What’s Your Policy on Policy Management?



If policy strategy puzzles your credit union, rest assured you’re in good company. The topic tops the list of those CUs tend to inquire about. Credit Union BUSINESS’s compliance expert offers a few of his favorite tips to help credit unions streamline their policy management process.

One of the topics credit union professionals ask me about most often is policy strategy. Although it’s possible the name of my employer weighs into the frequency of this inquiry, I suspect it goes deeper than that.

Policies are a consistent topic across all credit unions, regardless of size, complexity or geographic location. That’s because everyone knows a credit union’s policies will always be on an examiner’s request list. They will be reviewed and scrutinized during each audit and every exam.

A credit union’s policies are supposed to serve as a set of guidelines under which it will operate. Each written policy a credit union drafts should set the parameters by which it will conduct business and be approved by the board of directors.

Throughout my tenure in compliance, I’ve developed some efficiencies in the drafting, approval and implementation of policies. What follows are a few of my tips, which should help streamline your policy management process.

  • Take annual reviews seriously.

Credit unions often ask if a particular policy needs to be reviewed and approved by the board on an annual basis. I tell them, “If the topic is important enough to warrant its own policy, it is important enough to have the board review it each year.”

  • Create efficiencies for your board.

A credit union’s policies can be complex and sometimes lengthy. They are also quite similar from year to year, absent any significant regulatory changes related to a specific topic. Providing a full version of the policy with any revisions highlighted can help your board focus on the most critical aspects for review. Assuming the board approved the policy last year and no significant changes to the credit union’s operations have occurred, the revised language will likely require the most scrutiny.

  • Train your board.

While board training is a requirement in specific areas of regulation, such as the Bank Secrecy Act (BSA), it can be quite helpful from a policy standpoint, too. Providing background as to the reason for a change in policy will help board members direct the credit union in the correct manner and will result in a more efficient review process.

  • Make policy reviews a standing agenda item.

Slow and steady wins the race. Breaking policy reviews down into more easily digestible portions may increase the effectiveness of the reviews. Rather than asking the board to review all policies during the last month of the year, create a review schedule and ask them to review three or four policies per meeting. They will be more engaged, and the task won’t feel as daunting.

  • Keep policies and procedures separate.

Policies provide the structure the board has established for the credit union. Procedures, on the other hand, help ensure the credit union is operating within that framework by establishing the business processes the credit union will follow. While the policy may be changed minimally from year to year, procedures may be altered much more frequently. And because policies are board approved, each subsequent revision will require presentment to the board. Reference each document within the other as necessary, but avoid creating more work for yourself and the board.

  • Keep policies top of mind.

When new or revised rules are published, consider their impact on your current policies. Are revisions required? May it be necessary to draft a new policy? Also, ensure any new product offerings are addressed. You’ll want to ensure the board has approved the product and that appropriate guidelines have been established.

  • Above all, follow your own policies.

If your board has approved specified criteria for an area of the credit union’s operations, it is of utmost importance to follow the established guidelines. Some of the most difficult conversations with regulators occur when the credit union fails to follow its own policy.

Credit union policies are living, breathing documents that change over time. Revisions may result from external forces, such as regulatory actions. They may also result from internal pressures, including new product offerings or the addition of a new department or team leader. It is important to keep policies current to be most effective. After all, they’re the structure upon which your credit union is built.

Brian GodwinBrian Godwin is director of compliance solutions for PolicyWorks, a national leader of credit union compliance solutions. He can be reached at

This content is for CU BUSINESS eMagazine , Special Deal: 2 websites , and NEW! The Leadership Team Builder Group Subscription members only.
Log In Register


More like this

ALM First Announces New Dates & Locations for Fall M&A Master Sessions

Dallas, TX – ALM First has expanded its M&A Master...

United Federal Credit Union Names Will Schirmer Chief Human Resources Officer

JOSEPH, Mich. –United Federal Credit Union has named Will...

Rebecca White Joins Texas Trust as Vice President of HR

ARLINGTON, Texas – June 6, 2022 – Strengthening and...

There’s more to overdraft reform than just fees

The great overdraft debate has focused on fees. And...