Risk-Based Compliance Exam Procedures
by Mary Beth Guard, BOL Guru
The FDIC has posted its revised compliance examination procedures on the Internet. Even if your primary federal regulator is someone other than the FDIC, it's still prudent to ask yourself:
Do we have a sound compliance management systems?
Is our compliance management system integrated into the overall risk-management strategy of our institution and part of the daily routine of management and employees?
Does our compliance management system adequately provide for reliable methods for us to keep abreast of our compliance responsibilities and build new ones into business processes?
Do we review our operations to ensure responsibilities are carried out and requirements are met?
Do we incorporate the three required elements of an effective system: board and management oversight, compliance program, and compliance audit?
Does the board clearly communicate their expectations about compliance?
Are resources allocated to compliance functions that are commensurate with the level and complexity of the institution's operations?
Does the compliance officer make periodic reports to the board?
Has the board granted the compliance officer sufficient authority and independence to cross department lines, have access to all areas of the institution's operations, and effect corrective action?
Does the compliance officer take responsibility for ensuring management and employees are trained in consumer protection laws and regulations?
Is the compliance officer coordinating responses to consumer complaints?
Does the compliance officer ensure that correction actions are taken, when necessary?
Does our compliance program consist of policies and procedures, training, monitoring, and consumer complaint response?
Is the compliance program in writing?
Are our compliance policies and procedures properly written and updated as required?
Do our policies and procedures provide employees with the information needed to perform a business transaction?
Have we included in our policies and procedures definitions, citations, sample forms, directions for routing, reviewing, retaining and destroying transaction documents?
Do our line management and staff receive specific, comprehensive training in laws and regulations, as well as internal policies and procedures that directly affect their jobs?
Do we have a regular training schedule for directors, management, staff, and third-party service providers?
Do we periodically assess the knowledge and comprehension of employees on subject matters on which they have been trained?
Do we do regularly scheduled reviews of disclosures, calculations, notices, filing, retention, promotional material, state laws and regulations, internal compliance communications, and third-party service provider operations?
The original version appeared in the September 2003 edition of the Oklahoma Bankers Association Compliance Informer.
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