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.
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:
Regulatory technology (RegTech) can help you automate many compliance tasks, reducing manual oversight and minimizing risk. Look for solutions that:
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.
If hiring a full-time compliance team isn’t an option, outsourcing certain compliance functions can be a cost-effective alternative. Consider working with:
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
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:
By making compliance a shared responsibility, you can strengthen your risk management without adding extra headcount.
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.
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.
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.