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#2084531 - 06/22/16 01:02 PM
Re: Severity of Non-Compliance By Reg
Cheli
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10K Club
Joined: Jul 2001
Posts: 83,364
Galveston, TX
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Since all violations of regulation or law could be subject to the FDICA Section 8 CMP provisions, does it really matter what the individual laws may say?
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com
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#2084535 - 06/22/16 01:11 PM
Re: Severity of Non-Compliance By Reg
Cheli
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Member
Joined: Jul 2013
Posts: 80
Wisconsin
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If you PM me your email address I will get you a copy of the penalties I have found. I use this for my compliance risk assessment.
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#2084645 - 06/22/16 05:29 PM
Re: Severity of Non-Compliance By Reg
Cheli
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Diamond Poster
Joined: Dec 2013
Posts: 1,399
CA
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The ABA keeps a database of all CMP's issued, by regulation and regulator. It's on their website but I cant remember where. I think it is updated annually. I have a copy of what I think is the most recent (2012-2015).
PM me your email and I will send you a copy.
As Randy said, there are consequences for all violations . It helps to know what are the regulator's hot buttons at the moment though.
Thanks and good luck!
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The opinions expressed are mine, do not represent the opinions of my employer, and they are not to be taken as legal advice.
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#2084661 - 06/22/16 06:08 PM
Re: Severity of Non-Compliance By Reg
Cheli
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10K Club
Joined: Jul 2001
Posts: 83,364
Galveston, TX
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The OCC has a chart and it would apply to all banks at 12 CFR 19.240.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com
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#2084692 - 06/22/16 07:43 PM
Re: Severity of Non-Compliance By Reg
Cheli
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Diamond Poster
Joined: Nov 2004
Posts: 2,309
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The CFPB published an interim final rule adjusting civil money penalties for inflation. https://www.gpo.gov/fdsys/pkg/FR-2016-06-14/pdf/2016-14031.pdf
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Opinions expressed are my own and not necessarily those of my employer. They are not legal advice.
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#2084701 - 06/22/16 08:00 PM
Re: Severity of Non-Compliance By Reg
Cheli
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Power Poster
Joined: Jun 2003
Posts: 7,658
Florida
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One thing additional - for fair lending, if it is housing related, creditors will generally be sued under the Fair Housing Act, as the penalties are more onerous than ECOA.
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Integrity. With it, nothing else matters. Without it, nothing else matters.
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#2084768 - 06/22/16 10:41 PM
Re: Severity of Non-Compliance By Reg
Cheli
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10K Club
Joined: Oct 2000
Posts: 10,180
Toano, VA
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Cheli- It's been 20+ years since this topic was on my desk, but the concepts haven't changed.
The natural expectation is that your project will end with a nice neat spreadsheet detailing the good, the bad, and the ugly. A matrix will be helpful, but some things don't fit neatly in boxes. As an example, Darth HMDA mentioned the "violation of the month" problem. When the regulators get a burr under their saddles about one violation or another, they ratchet up the examination effort and that usually results in more findings which results in more enforcement actions and possibly more monetary penalties. The statutory penalties didn't change, but your risk did.
Another game-changer is recurring violations. Regulators REALLY dislike repeats. Last exam, you promised to fix whatever caused this kind of violation. The fact that it's still there moves it up to a management problem (plus the penalties, if any, that applied to all of your infractions since the last exam.) Repeat findings make for frosty exit conferences. (Be sure your resume is up to date.) Once again, the statutory penalties for the violation didn't change, but your risk did.
Regardless of how you plan to use your matrix, save the top category for violations that can result in unacceptable consequences. This is your "zero tolerance" list--you always do everything it takes to avoid these violations. Mine included any infraction (RESPA Section 8, for example) that could result in one or more bank officers or employees going to prison. Also on this list were violations that could restrict our franchise (such as the combined effects of a finding of credit discrimination triggering a "substantial non-compliance" CRA rating.) Although it's tough to pick a cut-off point, violations that can lead to massive penalties (money laundering, for example) and retroactive reimbursements (TIL and possibly other rules) deserve your highest attention.
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...gone fishing.
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#2084947 - 06/23/16 09:01 PM
Re: Severity of Non-Compliance By Reg
Cheli
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10K Club
Joined: Oct 2000
Posts: 10,180
Toano, VA
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After finishing the comment above, I remembered another experience where I didn't see a HUGE risk until it hit me in the face.
The regulators were in for an exam and their scope included transfers from MMDAs. We had adequate policy, procedure, and deposit contract language to enforce the "no more than 6 per month" rule, but they found lots of exceptions.
It was a simple reg with no built-in penalties and an obvious remedial solution. Not a big deal.
I wasn't very concerned until they explained that what could only be described as an administrative weakness would be grounds for them to reclassify the MMDAs as transaction accounts and require us to post retroactive reserves. Still not a show stopper. Then they clarified that they were talking about the entire $250,000,000 portfolio, not just the three pages of exceptions they handed me. With fed funds in the 8% range and a 10% difference in the reserve requirements for transaction accounts vs. MMDAs, I was staring at a penalty in the $1.5 to $2.0 million range...per year! By the next morning, that portfolio was squeaky clean and we dodged the bullet.
Stuff happens.
Last edited by Richard Insley; 06/23/16 09:05 PM.
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...gone fishing.
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