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June 13, 2011


Regulations Prohibiting Money Laundering Challenge Mexican CUs

WOCCU partnership participants share compliance lessons

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2011_6_13_Caja Yanga-Servus CU Visit
Servus Credit Union's Mark Foote (second from right) welcomed a delegation from Mexico's Caja Yanga that included (from left) Gabriel Martinez, Manuel Hernandez, Ana Roccia and Abel Martinez. 

EDMONTON, Alberta, Canada — Credit unions of all sizes in both the United States and Canada are being challenged by more restrictive regulations driven by the financial crisis, especially in the area of money laundering. Credit unions in Mexico are feeling a similar burden from a government now requiring more comprehensive risk management procedures and anti-money laundering efforts. Recently, credit unions on both sides of the U.S. border joined forces to prepare to better meet those challenges.

Last month, Caja Yanga of Yanga, Veracruz, Mexico, sent three delegates to Edmonton, Alberta, to study risk management and anti-money laundering practices used by Servus Credit Union's Enterprise Risk Management Program, as well as the Canadian credit union's corporate security policies and procedures. The technical internship marked the second such visit between Caja Yanga and Servus Credit Union, which have worked together since 2009 as part of World Council of Credit Unions' (WOCCU) International Partnerships Program.

Caja Yanga Chairman Manuel Hernandez, along with Abel Martinez, risk manager, and Gabriel Martinez, accounting and finance vice president, studied the operations of Servus' corporate security team, which is responsible for all of the credit union's anti-money laundering and anti-fraud efforts. Servus' Mark Foote, corporate security compliance manager, and Ana Roccia, corporate security senior analyst, shared the credit union's strategies for detecting suspicious activities and identifying accounts representing a high risk for money laundering activity.

"Money laundering has long been recognized as an international issue, and sharing with the group from Caja Yanga gave us unique insight we would not normally have had," Foote said. "It's through these important relationships that we can combat money laundering and terrorist financing at an elevated level."

Caja Yanga found many of the Canadian credit union's strategies feasible for implementation in Mexico due to the fact that anti-money laundering regulations are similar in both countries thanks to their adherence to the guidelines of the Financial Action Task Force, an inter-governmental organization focused on developing and promoting national and international policies to combat money laundering and terrorist financing.

The group looked closely at Servus' risk management program, which identifies eight main risk categories threatening the credit union. Ruth Kizlyk, Servus' enterprise risk management director, explained how each risk category can impact the credit union and how each category is measured quantitatively, allowing the risk management committees to decide how much risk the credit union can bear and how to mitigate that risk when it exceeds desired limits.

As the internship ended, the Caja Yanga delegates had a long list of ideas they could adapt to fit Caja Yanga. "One of the hardest aspects of the new regulations is the lack of specificity in how we need to measure and mitigate risk," Abel Martinez said. "With the help of Servus, we were able to confirm that we are on the right track. We also now know what tools we will need to build a good risk management program as we continue to expand our services."

The Caja Yanga and Servus Credit Union relationship is one of 22 such relationships in WOCCU's International Partnerships Program and the only one involving an individual Canadian credit union.



World Council of Credit Unions is the global trade association and development agency for credit unions. World Council promotes the sustainable development of credit unions and other financial cooperatives around the world to empower people through access to high quality and affordable financial services. World Council advocates on behalf of the global credit union system before international organizations and works with national governments to improve legislation and regulation. Its technical assistance programs introduce new tools and technologies to strengthen credit unions' financial performance and increase their outreach.

World Council has implemented more than 290 technical assistance programs in 71 countries. Worldwide, 57,000 credit unions in 103 countries serve 208 million people. Learn more about World Council's impact around the world at www.woccu.org.

 


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Contact: Joshua Fetting
Organization: World Council of Credit Unions
E-mail: jfetting@woccu.org
Phone: (608) 334-6646
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