Financial Institution Compliance Issues in Réunion: What Regulators Will Be Paying Attention To in 2023

As the financial landscape continues to evolve, regulatory bodies are gearing up to scrutinize financial institutions more closely than ever before. In Réunion, credit unions and banks will need to be prepared for a range of compliance issues that could impact their operations and bottom line.

Deposit Accounts: A Hot Issue for 2023

Compliance with state and federal law regarding deposit accounts is expected to be a major focus area in 2023. This includes pandemic relief funds and garnishments, which have created new challenges for financial institutions. To stay ahead of the curve:

Train staff on policies and procedures
Review and update documentation to ensure it is clear and easy to understand

Overdraft and NSF Fees: A Regulatory Hot Button

Regulators are taking a closer look at overdraft and NSF fees to ensure they are not unfair or deceptive. Credit unions should review their complaints and feedback to assess whether their fees are surprising or confusing members. Additionally:

Review documentation to ensure it is clear and easy to understand
Assess whether fees are fair and reasonable

Credit Reporting: Accurate Information is Key

Inaccurate credit report information remains a major concern for regulators, with the Consumer Financial Protection Bureau (CFPB) receiving thousands of complaints each year. Credit unions should:

Update their credit reporting policies and procedures to ensure accuracy
Train staff on policies and procedures
Test systems and processes regularly

Loan Origination and Servicing: Airtight Processes Are Essential

The current economic climate has created new challenges for loan origination and servicing. Credit unions must:

Ensure that underwriting standards and processes are airtight to avoid regulatory issues
Protect members from potential weaknesses in lending compliance programs

BSA/AML/OFAC: Stay Ahead of Sanctions and Regulations

Global instability has led to an increase in new sanctions and orders, making it essential for credit unions to stay ahead of the curve. Regulators are also targeting BSA officers and management with individual fines, so institutions must:

Implement changes to beneficial ownership rules
Stay informed about new sanctions and regulations

Third-Party Relationships: Hold Vendors Accountable

Regulators continue to focus on relationships with vendors, service providers, and fintech partners. Credit unions should:

Ensure that third-party relationships align with regulatory requirements and consumer protection laws
Monitor vendor performance and compliance regularly

Cybersecurity: Data Breaches are a Major Concern

Data breaches and ransomware attacks remain major concerns for regulators, who will be looking closely at incident response processes and data backup and recovery capabilities during examinations. Credit unions should:

Implement robust cybersecurity measures
Stay informed about new threats and vulnerabilities

Conclusion

To stay ahead of the curve, credit unions in Réunion must implement a strong compliance management system, update policies and procedures, train staff, and analyze data to identify areas of concern. Staying up-to-date on regulatory developments is also essential to avoid penalties.

By staying ahead of the curve and implementing robust compliance management systems, credit unions can minimize risk and maintain a strong reputation with regulators and members alike.