New NCUA Guidebook Has Advice for Credit Unions on Digital Services Contracts

ALEXANDRIA, Va. (Nov. 4, 2016) – Credit unions can get information and advice on negotiating contracts for digital services in a new guidebook from the National Credit Union Administration.

The Basics of Data Processing Contracts, available now on NCUA’s Small Credit Union Learning Center, provides detailed, comprehensive instructions on negotiating contracts with third-party vendors for digital services.

 

“Knowing how to negotiate a strong contract is essential to running any business,” said JeanMarie Komyathy, Acting Director of NCUA’s Office of Small Credit Union Initiatives. “Credit unions frequently turn to outside companies to provide crucial digital services, including data processing, mobile banking and information technology. If these business relationships aren’t properly managed, a credit union can face potential risks, unanticipated costs and legal expenses. That’s why a good contract is so important, and our new guidebook helps credit unions write those contracts.”

 

NCUA’s new guidebook covers the elements of the contracting process, including:

  • Requesting and evaluating bids;
  • Performing due diligence on potential vendors;
  • Negotiating terms, including pricing, performance requirements and liabilities; and
  • Contract management and compliance.

NCUA’s Office of Small Credit Union Initiatives fosters credit union development and the effective delivery of financial services for small credit unions, new credit unions, minority depository institutions and credit unions with a low-income designation.

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