Washington State Launches Consumer Compliance Exam Initiative
The Washington Department of Financial Institutions, Division of Credit Unions, has moved forward with a new initiative to conduct separate consumer compliance examinations on its state chartered credit union with assets in excess of $500 million. The Division of Credit Unions has always examined for federal consumer protection and regulatory compliance as part of its safety and soundness examination. The new initiative separates those examinations for the largest state chartered credit unions. For all other state charters, the Division will continue to examine for consumer compliance as part of the safety and soundness exam.
The Division of Credit Unions believes a separate compliance examination and report will provide more effective communication with the largest credit unions to better protect consumers, and will reduce potential liability and fines at those credit unions. The Division chose the $500 million threshold as a practical resource matter: it has the resources to conduct about 16 stand alone consumer compliance exams each year.
The Division's initiative comes at a time when many states and NCUA consider what changes might be needed to how consumer compliance is supervised post The Dodd-Frank Act and the creation of the Consumer Financial Protection Bureau (CFPB).
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