CU Staff Training

1. CU Staff Training • Teller Training • Lending Training • Collection Training • IT Training • And Much More

2. CU Management Training • Establishing Internal Control • Employee Retention • Understanding CU Financials • Sexual Harassment • Asset Liability Management • Lending & Delinquency Control • And Much More

3. CU Volunteer Training • Board Training • Strategic Planning • Credit Committee Training • Supervisory Committee Training • And Much More

4. Other ICUT Programs • Laugh Your Way To The CU • Pre-Drafted Newsletter Articles • Archived On-Line Classes • Potential SEG Show • And Much More

5. Join Today cuSchool.com Annual Membership Per CU $199.95 Visit http://www.cuSchool.com

6. Don’t Miss Our Next Class Do’s and Don’ts of Being a CU Teller Date: Tuesday March 16, 2010 Time: 3:30PM-4:45PM Eastern Standard Time Understanding Self-Employed Taxes FOR MAKING CREDIT DECISIONS Date: Tuesday April 13, 2010 Time: 3:30PM-4:45PM Eastern Standard Time

7. Today’s Facilitator

8. Supervisory CommitteeDuties & Responsibilities Presented by ICUT Services Will begin in a few minutes………….

9. Housecleaning Items • Detailed Outline • Hold Verbal Questions • Use the Chat Feature • Polling • PowerPoint • Complete Class Survey • Send Me an eMail??? • Door Prize Winner

10. Today’s Agenda • Define Supervisory Committee • Qualifications & Power Of Committee • Duties & Responsibilities • Internal Review Program • Best Practices for CUs • Internet Scams, Fraud, Identity Theft • How To Manage The Committee • Open Mic

11. What Is The Supervisory Committee? • The Guard Dog or “Watchful Eye” • The Audit Committee “The committee that helps minimize the possibility of the credit union incurring any kind of loss.”

12. How Does One Get On This Committee? • Appointed by the Board Of Directors • 1 may serve as director • 1,2,or 3 year terms

13. Who Can Serve? • Qualifications • Member In Good Standing (Shares & Loans) • Accounting • Non Accounting Backgrounds • Active & Cooperative Participant • Commitment To CU

14. Structure Of Committee • Committee Size (3-5) • Positions On Committee • Board Representation

15. What Power Does Committee Have? • Access To All Records • Can Call Special Membership Meetings • Removal Of Officers, Directors & CC Members

16. Duties & Responsibilities • Planning & Budgeting • Meet Regularly • Attend Board Meetings (?) • Understand Financial Trends • Understand The CU’s Risks • Surprise Cash Counts

17. Duties & Responsibilities • Planning & Budgeting • Meet Regularly • Attend Board Meetings (?) • Understand Financial Trends • Understand The CU’s Risks • Surprise Cash Counts

18. Understanding Financial Trends • Beginners: NAFCUNET.org / CUES.org / cuSchool.com • Intermediate: NCUA.gov (5300) / CUNA.org (Research & Statistics) • Advanced: ALM Reports, FPRs (NCUA.gov), Journal of Accountancy (COSO)

19. Duties & Responsibilities • Planning & Budgeting • Meet Regularly • Attend Board Meetings (?) • Understand Financial Trends • Understand The CU’s Risks • Surprise Cash Counts

20. Understanding CU Risks • Credit Risk • Liquidity Risk • Interest Rate Risk • Compliance Risk • Strategic Risk • Transactional Risk • Reputation Risk

21. Duties & Responsibilities • Planning & Budgeting • Meet Regularly • Attend Board Meetings (?) • Understand Financial Trends • Understand The CU’s Risks • Surprise Cash Counts

22. Surprise Cash Counts • Cash Count Audit Review As of_____________ • Drawer #________ • COINS: CHECKS: • Pennies ________   ______________   ________ • Nickels ________    ______________   ________ • Dimes ________     ______________   ________ • Quarters ________ ______________  ________ • Halves ________   ______________  ________ • Dollars ________  ______________  ________ •   CURRENCY: • Ones       ________   ______________   ________ • Twos       ________ ______________  ________ • Fives       ________ ______________  ________ • Tens       ________ ______________  ________ • Twenties ________ ______________ ________ • Fifties       ________ ______________ ________ • Hundreds ________ _____________ ________ •   Subtotal        $ ________ Subtotal        $________ • Per Control $ ________ Per Control $________ • Difference   $ ________ Difference   $________ I, ________________, owner of this drawer, certify that a member of the supervisory committee has counted all cash and checks in my possession as of ____________________. Signed___________________ Time & Date Name of Teller

23. Duties & Responsibilities • Review Loan Files • Evaluate Internal Control • Account Verification • Monitor Board • Review Bank Reconcilements • Work With Regulators & Follow-up • Confirm Account Closures

24. Duties & Responsibilities • Review Loan Files • Evaluate Internal Control • Account Verification • Monitor Board • Review Bank Reconcilements • Work With Regulators & Follow-up • Confirm Account Closures

25. Duties & Responsibilities • Review Loan Files • Evaluate Internal Control • Account Verification • Monitor Board • Review Bank Reconcilements • Work With Regulators & Follow-up • Confirm Account Closures

26. Duties & Responsibilities • Review Loan Files • Evaluate Internal Control • Account Verification • Monitor Board • Review Bank Reconcilements • Work With Regulators & Follow-up • Confirm Account Closures

27. Duties & Responsibilities • Review Loan Files • Evaluate Internal Control • Account Verification • Monitor Board • Review Bank Reconcilements • Work With Regulators & Follow-up • Confirm Account Closures

28. Duties & Responsibilities • Review Loan Files • Evaluate Internal Control • Account Verification • Monitor Board • Review Bank Reconcilements • Work With Regulators & Follow-up • Confirm Account Closures

29. Duties & Responsibilities • Review Loan Files • Evaluate Internal Control • Account Verification • Monitor Board • Review Bank Reconcilements • Work With Regulators & Follow-up • Confirm Account Closures

30. Confirm Closed Accounts Dear Member: As a valued member that planned to closed your account at the credit union we hope that you had a positive experience that you found our services of value.In an effort to improve our services, we would appreciate it if you would take a few seconds to respond to the survey shown below: How long were you a member? ___________________________ Why did you close your account? __________________________ Would you ever join again? _____________________________ Did you know our policy is “once a member, always a member”?_____ Sincerely, Supervisory Committee

31. Duties & Responsibilities • Plan Annual Audit & Follow-up • Review Returned Mail • Confirm Collection Accounts • Confirm Death Claims • Maintain Visibility

32. Duties & Responsibilities • Plan Annual Audit & Follow-up • Review Returned Mail • Confirm Collection Accounts • Confirm Death Claims • Maintain Visibility

33. Confirm Collection Accounts Young & Young Law Firm 100 Best Way Nocandu, Nebraska 08066 • Dear Mr. Young: • On behalf of the supervisory committee for the ABC Federal Credit Union, I would like to confirm what credit union accounts have been forwarded to you for collection during the past twelve months. As part of our confirmation we would like to know the following information: • ACCOUNT NAMEDATE RECEIVEDORIGINAL LOAN BALANCECURRENT BALANCESTATUS • Again, we only need this information for accounts that you received between July 1, 20XX and the date of this letter. • Please forward all responses to this request to: John Doe c/o ABC FCU 12 Wayward Road Nebraska City, Nebraska 08065

34. Duties & Responsibilities • Plan Annual Audit & Follow-up • Review Returned Mail • Confirm Collection Accounts • Confirm Death Claims • Maintain Visibility

35. Confirm Death Claims • CUNA Mutual InsuranceP.O. Box 1084Madison, WI 53701ATTN: Death Claims • Dear Claims Department: • On behalf of the supervisory committee for the ABC Federal Credit Union, I would like to confirm what death claims have been presented to you for the credit union during the past twelve months. As part of our confirmation we would like to know the following information: • CU EMPLOYEE SUBMITTING CLAIM • MEMBER ACCOUNT NAME • AMOUNT OF CLAIM • DATE CLAIM WAS SUBMITTED • STATUS • Again, we only need this information for claims that you received between July 1, 20XX and the date of this letter. • Please forward all responses to this request to: • John Doec/o ABC FCU12 Wayward RoadNebraska City, Nebraska 08065

36. Duties & Responsibilities • Plan Annual Audit & Follow-up • Review Returned Mail • Confirm Collection Accounts • Confirm Death Claims • Maintain Visibility

37. Internal Review Program • The Supervisory Committee is the audit committee for the ABC Federal Credit Union. In that capacity, the committee will engage in regular activities that are intended to monitor the overall operation of the credit union. The structure of this committee will be compliant with the Federal Credit Union Act and the bylaws of the ABC Federal Credit Union. Accordingly, the committee will be responsible for the following:

38. Internal Review Program ØReport all committee activities to the board of directors ØMaintain minutes for all committee meetings. ØAnnually review the internal controls ØAnnually follow-up with Supervisory Committee audit findings ØAnnually follow-up with NCUA examination findings ØAnnually review the credit union’s strategic business plan. ØQuarterly perform surprise cash counts. ØQuarterly perform verification of deposits in transit ØQuarterly perform a review of teller activity. ØQuarterly review negative share report. ØQuarterly review a sample of loan files for compliance. > Monthly to monitor board activity

39. Identity Theft (Ijacking) • It is the use of another person’s identification, credit, or other data that involves fraud or deception, and economic gain is realized in the name of the victim. Unlike fingerprints, that are unique to each individual, personal data, like social security numbers, bank accounts or credit card numbers, telephone calling card numbers and other valuable identifying data can be used.

40. Identity Theft On The Rise • Recent reports put the numbers of ID Theft at 9.9 million per year… Insurance Journal January 2010 • 5% of the adult population in America • Cost $50 billion annually. • 1 out of 4 Americans fall victim to ID Theft. • 1000 cases of ID Theft occur each day.

41. 10 Most Risky Cities for Ijacking 1) San Francisco2) Seattle 3) Denver4) San Jose5) San Diego 6) Atlanta 7) Salt Lake City8) Las Vegas9) Sacramento 10) Phoenix Sperling’s Best Places

42. 10 Least Risky Cities for Ijacking 41) Rochester42) Providence43) Cincinnati 44) Cleveland45) Virginia Beach46) New Orleans 47) Birmingham48) Louisville 49) Buffalo50) Pittsburgh Sperling’s Best Places

43. Justices Limit Use of Identity Theft Law The Supreme Court on Monday rejected a favorite tool of prosecutors in immigration cases, ruling unanimously that a federal identity-theft law may not be used against many illegal workers who used false Social Security numbers to get jobs. …..NY Times May 4, 2009

44. The Law • Identity Theft and Assumption Deterrence Act of 1998 • Gramm-Leach-Bliley Act (GLBA) requires that financial institutions have policies, procedures, and controls in place to prevent and detect fraudulent access to such information. • Red Flag Rule

45. Best Practices For CUs • Protect your member information. • Verify new accounts with a Member Identification Program • Verify and review address changes. Confirm old addresses or a simple callback to phone numbers on file. • Carefully review loan documents and compare social security numbers, addresses and employer names on application and the credit report. • Conduct a “System Penetration Test”.

46. Best Practices For CUs • Train all staff on security and privacy protection. • Policies should include steps to help victimized members. • Conduct criminal and civil background checks before hiring employees. • Don’t use SS# as employee ID numbers on paychecks, time cards, staff badges, etc. • Restrict system access to sensitive personal data to only those who need the information.

47. Best Practices For CUs • Ensure proper disposal of sensitive information. • Inform your members about business identity theft such as vandalized or mimicked Web sites. • Educate your members that financial institutions do not contact members to request or verify security information. • Consider software/hardware that regularly monitors the database to detect unusual financial patterns and activity.

48. Best Practices For CUs • Have a written privacy policy, adequately communicate the policy and provide training. • Lock up and limit access to personnel files. • Provide a secure location for employees to store their purses, documents, briefcases, etc. at the workplace. • Ensure that your vendors are protecting confidential employee data.

49. Internet Scams & Fraud • Phishing/Pharming – Educate your members • Age-targeted Scams – Youths and seniors • Counterfeiting – Currency & Drafts • Records/Systems Hijacking – Zombie Programs - designed to steal data, damage web sites, slow response time

50. Useful Resources • http://www.IdentityTheft.org • http://www.ncua.gov • http://www.internetfraud.usdoj.gov/ • http://www.antiphishing.org/ • NCUA Guide for Supervisory Committees • NCUA Federal Credit Union Bylaws • NCUA Rules & Regulations