Compliance Update with Amy K
by Amy Kleinschmit
Chief Compliance Officer
3/12/2020

As we are all aware, the news is filled with COVID-19, or the Coronavirus and the store shelves are empty of hand sanitizer. It is time to prepare, but don’t panic. The Federal Financial Institutions Examination Council (FFIEC) released updated guidance last week identifying actions that financial institutions should take to minimize the potential adverse effects of a pandemic.

Be sure to review this updated guidance which can be found here. This guidance also includes links to a number of useful resources.

Remember, business continuity plans should address the threat of a pandemic outbreak and its potential impact on the delivery of critical financial services. As discussed in the guidance, this includes a documented strategy scaled to the stages of a pandemic outbreak, a comprehensive framework to ensure the continuance of critical operations, a testing program, and an oversight program to ensure that the plan is reviewed and updated.

The nature of the global economy virtually ensures that the effects of a pandemic event will be widespread and threaten not just a limited geographical region or area, but potentially every continent. It is important to note that pandemics generally occur in multiple waves, each lasting two to three months.

Experts predict that perhaps the most significant challenge likely from a severe pandemic event will be staffing shortages due to absenteeism. A planning assumption from The Implementation Plan for the National Strategy for Pandemic Influenza is that rates of absenteeism will depend on the severity of the pandemic. In a severe pandemic, absenteeism attributable to illness, the need to care for ill family members, and fear of infection may reach 40 percent during the peak weeks of a community outbreak, with lower rates of absenteeism during the weeks before and after the peak.

A credit union, no matter their size, needs to plan for a pandemic event when developing their business continuity program.

Your credit union’s business continuity program (BCP) should provide for a preventive program – this includes things like monitoring potential outbreaks and educating staff. The documented strategy should address efforts that are consistent with the effects of a particular stage of a pandemic outbreak – CDC suggests there are 6 intervals. (See guidance at link about for additional discussion on all these areas.)

Your program should include a comprehensive framework of facilities, systems or procedures that provide the credit union the capability to continue its critical operations in the event that large numbers staff are unavailable for prolonged periods. Consider also visitor procedures.

As with all BCP you must test the program to ensure it is effective and review the program on an ongoing basis to ensure it is up to date.

Board of Directors role – An institution’s board of directors is responsible for overseeing the development of the pandemic plan. The board or a committee thereof should also approve the institution’s written plan and ensure that senior management is investing sufficient resources into planning, monitoring, and testing the final plan.

Business Continuity Management (BCM) business impact analysis should include potential effects of a pandemic. Risk assessment/risk management also factor in as the credit union’s risk assessment process is critical and has a significant bearing on whether BCM efforts will be successful.

Additional resources – InfoSight includes additional information to assist you.  In the Security Channel, a new section has been added under Business Continuity Planning: Pandemic Preparedness.

In addition to this content, you will want to also review your state’s health authority websites. All of them should have COVID-19 pages that provide local information and recommendations.

South Dakota Department of Health.

North Dakota Department of Health

 

<< Go to Memo List