Compliance Update with Amy K

​Resources to educate members about fake emergency scams – tips from the FTC. Plus, CU PolicyPro updates are now available – including a new procedure for FCU expulsion. 

by Amy Kleinschmit, Chief Compliance Officer 

Fake Emergency Scams
The Federal Trade Commission (FTC) recently shared some resources that credit unions can use to help educate their members about faked emergencies that scammers are using. As credit unions are already aware, scammers are good at pretending to be someone that they’re not. In some scams, they try to trick individuals into thinking a loved one is in trouble. The resources featured recently include examples of family emergency scams and how scammers are trying to convince members to send money – once members know about these scams and the tactics of these criminals, they hopefully take steps to avoid it.

The scammer may already know a lot about your member or the person they’re pretending to be. They may know your member’s name, where they live, and other information they could have found on social media sites or by hacking a family member’s email. Scammers might pretend to be an “authority figure,” like a fake lawyer, police officer, or doctor working with the family member.

Sharing these examples and resources with members to help educate them about these scams can help them recognize the potential fraud and hopefully avoid being scammed.

If you find out a member has potentially received a call or message claiming to be a family member or a friend desperate for money, don’t trust the voice on the line — even if it sounds like their family member or friend. Scammers are good at faking it.

Some tips from the FTC to do to verify the person’s identity:

• Resist the pressure to react and send money immediately. Hang up — or tell the person you’ll call them right back. If you don’t feel comfortable hanging up, try asking a question only the real person would know the answer to, like “What kind of dog do you have?” or “Where did you spend Thanksgiving last year?”
• Use a phone number you know is right to call or message the family member or friend who (supposedly) contacted you. Ask them if they’re really in trouble.
• Call someone else in your family or circle of friends, even if the caller said to keep it a secret — or sounds like a loved one. Do that especially if you can’t reach the friend or family member who’s supposed to be in trouble. A trusted person can help you figure out whether the story is true.

 
CU PolicyPro Updates
The 2023.4 content updates are now available, and includes updates released in August and September. The full update includes seven updated policies and one new procedure (2232.10 – Federal Credit Union Expulsion Procedures).

As a reminder – these updates are only made to the “model” policies and the credit union’s adopted policies. Please review the Overview Document and/or the redlined documents related to this update (these can be found in the Resources area of CU PolicyPro under Content Update Archives). For each policy decide if you want to - Do nothing and leave your policy as is (usually only if the update does not apply to your credit union, or you are not currently using the policy); remove the policy from your CU Policies Manual and bring in the updated policy in its entirety (usually if your CU Policies Manual version has little or no customization, or if the updates were very extensive and it would be easier to start with the updated content and re-customize for your credit union). Another option is to use the redlined version as a guide and manually incorporate the updates into your CU Policies Manual version (usually if the updates were very minor, or if your CU Policies Manual version is heavily customized and it would be less work to manually add the updates rather than re-customize the policy).

The following updates are included in this recent content update:

2232 – Membership Expulsion and/or Service Limitation. This policy has been revised to include the options for federal credit unions to update their bylaws to allow for the ability to expel a member for cause. If the credit union pursues this bylaw amendment, they should adopt this revised policy. 

2232.10 – Federal Credit Union Expulsion Procedures. **NEW CONTENT ** Model procedures were developed to help credit unions comply with the requirements to expel a member for cause for federal credit unions.

7410 -Indirect Dealer Financing. This policy was updated to include the revised definitions from the NCUA’s final rule.

7430 – Participation Loans. This policy was reviewed in light of the NCUA’s final rule. Only minor housekeeping changes were needed. 

7435 – Small Business Administration Loans. This policy was updated to revise the maximum loan and guaranty amount for SBA Express loans.

7700 – Loan Review and Classification. There was a minor change in this policy to remove the NCUA reference of Part 702.402 within the section on Oversight. The proper citation is 702.113.  The actual citation was removed and language replaced to keep that reference general to comply with “NCUA regulations.”

10100 – Record Retention. This policy was updated to provide clarity on the credit union profile (NCUA Form 4501 or equivalent). Previously, it was listed as the credit union profile and NCUA Form 4501 being separate and independent, however the profile report and Form 4501 are the same.

10001 – Records Retention Table 1: Corporate Records. This record retention schedule was revised as described in 10100 to provide clarity on the credit union profile (NCUA Form 4501 or equivalent). Previously, it was listed as the credit union profile and NCUA Form 4501 being separate and independent, however the profile report and form 4501 are the same.