CU*Answers, a 100% credit union-owned core processor to nearly 200 credit unions nationwide, announced their second Cost of Compliance Contest will officially begin on January 1, 2015. The initial contest was held earlier in 2014 and set credit unions with the task of creating a template for measuring expenses related to compliance. Sponsored by its compliance division, AuditLink, entrants for the second contest must select one of the winning templates or create their own and submit a report that details how their credit union used the template to account for the cost of compliance, and whether that cost has placed a substantial financial burden on the credit union.
A total of $5,000 will be awarded to contest winners at the CU*Answers Annual Leadership Conference in June 2015. “This is the second of a two-part cooperative endeavor by CU*Answers to raise awareness throughout our industry of what this over-reaching regulatory environment is doing to both financial statements and the overall return to our members,” said Jim Vilker, VP and Leader of the AuditLink division. “Saying that the cost of compliance is killing our industry may be true, but without quantifying that cost it will fall on deaf ears.”
Randy Karnes, CU*Answers CEO, states, “If we are to really innovate on the cost of compliance and risk management as an industry we must move towards doing the hard work of tracking and tactically improving how we approach compliance. We must design a standard way of calculating the cost of compliance that sets our network and our vested hopes for our industry square in its sights. But how can we win this argument with our boards, examiners, members, auditors, and regulators without a way to prove this is the case?”
The three winners of the first content were announced at the November CEO Strategies conference and awarded $5,000 in total prizes. The winning templates were chosen as having the most comprehensive outline and offered the best tool set and methodology for others to use for the day-to-day accounting of compliance-related costs.
The next phase is putting these templates to use from an operational perspective and raising awareness in decision making rooms, Board of Directors, and ultimately regulatory bodies. “Just think if a credit union were taken to task on a lower than expected ROA and actually had the compliance expense divided by average asset ratio as a way to win the argument on the burden Washington has placed on a credit union,” says Vilker. “If every credit union in the country made this a standard accounting procedure, we as an industry could have the quantitative data to announce to our representatives in Washington that what they have created is an adverse environment that is killing the cooperative model.”
The contest is open to all network clients and ends on June 5th, 2015. To view the templates visit http://auditlink.cuanswers.com/