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How can I establish a compliance program in response to the USA PATRIOT Act?


Question: How can I establish a compliance program in response to the USA PATRIOT Act?

Answer: Practical Tips for Establishing a Compliance Program

Some large institutions are exploring how to develop a single corporate compliance program that addresses and manages all of the regulatory compliance issues that financial institutions face on a daily basis. Even if your institution is not very large, the task of addressing all applicable regulations can be daunting. Many individuals within your financial institution are probably not familiar with all of the regulatory laws and regulations that your institution is subject to. There are some practical steps you can take to ensure that your employees have the necessary tools to make informed compliance-related decisions.

So what are you, as a financial institution, to do? Establish a core team to conduct a needs assessment in which you collect all the regulatory information that impacts the various business areas of your institution.

Next, assign a compliance officer to each department who will work as a team with the corporate or primary compliance officer.

  • Task each compliance officer with learning and understanding all the regulations that apply to his/her area.
  • Task this person with documenting what his/her compliance program will cover and how it will work.
  • Be sure to include a monitoring system for each department that will enable the compliance officer to perform audit-related functions on his/her own and periodically assess the level of compliance for that department.
  • Conduct a working session with compliance officers to determine how they will report on findings resulting from monitoring and internal audits to the institution's Board.
  • Develop a training program on appropriate areas where the primary compliance officer can facilitate learning of compliance laws and regulations.
These recommendations are available in further detail in the November/ December 2003 issue of the ABA's Bank Compliance. This issue presents a valuable case study presented by Kelly Walsh and Roxann Bulman, both compliance professionals at the Bank of Hawaii. Their article even provides a template for Compliance Programs that can be used as a framework for any compliance program at any institution.

If your executive management is looking for an institution-wide effort, this is a solid way to begin. These steps will help protect your organization against regulatory compliance risk and promote continual improvement. The network of compliance roles lends itself to having a skilled and informed team that can address these compliance issues and help mitigate risk. As the writers of the aforementioned article point out, this will, in turn, protect and increase shareholder value, which is a chief goal of any organization.

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First published on BankersOnline.com 1/5/04
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