Credit Union Compliance When You Can’t Afford a Compliance Team: How to Stay Ahead

Compliance is a crucial part of running your credit union, but hiring a full compliance team isn’t always financially feasible. 

Regulations continue to evolve, and staying compliant can feel overwhelming—especially when you’re managing it with a limited budget.

However, you don’t have to go it alone. With the right strategies, you can keep your credit union compliant without the cost of a full in-house team.

Download Your Ultimate Guide to Compliance Today!

Sections

Why Is Compliance So Expensive?

Regulatory compliance is one of the largest operational expenses for credit unions, consuming a significant portion of your budget. From staff training to technology investments and third-party audits, the costs add up quickly.

According to industry data, compliance-related expenses account for 31% of total operating costs for smaller credit unions.

Source: CUNA

Several factors contribute to the high costs of compliance, including:

• Constantly changing regulations – New and evolving regulations require ongoing investments in training and technology.
• Manual reporting and auditing – Compliance tasks often require extensive documentation, which can be time-consuming and labor-intensive.
• Cybersecurity and data protection requirements – Protecting member data requires robust security measures, adding to compliance costs.
• Regulatory fines and penalties – Failing to meet compliance standards can lead to costly fines, making preventive measures essential.

5 Things to Do When You Can't Afford a Compliance Team 

1. Leverage Compliance Technology

Regulatory technology (RegTech) can help you automate many compliance tasks, reducing manual oversight and minimizing risk. Look for solutions that:

• Monitor and update regulatory changes automatically
• Generate compliance reports
• Conduct internal audits
• Provide real-time alerts for potential compliance risks

Your core processor or digital banking platform may already offer built-in compliance tools. Be sure to take advantage of these features to streamline your compliance efforts.

If your current system lacks compliance automation, it may be worth exploring new fintech partnerships that offer these capabilities.

2. Outsource Compliance Support

If hiring a full-time compliance team isn’t an option, outsourcing certain compliance functions can be a cost-effective alternative. Consider working with:

• Compliance consultants for regulatory guidance on an as-needed basis
• Third-party audit firms to conduct risk assessments
• Legal professionals who specialize in financial regulations

Outsourcing allows you to access expert support without the expense of full-time salaries.

Additionally, many third-party providers offer subscription-based models, so you can scale services up or down depending on your needs.

Keep Reading: Regulatory Compliance: Best Practices for Credit Unions

3. Keep Your Team Educated

Even without a dedicated compliance team, staying informed is essential. Regulations change frequently, and ensuring your staff understands compliance requirements can reduce the risk of errors. Encourage your team to:

• Check out these free compliance resources from NCUA here
• Attend compliance webinars and training sessions
• Join local credit union networks or associations for regulatory resources

By making compliance a shared responsibility, you can strengthen your risk management without adding extra headcount.

4. Establish Strong Internal Policies

Having clear policies and procedures in place can help you prevent compliance issues before they arise. Standardizing processes ensures that your credit union remains consistent in meeting regulatory requirements. Focus on policies for:

• Transaction monitoring and reporting – Establish protocols for detecting and addressing suspicious activity

• Member data protection – Implement cybersecurity measures and ensure staff understands data privacy regulations

• Loan and account disclosures – Ensure all member-facing documents comply with federal and state laws

Regularly reviewing and updating these policies can help you stay ahead of regulatory changes.

5. Conduct Internal Audits

Internal audits help identify compliance gaps before they become costly issues. If an internal audit uncovers concerns, you can address them proactively rather than reactively.

Source: Compliance Quest

These audits should include a scheduled review of loan and account documentation to ensure compliance with federal regulations, transaction monitoring systems to detect signs of fraud or money laundering, and employee adherence to internal policies and procedures.

Enhance Your Compliance Approach with FLEX

Having a limited amount of resources your credit union can dedicate to compliance is normal, but it doesn't have to hold you back. At FLEX, we offer compliance technology and resources that can help your credit union keep up with the ever-changing demands of regulations. 

Click the button to download your free Compliance eGuide to elevate your compliance strategy.