Understand before you begin what is mandatory, versus what you have flexibility on.
Next, sketch out an outline of required components. If the law or regulation you are dealing with is particularly complex, make a checklist of the required components. This will help ensure you cover all the bases.
Do not set yourself up for an inadvertent policy violation by making your policy stricter than it needs to be. In any instance where you are going beyond the required minimums, allow yourself some wiggle room. For example, authorized signatories on corporations and other legal entities do not have to have their identity verified under the CIP rules, yet you may want to have an internal policy to identify them anyway. Instead of saying the bank "will" identify such persons, you might instead want to say "The bank may also, at its discretion, obtain and verify identifying information from authorized signers for such entities."
Name your policy with a title that is truly reflective of its subjective matter.
Begin with a sentence or two that outlines what the policy is, followed by a statement of purpose and a sentence or two on scope.
Keep in mind what a policy is supposed to be. The term "policy" is defined to mean "A course of action, guiding principle, or procedure considered expedient, prudent, or advantageous." Financial institutions should view policies as guiding principles. Procedures should be contained in a separate document. Policies will remain fairly constant. Procedures are more frequently changed.
Realize that one day your policy may become Exhibit A in a lawsuit involving your bank. How will it sound to third parties, like a jury, if that happens? Does it sound positive, fair, objective? Is it clear?
Use policies drafted by others as examples, but don't simply adopt someone else's policy without first customizing it to the needs and circumstances of your institution. One size does not fit all.
Set the right tone. The words you use when writing your policy should reflect the seriousness with which you view the subject matter. State your position strongly. Example: "It shall be the policy of ________ Bank not to tolerate discrimination in any aspect of credit on the basis of race, sex, religion, national origin, color, gender, marital status, receipt of public assistance, or use of rights under consumer credit protection laws."
Keep tweaking. After you've finished your first draft, allow others to read it and offer suggestions before you submit it for board approval. By having multiple perspectives, you're in a better position to end up with a final product that accomplishes your objective and works for your institution.
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