A Web-Based Compliance Management and Tracking Solution
Vol. 4, No. 1
Introduction & Client Exports
ComplySight Area Focus
ComplySight Webinar Schedule
Closing Comments from Glory
Introduction and New Factor Selection Screens!
As usual, 2017 started off with a blast! Credit unions were scrambling in the last months of 2016 to get prepared to comply with the NCUA’s revised Member Business Lending rules that became effective on January 1, 2017.
No doubt, the end of next year will be the same scramble as credit unions try to prepare for their compliance with the CFPB’s new Home Mortgage Disclosure Act rules, most of which become effective on January 1, 2018. However, we do have some exciting stuff happening in the middle of all of this! Let’s make sure your credit union is planning ahead:
As we did with the MBL revisions, we will do our best to publish our “proposed” content for the amendments prior to the effective date to assist credit unions with compliance!
If you haven’t noticed it already, we made a pretty significant enhancement to ComplySight that allows our users to navigate within the Factor Selection screen more easily! Remember that pesky drop-down menu? It’s GONE! Now our users can see all of the Areas within ComplySight right on the screen.
Now you can go straight to a Factor directly from the screen. Just click on the arrow next to the Area or Item to expand your selection to see all of the associated Factors.
Did you click on the wrong Factor and want to go back to the Factor or Item listing? We’ve also added a “breadcrumb” at the top of the Factor Grading screen to make it easier for our users to move around!
Want to dive a little deeper? Check out our newest Webinar that walks your credit union through the Factor Selection Navigation process.
|ComplySight Area/Item Focus
Area/Item Focus: Bank Secrecy Act / Member Due Diligence
**In order to assist credit unions to comply with the new FinCEN Customer Due Diligence requirements for Legal Entity members, we have already populated the content within ComplySight even though the mandatory compliance date isn’t until May 11, 2018!
The cornerstone of a strong BSA/AML compliance program is the adoption and implementation of comprehensive Member Due Diligence policies, procedures, and processes for all members, particularly those that present a high risk for money laundering and terrorist financing.
The objective of Member Due Diligence should be to enable the credit union to predict with relative certainty the types of transactions in which a member is likely to engage. These processes assist the credit union in determining when transactions are potentially suspicious.
Credit union Member Due Diligence policies:
- Are commensurate with the credit union's BSA/AML risk profile, paying particular attention to higher-risk members.
- Contain a clear statement of management's overall expectations and establish specific staff responsibilities, including who is responsible for reviewing or approving changes to a member's risk rating or profile, as applicable.
- Ensure that the credit union possesses sufficient member information to implement an effective suspicious activity monitoring system.
- Provide guidance for documenting analysis associated with the due diligence process, including guidance for resolving issues when insufficient or inaccurate information is obtained.
- Ensure the credit union maintains current member information.
- Credit union obtains information at account opening sufficient to develop an understanding of normal and expected activity for the member's occupation or business operations as defined in the Member Identification Program.
- Credit union has a process for differentiating between lower-risk and higher-risk members at account opening.
- Credit union has a process for regularly monitoring lower-risk and higher-risk members, reassessing the member risk rating, and documenting all rating changes.
- Credit union has identified the means by which due diligence information will be collected on prospective members such as:
- Through an information reporting agency;
- References from other financial institutions;
- Correspondence and telephone conversations with the member; and
- Visits to the member's place of business.
- Credit union procedures include Enhanced Due Diligence for higher-risk members and has included a review of the following items during account opening:
- Purpose of the account;
- Source of funds;
- Individuals with ownership or control over the account;
- Occupation or type of business;
- Financial statements;
- Where the business is organized;
- Proximity of the member's residence, place of employment, or place of business to the credit union;
- Primary trade area;
- Volume of currency and total sales;
- Major customers and suppliers; and
- Changes in account activity.
Procedures to Identify Beneficial Owners
The credit union has written procedures in place to identify and verify the beneficial owners of legal entity members.
Procedures will address:
- Identification of the beneficial owners of each legal entity member at the time a new account is opened by having the individual opening the account complete either the certification form included in regulation or by obtaining the information required by the form in another means, provided the individual certifies that to the best of their knowledge the information is accurate.
- Verification of the identity of each beneficial owner identified, consistent with the credit union’s Customer/Member Identification Program (CIP/MIP).**
Credit unions are exempt from the requirements to identify and verify the identity of beneficial owners ONLY for accounts opened for the legal entities that:
- Are at the point-of-sale to provide credit products, including commercial private label credit cards, solely for the purchase of retail goods and/or services at those retailers, up to a limit of $50,000;
- To finance the purchase of postage and for which payments are remitted directly by the credit union to the provider of the postage products;
- To finance insurance premiums and for which payments are remitted directly by the credit union to the insurance provider or broker;
- To finance the purchase or leasing of equipment and for which payments are remitted directly by the credit union to the vendor or lessor of this equipment.
These exemptions do not apply to transaction accounts through which a legal entity customer can make payments to, or receive payments from third parties. Additionally, if there is a possibility for a cash refund in one of the accounts identified above, then beneficial ownership of the legal entity must be identified and verified either at the time of initial remittance or at the time such refund occurs.
Definition of Beneficial Owners
The credit union identifies the following individuals as beneficial owners:
- Each individual who directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, owns 25% or more of the equity interests of the legal entity;
- A single individual with significant responsibility to control, manage, or direct the legal entity (e.g., CEO, CFO, COO, Managing Member, General Partner, President, Vice President, or Treasurer or any other individual who regulatory performs similar functions);
- The trustee(s) of trust accounts.
Legal Entity Members
The credit union includes the following as legal entity members:
- Limited Liability Company (LLC);
- Another entity that is created by the filing of a public document with a Secretary of State (or similar office);
- General Partnership; or
- Similar entity formed under the laws of a foreign jurisdiction.
*There are exclusions to the legal entity definition, such as a regulated financial institution. Credit unions should reference 1010.230(e)(2) for the complete list.
Record Retention for Beneficial Owner Identification
The credit union retains records for the following timeframes:
- Records related to the identification of the beneficial owner(s) of the legal entity are maintained for 5 years after the date the account is closed.
- Records related to the verification of the beneficial owner(s) are retained for 5 years after the record is made.
Records must include:
- For identification, any identifying information obtained by the credit union, including without limitation the certification form (if used).
- For verification, a description of any document relied on (noting the type, any identification number, place of issuance and, if any, date of issuance and expiration), of any non-documentary methods and the results of any measures undertaken, and of the resolution of each substantive discrepancy.
Question: When I went into ComplySight to start my review for the next year, I noticed that the “Complete” box was already checked for the Factors and there was a date in the “Completed On” field in the Assignment and Compliance Review Schedule. What do I need to do if I want to do a new review?
Answer: Good for you for getting started on this! We would always recommend that a review be conducted every year! Even if something was graded a 10 the year before, something within your policy/procedure/process may have changed in a way that would affect the grade. Also, because we may update content when a regulation has changed, there may be amended requirements that the credit union will still want to review to ensure compliance.
When an employee has graded a Factor and completed their compliance review, they should be indicating that completed review by checking the “Complete” box (as shown below).
Then, when an employee is going to do a new review the next year, the first thing the user will want to do is uncheck the “Complete” boxes to identify that the review is no longer complete and a new review will commence.
The “Complete” boxes serve multiple functions within ComplySight. First and foremost, it will accurately reflect the status of a review of your reporting functionality. For example, when your “Complete” boxes are checked during Factor Grading, the Factor Grade Report will indicate a status of “Complete.” If you have started your review of a Factor and have even graded the Factor, but haven’t checked the “Complete” box, the status of that Factor will be “Active.”
The “Complete” boxes also serve an important function if your credit union is utilizing the “Assign Compliance Review” option (L1 Administrator access). If, for example, an employee has been assigned either an Area or an Item to review, the “Completed On” box in gray below will automatically be populated with the date the last review has been completed in that respective assigned Area or Item and the “Complete” boxes have all been checked.
Therefore, if credit unions are utilizing the “Assign Compliance Review” at the start of a new year, it will be important to set your new “Required Start Date” and “Expected Completion Date,” while unchecking (or asking your assigned employee to uncheck) the “Complete” boxes prior to their new review in order to not only generate a new “Completed On” date, but to properly report the status of the review on the Area, Item and Factor Grade reports.
Future enhancement! We are speaking to our developers about a way that we can “reset” the review status based on an Area/Item that will automatically uncheck those “Complete” boxes, without having to do it manually when it is time for a new review. Stay tuned!
To answer your second question,
As a reminder, “old” content can be Exported out of ComplySight and archived, a topic that was covered in our October, 2015 Newsletter.
To view a Recorded webinar, click on the title of the webinar.
RECORDED WEBINARS - Click on the title of the webinar to listen. (A “safe” download of WebEx may be necessary.) These are available 24/7!
The current recorded webinars provide you with a variety of topics that will get you started on your ComplySight adventure! We plan to record additional “how to webinars” to make them available to you in the near future!
Factor Selection Navigation Screens
To simplify the ability to access Factor Grading screens and Item information, the Factor Selection screens have been redesigned. Check out this short webinar for details!
Access Level 2.5 and How to Use It
Introducing the newest access level, allowing the L1 Administrator to set L2.5 access and then assign specific Areas that only that user may review.
Introduction to ComplySight
Designed to introduce and show the many features and benefits of ComplySight.
Training & Tips – Where to Start?
This webinar will: suggest a starting point as a new ComplySight user, discuss how Factor Grading works, review the Action Item Build/Edit process, and discuss the need for a compliance management tool that regulators - and you - will appreciate.
Training & Tips – How to Export Data
When you need to archive or copy data out of ComplySight for a fresh start or to provide information for a Board meeting, this webinar will explain the process.
Training & Tips – Reg Alerts, Etc.
This webinar explains Regulatory Alerts, Factor Weighting, Assigning Employees, and gives a quick preview of Level 2.5.
Training & Tips – Reports
What reports are in ComplySight and how are they utilized?
Technical questions (software operation issues) can be submitted through the Technical Support form in ComplySight
Compliance related questions can be submitted through the Compliance Questions form in ComplySight.
For other questions: click here
Closing Comments from Glory
New Year, Big Changes!
Just when we think there is no way the year ahead of us can be as crazy as the one we just left, we start making a “to-do” list of all of the regulations that will become effective and we quickly insert our foot into our mouth. However, we are here to try and make your lives a little bit easier when it comes to these new/amended pesky regulations! So, rest assured that we will be working to try and prepare our content ahead of the effective dates and provide it to you in the same way we did the changes to the NCUA’s Member Business Lending rules.
We hope you like the new navigation screens in the Factor Selection portion of ComplySight and the “breadcrumbs” in the Factor Grading section! Those were really exciting changes for us!
We have quite a few exciting enhancements planned for this year! Currently, we are in the process of developing a File Management system that will allow our users to bulk upload files and choose an Area, Item and/or Factor where they would like those documents to be maintained. We think this is another enhancement that will make using ComplySight easier and hopefully enable you to fully utilize ComplySight as your comprehensive compliance management system!
As always, thank you for your continued support!
Glory LeDu, CUCE, BSACS, CUERME
ComplySight is a product of League InfoSight, CUNA and your State Association or League.
Check with your League/Association for information regarding availability in your state.