Is There Life After Compliance?

What happens to compliance specialists? Is it just more compliance out there or is there something else? One former luminary of the compliance world has entered the ranks of the best sellers. Stanley Pottinger, former Assistant Attorney General for Civil Rights has published a first novel, The Fourth Procedure, and hit the best seller list. It is a work of fiction, but it's fun seeing the view of Washington politics presented by one who was once in a political appointment himself.

I know many of you would like to wake up to hear that the DOJ fair lending cases are also works of fiction, but that's just not the case.

On the theory that if we all become novelists, there may be no-one left to buy our books, we need to ask: Where else does this job lead?

Compliance is a profession that takes the practitioner throughout the entire bank. Not one banking product, department, or service is untouched by compliance.

In the Board Room, compliance is actively involved in developing policies for compliance, developing programs for CRA, and in administering Regulation O. Almost any Board action must take into account the possible impact of regulatory compliance requirements.

Every loan product - including commercial loans - is affected by an array of regulations. In fact, the regulation of loan products and lending practices is so pervasive that one could even say compliance was "born" in lending.

In more recent years, compliance regulations have been directed toward deposit products, including uninsured deposit products. Even the bank facility is subject to regulation. Bank security issues and access for the disabled affect decisions made about the structure and design of the bank building itself.

But limiting our attention to regulations underestimates the full scope of the compliance discipline. Compliance is now truly a management skill. Success at compliance depends on how well the process is managed and at how well compliance tasks are integrated into the work of the bank.

In order to design, implement, and manage a compliance program, a compliance manager has to become familiar with the workings of the entire bank. To design compliance procedures, the manager must know how each task is performed and fit the procedures into the tasks. The more accurate and realistic the procedures are, the better the compliance performance will be.

Effective compliance procedures also should take customers into account. Forms and notices should be accurate, but they should also be designed so that customers can read and understand them. Procedures must take customer service into account. This means that compliance steps are designed either to be a service or to ensure that bank staff can provide good service without being stopped by compliance requirements.

A person who can implement and manage an effective compliance program has many more skills than simply the ability to read a regulation. A person who can implement and manage an effective compliance program knows the bank inside and out. A person who can implement and manage an effective compliance program should be recognized as one of the bank's most valuable assets.

Copyright © 1996 Compliance Action. Originally appeared in Compliance Action, Vol. 1, No. 4, 2/96