Newsroom

July 23, 2014 – NAFCU Executive Vice President and COO Anthony Demangone discussed the "big three" issues facing directors and supervisors of credit unions on Tuesday – fiduciary duty, the Bank Secrecy Act and interest-rate risk – during an afternoon session at NAFCU's Annual Conference.

Demangone opened his presentation with a look at fiduciary duties. He said credit union volunteers are faced with two major duties: duty of care and duty of loyalty. While discussing duty of loyalty, Demangone told attendees, especially those serving as board directors, to "put the interest of the credit union above your own. We all have vices, we all have ways we like to do things, but duty of loyalty says you put that aside and ask, ‘Is this in the best interest of the credit union?'" he said.

The next subject up was the Bank Secrecy Act. Demangone said credit unions need to be aware of the BSA framework and its requirements. He said credit unions should especially be aware of money laundering, mortgage fraud, check kiting, identity theft, computer intrusion and credit card fraud within their operations. He asked attendees, on a scale of 1 to 10, to rate how well they understand their BSA risks.

The third and final topic Demangone discussed was interest-rate risk. He told attendees that at some point interest rates are going to rise and explained NCUA's expectations in that event. He discussed NCUA's supervisory focus on interest-rate risk and noted that in 2012 the agency began requiring certain credit to have a written policy on interest rate risk management. "You can never eliminate risk; you have to manage risk," Demangone said.

NAFCU's Annual Conference and Solutions Expo runs through Friday in Las Vegas. Stay up to date on the conference by downloading NAFCU's mobile app.