Compliance Blog

Oct 17, 2007

FACT Act Final Rules Issued

Leave it to the FDIC to break big news for credit unions!  Yesterday, the FDIC approved two final rules that implement portions of the FACT Act - Affiliate Marketing and the "Red Flag" Guidelines and Change of Address Rules.  The rules are not available from NCUA yet, but the FDIC draft federal register notices both include NCUA's name.  Therefore, it is expected that the other financial regulators will follow suit in the near future.

Here's a link to the FDIC web page that includes links to the final rules.  (Scroll down to the Discussion Agenda section.)  The Affiliate Marketing Rule carries a mandatory compliance date of October 1, 2008.  The  Red Flags Guidelines and  Change of Address Rules?  November 1, 2008.  NAFCU is working on Regulatory Finals that will provide a detailed overview of the final rules.   Stay tuned.


Yesterday, NCUA issued prohibition orders against four individuals that prohibit them from participating in the affairs of any federally-insured financial institutions.  In other words, they shouldn't get hired by your credit union.  In other words, you may want to pass this link along to your HR department. 


Yesterday, the Compliance Guy kicked back and absorbed a bunch of ACH-related compliance information at NAFCU's Track II  Compliance Program.  Experts from NACHA and SWACHA spent the day drilling useful information into eager minds.  Of note:

  • NCUA examiners have been alerted to the requirement regarding the RDFI's responsibility to perform an annual audit.  They very well may ask to see a copy.
  • One of the more common mistakes by RFDIs involves failing to use the proper code to contest a dishonored return.   Should staff treat a dishonored return as just another ACH entry, vital rights may be lost.  While dishonored returns can be contested, failure to use the right codes can be costly.