Who Does The Most Compliance?

We don't usually think of compliance as a competition. But because compliance is risk-based, it is important to risk management to know who does compliance and how much they do. Without that information, the compliance manager cannot provide the right amount of support and information. Since it is the compliance manager's job to provide this kind of support, and the tools with which to do the job, knowing who does compliance is key to being a successful compliance manager.

Every bank will do things a little differently, but there are probably some strong similarities in who does the most compliance. Compliance involves customer service - providing information, calculating and providing disclosures, answering questions, and treating each customer fairly and with respect.

So, who does the most of this work? Not the compliance manager, not the CEO, probably not even branch managers. They serve as resources and they manage. But they don't actually perform the tasks required by compliance regulations. The front line does most of this work. The front line is the bank's compliance line. And when you analyze who has what responsibility for compliance by looking at where tasks from each regulation are actually performed, you will see that the staff in the bank that has the most compliance to do is the tellers.

In a recent article on Regulation CC, I referred to tellers as having limited education (not many have advanced degrees) but important and difficult work to do to comply with Regulation CC. One reader took offense at my tongue-in-cheek reference to the education level of tellers. He came to the defense of tellers, stating that while "most tellers do not have college degrees ... this does not mean that they are not intelligent and that they are not capable of handling their job responsibilities."

I totally agree. I did not mean to impugn tellers, their abilities, or the work that they do in any way. It is tellers that keep banks running. It is tellers that sell customers on the bank. It is tellers that provide banking services. It is tellers that form the image of the bank. When customers think of the bank, they think of tellers.

Most importantly, it is tellers that do the most compliance. And this is where risk management gets scary. We expect miracles from tellers. We expect performance of the near-impossible, regardless of education or experience. We expect tellers to handle every transaction at the window with speed and accuracy while also knowing how to answer customers' questions about a wide variety of topics such as electronic transactions, CRA, and tax withholding, how fill out CTRs, how to treat customers fairly and equally, what information to give customers about the return on their deposits, how to identify and handle a suspicious activity, and how to calculate and place holds while the customer gets frustrated and even angry. This is a seriously under-rated job.

Reminding managers that tellers have on average less education than many other staff in the bank is simply a way of calling attention to the level of risk the bank assigns to tellers. It does not mean that without a college degree tellers are not capable of handling that risk. In fact, they do so with amazing consistency. Tellers come through for banks day after day after day.

In looking at regulatory changes or new regulations, such as the idea for two categories of non-local checks put forward in the FRB's announcement, we should be looking at more than the pure regulatory question. We should be looking at who does the work and how the work gets done. In this case, as in many regulatory issues, the work and the solution involves tellers.

As compliance managers, you must "know your tellers" and how they work to give effective comments on this and other regulatory proposals. Don't overlook them. They do compliance.

Consult with your tellers about compliance tasks. Ask them how they do them. Find out what it is like to face an angry customer and place a hold. Find out how it feels to suspect a customer of something illegal. And then, use this information to enrich your comment letters by sharing it with the regulators. Remind them who really does compliance!

Copyright © 1999 Compliance Action. Originally appeared in Compliance Action, Vol. 4, No. 2, 2/99