relations 101 S. Washington Square, Suite 900 Lansing, MI 48933-1703 (800) 262-6285 Ext. 486 (734) 658-5427 Mobile Follow me on Twitter – Shawn Wolbert @ Go2CUGuru

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