We would like to know which compliance policies and safety and soundness policies are required by regulation to be presented to the Board of Directors for approval and how often.
Thanks

I believe all policies should be reviewed and reapproved annually by the board, but this is my personal opinion.

A gentleman from Bankersonline spent sometime going over the following policies with me. Now is my turn to pay back his gracious time and knowledge he spent with me. They are as follows:

The Banking Agencies implemented four distinct regulations that specifically require the Board of Directors administration. Three of the regulations require Board oversightn, but monitoring can be delegated to a Board approved subcommittee such as the Audit Committee. These regulations are as follows:

Bank Security Procedures - Regulation H Subpart F 208.61

GLBA Sections 501 and 505 otherwise known as Interagency Guidelines Establishing Standards for Safeguarding Customer Information Regulation H Part 208 Appendix D

U.S. Patriot Act Title III amending current law for the Bank Secrecy Act (BSA) Regulation H 12 CFR 208.63

The fourth regulation, Interagency Policy on Contingency Planning, (Disaster Recover) requires oversight of the full Board without delegation. FFIEC SP 5 and SP 7

Hope this helps you. My thanks to the gentleman that helped me!!!!

Opinions are mine not my employer.

The Comptroller's Corporate Manual lists the minimum policies and procedures needed as part of the chartering process. For the rest of us, it's a checklist of "must-have" standard equipment policies. The list:

The board must adopt and monitor those policies and procedures applicable to the bank's activities.

1. Lending policy
2. Funds management policy
3. Fiduciary policies and procedures for banks with trust powers
4. Capital policy
5. Internal and external audit policies
6. Insider policies, information in investment decisions or recommendations
7. Compliance policies, including, if applicable:
a. A compliance program covering consumer, fair lending, and community laws and regulations, approved by the board and management, that includes (see the Compliance Handbook):
· Delegation of compliance responsibilities to specific bank personnel.
· Written guidance for, and training of, employees covering applicable laws and regulations.
· A mechanism to report deficiencies and ensure corrective action.
b. Branch closing policy (applicable to national banks with branches), including:
· Procedures for determining objectively which branch or branches to close and which customers to notify.
· Procedures and methods for providing the notices required by 12 USC 1831r-1.
c. A BSA program to fulfill the requirements of 12 CFR 21.21. The board of directors for each national bank must approve written procedures designed to monitor the bank's compliance with the requirements of the Bank Secrecy Act regulations, 31 CFR 103. The compliance program must provide for a system of internal controls to ensure ongoing compliance; provide independent testing for compliance; designate a person responsible for coordinating and monitoring day-to-day compliance; and provide training for appropriate personnel. The BSA compliance program must be approved by the board of directors.
d. [If applicable] Development and implementation of policies and procedures for the administration of the rules governing securities transactions for broker-dealer activities
e. Development and implementation of procedures for the preparation, review for accuracy, and submission of required regulatory reports.
8. Board supervision policy consistent with the "Duties and Responsibilities" booklet of the Comptroller's Handbook and The Directors Book
9.Disaster recovery plan.

Thanks Ken for your information. I placed a copy of your list in my policies book. We, too, are just on the cutting edge of developing all the needed policies and procedures so your information is very helpful to me too.

Opinions are mine not my employer.

Marcia,
I don't know who your primary regulator is, but since we became a State member bank, we have discovered that the State requires more polices be board approved than the Fed does. You might want to look at your state law in this regard.
Leslie

Add to that list a policy governing Interbank Liabiliaties under Regulation F. See 12 CFR 206.3(f).

This came up last year and our OCC examiner gave us the following list of 13 policies which need annual Board approval:

1. Asset Liability
2. Bank Secrecy (including OFAC)
3. Community Reinvestment
4. Compliance
5. Customer Complaints
6. Disaster Recovery
7. Information Technology
8. Liquidity
9. Loans
10. NonDeposit Investments
11. Privacy & Security Policies &Guidelines
12. Security
13. Trust Department

Hope this is helpful--we are a $300 million commercial bank.

I appreciate the input, but show me where it says these must be annually approved by the board. I'll stick to the ones I know. I know of no (federal) requirement that the BSA or compliance policy needs an annual approval. I also know of no requirement to have a CRA policy.

I agree with David, while the Board should approve all policies (and we write board policies separate from the implementing operational procedures and the board directs management to implement and maintain procedures to support the approved policies), most do not require annual approval. At the last bank I was at, the Board was burdened with approving all policies and procedures at least on an annual basis whether there had been any changes or not. When I started, we separated the policies from the procedures and only presented the policies to the board when they changed or the few that actually required annual approval. It freed up a lot of board time and made me look good.

Our examiner's suggested to us that annual approvals were a good thing even if there were not any changes. The intent is that the board direct the bank, and an annual re-look helps verify that we're still going in the direction they want. We accepted that and find that it forces us to give these a good review. I see it as a positive move.

Our policy structure is very much like rclary's. We separate policy from operational procedure and only have the board approve policies. However, we don't have the board approve all policies every year some, BSA, Security, Info Security, and I know I'm missing one more are required to be reviewed an approved annually. Others ALCO, internal asset review, allowance, lending also go annually. Everything else pretty much goes on a revolving 24 month cycle, unless there is a business need to change the policy. This way we've reduced the amount of stuff the the board has to review with no changes - they have appreciated it.

We are regulated by the FDIC and would like to also know the required policies that must be approved by the board annually. We currently have a "conflict of interest" policy the board approves annually. While all policies are approved by the board, the HR Director has stated that we don't need to have this policy any longer. The flavor of the policy deals with employees and their immediate family members dealing with any with any other business that generates "significant financial or management interest" personally. Your thoughts on this specific policy are most welcome.

Required by law or not - have a solid, viable Conflict of Interest policy in effect and approved by the Board. From personal experience - the importance can't be overstated!

The only way I could see not having a CoE policy would be if everything in it was already in one or more other policies. There are too many issues this would address to not have it.

While there are few policies actually required by law, there are many that common banking sense tells us we will have.

You might look for a comparable document for your bank, but Grist gave us this OCC site which includes a CoE requirement for a new bank.

I know that this is an old thread (2002 - you can't find it by searching anymore until now) - but here is an unbroken link to Andy's post.

http://www.occ.gov/publications/publications-by-type/licensing-manuals/charters.pdf

http://www.occ.gov/static/licensing/form-min-policies-procedures-checklist-v2.pdf

I'm tagging on to this old thread again to ask a question. I believe I either heard or read recently a recommendation that banks not present all policies at one time to the board for approval. The reasoning was that directors would not give the policies the attention they should be given if there was a stack of a couple dozen policies to read. The sugggestion was to present a few policies at each meeting along with the other information on the agenda. This makes perfect sense to me, but I can't find (or remember) where I got that information. Does it sound familiar to anyone?

Each bank and each board operates differently. For instance, some banks push various policies to the appropriate committee of the board. For instance, the various investment policies would be approved by ALCO and various loan policies would be approved by the discount committee. This is a board decision and how they want to handle it. Ultimately they have the responsibility.

I know of no official source that suggests it, but promise that many banks schedule policy approvals throughout the year and try to make logical decisions about whether there is a certain "season" when it makes more sense to look at a specific policy.

Mostly the idea smacks of common sense:

* If the board approves a dozen or more policies in one meeting it's a pure indicator that everyone brought their own "rubber stamp" and had a party.

* A meaningful policy review is training in drag and board members need to be repetitively exposed to jargon and concepts in order to have any comprehension whatsoever of what's going on around them.

I've never sat through a board meeting when there wasn't a time where I realized several (if not most) board members had no idea what was being discussed, but they were nodding their heads knowingly...

And then pontificating profusely as though they understood the subject completely.