AT : Are credit unions currently leveraging innovative technologies such as AI and machine learning to remain competitive with other sectors of the financial community ?
RH : We are seeing our credit unions using technological platforms to meet the needs of their members and exceed their expectations . They are using predictive modeling and analytics to anticipate their member ’ s needs . It is important that credit unions use these predictive models to help members along their financial journey , giving them not only budgeting but also retirement planning and maybe putting them in touch with a person who can help them with asset management or wealth management .
AT : Credit unions present a viable option for underrepresented communities to gain access to financial services without depending on predatory lending alternatives . How well are credit unions addressing this issue and what more needs to be done ?
RH : One thing that I see with some of the credit unions that want to serve the underserved is that they can find uses of nontraditional credit to build a credit performance to properly build a credit profile . They may not have had traditional credit reported to the bureaus , but they do look at accounts to see that , for example , every month , customers are paying their cable bills , mobile phone bills , rent , etc ., so they can build a financial picture that way . Financial inclusion is the civil rights issue of our generation . There is a credit union I just met with the other day from Portland , Oregon , that is helping provide financial coaching . They are going into communities of color to partner them with digital platforms to help them have access to affordable financial tools . This means that the credit union is getting a new member and the new member can get away from predatory payday lenders . Those are some of the things that credit unions are doing .
AT : Do credit unions advocate for cannabis businesses ?
RH : Cannabis is legal in 39 states and hemp is legal at the federal level ; were it not for some of the banks and credit unions , the owners of these companies would not have a place to safely put their cash and get financing opportunities . We are making sure that the 250 credit unions that are working with the cannabis businesses continue to give them guidance . I am hoping that the BSA and AI are tools that can also help cannabis businesses . In addition , I hope we can get the SAFE Banking Act out to at least give some regulatory clarity at the national level around cannabis businesses and what the SAFE Banking Act means for BSA compliance . Cannabis businesses are underserved . People have put a stigma around them , and they are also having to go to petty payday lenders to get their business loans . If you are operating a legal business , you deserve to put your cash in a safe place .
AT : What are the latest trends and priorities within credit unions when dealing with AFC ?
RH : We are seeing that the bad actors are getting more nefarious , and we are just having to keep our guard up . Digital identity theft fraud is something that we are seeing played out . I am continuing to talk to internal audit committees and supervisory Boards about how they are building those defense mechanisms and if they are looking at sound internal controls . The main issue with AML is just having to stay two steps ahead of the bad actors . It is being mindful of KYC and doing the appropriate onboarding . The NCUA has credit unions that range in size from $ 300,000 to well over $ 160 billion in assets . We look at the BSA based on the size and complexity of that credit union , so credit unions need to make sure that they are prepared for appropriate onboarding at any given moment .
AT : What is the best piece of advice you ’ ve received in your business career ?
RH : Looking at my career growth and progression , it was not always a linear journey . There were some opportunities for growth and development that were lateral moves . Most of us think linear moves are best but sometimes you need to take a few steps sideways to broaden your skill set and your portfolio . People need to know that lateral moves can also give you the growth that you need to assume higher levels of responsibility , and this is something that in my early days was hard for me to recognize .
The fact that I ’ ve worked in some interesting areas like community development and the movement around diversity , equity and inclusion is a result of lateral moves I have taken .
The other side of this is that the many areas that I ’ ve been advancing and advocating for these past years , I can say I finally have a platform where I can speak with groups like yours and bring awareness to these key causes .
All this has been possible because of the lateral moves along my career journey .
Interviewed by : Karla Monterrosa-Yancey , CAMS , editor-in-chief , ACAMS , kmonterrosa @ acams . org
ACAMS Today September – November 2023 77