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Compliance Proper policies procedures help CUs manage RDC risk
WASHINGTON (9/14/09)--While extending remote deposit capture (RDC) to individual members can present some “operational and regulatory compliance risks,” the Credit Union National Association’s (CUNA) director of compliance information Valerie Moss writes that credit unions can address those risks by following “appropriate policies, procedures, and processes.” In the September issue of Credit Union Magazine, Moss said that credit unions that provide RDC, which allows credit union members to transmit scanned checks or share drafts to their credit union from remote locations, must do thorough due diligence on the third-party RDC vendor they enter into business with. The Federal Financial Institutions Examination Council (FFIEC) agencies, which includes the National Credit Union Administration, recommend that credit unions complete a “thorough risk assessment” and identify “the legal, regulatory compliance, reputation, and operational risks” related to the delivery system before they begin an RDC program, Moss added. Credit unions should also consider any legal and regulatory risks and should monitor RDC operations, safeguard account and personal information from their members, and be sure to comply with interagency internet authentication guidelines, Moss wrote. A full understanding of the operational risks related to the use of a RDC is also vital, and credit union managers must also have their credit union’s legal counsel review any contract that is entered into with an RDC service provider , she said. While the risks related to RDC are not substantively different from those related to any other financial transaction, altered checks or counterfeit funds may be harder to detect, Moss added. For the full story, use the resource link.


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