Compliance amid COVID-19: Sarah Hodgens answers frequently asked questions

Compliance Flow Chart Concept

In the New York Credit Union Association’s continuing efforts to assist credit unions, Association staff has been providing answers to a range of compliance questions, both COVID-19-related and non-COVID-19, that member credit unions have had amid the pandemic.

Sarah Hodgens, the Association’s director of compliance, has compiled a list of recent, recurring questions that credit unions have been contacting the Association’s compliance department about, as well as the corresponding answers.

Q: Can our credit union’s annual meeting be held virtually due to COVID-19?

 A: Yes, it is permissible to hold annual meetings virtually due to COVID-19. The NCUA has issued a letter regarding Annual Meeting flexibility for further guidance.

Q: Where can my credit union find more information on record retention?

 A: Below are a few helpful resources regarding record retention.

  • InfoSight: Record Retention: Summary; and
  • CU PolicyPro: Model Policy 10100: Records Retention; and Record Retention Tables.

Both the model policy and the record retention tables can be accessed in CU PolicyPro by performing a keyword search. For the Model Policy use the policy number “10100” as the search term. For the record retention tables use the word “table” as your search term.

Q: Is a changes in terms notice required for Regulation CC’s funds availability inflation amount adjustments effective July 1, 2020?

 A: Change-in-terms rules of Regulation CC, extracted below, require a financial institution to send a written notice to consumer account holders at least 30 days before implementing a change to the institution’s funds-availability policy and further states that any change that expedites the availability of such funds shall be disclosed not later than 30 days after implementation.

Regulation CC Section 229.18(e):

(e) Changes in policy. A bank shall send a notice to holders of consumer accounts at least 30 days before implementing a change to the bank’s availability policy regarding such accounts, except that a change that expedites the availability of funds may be disclosed not later than 30 days after implementation.

When  changes are being made solely related to inflation adjustments, notification should be sent 30 days before implementation since the credit union is not expediting availability sooner than what required under regulation.

Q: Can my credit union post ACH payments based on account number only?

A: NACHA rules require that a Receiving Depository Financial Institution verify the account number presented in the ACH file matches the account number being credited. If the account number matches it can be accepted into the account. However, if the credit union’s policy prohibits deposits in the name of others into an account, the business decision can be made to return those items.

Q: How is an out-of-state subpoena recognized in New York state?

 A: Out-of-state subpoenas must be submitted to the county clerk in the county within New York state that the discovery is sought to be conducted in order to be recognized in New York. The person’s process for submitting an out of state subpoena is outlined in section 3119  of New York state’s Civil Practice Law & Rules.

Q: How is an out-of-state judgment recognized in New York state?

 A: A sister-state judgment needs to be turned into a New York state judgment so that it can then enforced in New York. The judgement creditor’s process for filing and status of foreign judgements is outlined in section 5402 of New York state’s Civil Practice Law & Rules.

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