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August 26
Keeping Bank Secrets: Things you Can Go to Jail for Telling;
Mary Beth Guard

September 8
Checkup for your RDC Program;
Susan Orr

September 10
Critical Issues on Certificates of Deposit;
Deborah Crawford

September 16
S.A.F.E. Act - Auditing for Compliance;
Patricia Cashman

September 22
FinCEN's Beneficial Owners Proposal: What It Can Mean for You;
Sonja Kriegsmann and John Burnett

September 23
Bankruptcy 101;
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#1925297 - 05/21/14 02:54 PM Compliance Violations by Staff - Consequences???
OceanView Offline
Junior Member

Registered: 12/06/13
Posts: 39
Loc: San Diego
Would be interested to hear from other compliance officers how their companies have implemented consequences to staff for repeated compliance violations. End of year performance reviews, etc.

Compliance can't have direct reports to/from operations and sales....so what to do when staff has been trained, retrained but the in/action continues. As a hypo - something as simple and as important as putting docs away in a locked desk when heading to lunch.

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General Discussion
#1925306 - 05/21/14 03:03 PM Re: Compliance Violations by Staff - Consequences??? [Re: OceanView]
osucpa Online
Platinum Poster

Registered: 05/13/11
Posts: 605
I would think you would take a risk based approach and apply it across the board. With saying that, could potentially open the bank up in the case of a termination. The example you state above, is more of a bank policy issue rather than a compliance issue. Some people will never get it.

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#1925340 - 05/21/14 04:02 PM Re: Compliance Violations by Staff - Consequences??? [Re: OceanView]
rlcarey Offline
10K Club

Registered: 07/16/01
Posts: 49690
Loc: Galveston, TX
Warn and counsel, written warning and counsel, termination.

That is the usual process for all failures to properly performing as required, unless something egregious requires immediate termination.
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The opinions expressed are my own, take them or leave them.

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#1925429 - 05/21/14 06:39 PM Re: Compliance Violations by Staff - Consequences??? [Re: OceanView]
Rocky P Online
Power Poster

Registered: 06/24/03
Posts: 4541
Loc: South Carolina
Have it as part of their review. (Depending on the bank size)have exceptions reported to the board by name.
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I survived an OCC Fair Lending/Comparative File Review of 1,756 loans with no findings that stuck!
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#1925452 - 05/22/14 08:25 AM Re: Compliance Violations by Staff - Consequences??? [Re: OceanView]
osucpa Online
Platinum Poster

Registered: 05/13/11
Posts: 605
I will agree it should be part of their review but reporting to the board by name may go a little to far. Remember employees are human and they are going to make mistakes.

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#1925461 - 05/22/14 08:53 AM Re: Compliance Violations by Staff - Consequences??? [Re: osucpa]
Cape Codder Offline
100 Club

Registered: 07/25/11
Posts: 153
If a staff member repeatedly fails to follow procedure, whether compliance-related or other, the individual should be held accountable via an oral, written, final written warning. Otherwise procedures are just words on a piece of paper.
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Nothing difficult is ever easy.

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#1925587 - 05/22/14 11:02 AM Re: Compliance Violations by Staff - Consequences??? [Re: OceanView]
HappyGilmore Online
10K Club

Registered: 06/11/04
Posts: 17383
Loc: Moron, Mongolia
management within the area where the compliance issues are occurring must see these as violations and address them with staff. If they don't put value in the process, then their staff won't. This is an education process for management, that must be directed from senior management of the bank. If that backing is not there, it certainly won't trickle down.

Certainly when compliance is performing an audit in a given area, if they see violations of this nature it should be inluced as an action item or finding on the final report, which will force management to respond.

I can't think of any annual performance review i've written in the past 20+ years that mentions a compliance issue.
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#1925728 - 05/22/14 01:23 PM Re: Compliance Violations by Staff - Consequences??? [Re: OceanView]
Ken_Pegasus Offline
10K Club

Registered: 08/30/01
Posts: 17249
Loc: Another trip around the sun
Quote:
If a staff member repeatedly fails to follow procedure, whether compliance-related or other,


I agree. Failing to follow compliance requirements is not a greater offense than most (depending on the circumstances), but it's certainly no less of an offense under any circumstance.
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The world is not a wish granting factory. Hazel Grace Lancaster

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#1925909 - 05/22/14 04:14 PM Re: Compliance Violations by Staff - Consequences??? [Re: OceanView]
rlcarey Offline
10K Club

Registered: 07/16/01
Posts: 49690
Loc: Galveston, TX
Presumably these repeat violations are also being reported to the Audit Committee. Where are they in regards to this manner. This is a top down issue and unless your Audit Committee and Board see these as issues, why should management care??? It has to start at the top.
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The opinions expressed are my own, take them or leave them.

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#1925954 - 05/22/14 04:42 PM Re: Compliance Violations by Staff - Consequences??? [Re: OceanView]
John Burnett Online
10K Club

Registered: 10/27/00
Posts: 30222
Loc: Cape Cod
This article might be of interest. It's a bit of a macro approach rather than focusing on the individual miscreant, but it does put some things in perspective.

http://www.cbinsight.com/banks-trouble-compliance.html
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John S Burnett
BankersOnline.com

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#1926012 - 05/22/14 08:08 PM Re: Compliance Violations by Staff - Consequences??? [Re: OceanView]
OceanView Offline
Junior Member

Registered: 12/06/13
Posts: 39
Loc: San Diego
Great feedback, everyone. RL, we are a small shop so no such luck as a audit committee. Thanks for the article, John.

Agree it needs to be top-down otherwise fixes won't stick for the long haul. At the next meeing I may have to pull out an excerpt from Gladwell's book on the impact of fixing broken windows....

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