Let's have some fun. When I audit, train, and the like, I run across some interesting compliance mistakes. These mistakes provide good clues for training -- both who needs training, and ideas to use. The fun part is that these mistakes can be funny to those of us who practice compliance on a regular basis.

Here's my favorite. A teller, having made $100 available to the customer when a check was deposited, AND made another $100 available when the customer represented the check -- which had been returned NSF. It doesn't stop here. The cycle went around a third time. So the end result was that the customer had $300 to use (for a while, anyway) on a check made of rubber. But, by golly, that teller knows to make available the first $100 deposited by check!

What's your favorite?

I always enjoyed the lender who insisted that he didn't need to give rescission notices for a loan challenged by our alert discount clerks. Our second mortgage loan policy didn't apply, he concluded, because he was in 3rd lien position.

I once called a Bank to ask what their rate was on a one year CD. The young lady who answered the phone said it was 8%. I then asked if the 8% she quoted me was the simple interest rate or the effective interest rate. She replied "It's effective right now."

When I was still on the loan desk and creating new programs, we wanted to compare one to the signature loan companies in town. I called one and asked what their interest rate was. They didn't charge any interest I was told. They only charged loan fees.

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Andy Zavoina
Opinions stated are not necessarily that of my employer.

While with another bank I received a phone call from a teller at a branch after receiving a returned hold notice that was incorrect due to not making $100 available. She wanted to let me know that the $100 didn't apply because the customer did NOT want any cash. She actually thought that (after many many training sessions)that when you made the $100 AVAILABLE that you had to make the customer take it with him in cash!

Funny thing is that they actually talked some customers into this and made them take $100 in cash.

At one bank that I reviewed, a teller filled out the monetary instrument log for a $3,000 cash purchase of a cashiers check. In the section of the log where the serial number was to be recorded, the teller dutifully recorded the serial numbers from every one of the 30 $100 bills that were used for the purchase.

bwest, can you imagine the stories those customers are telling? They should particularly be glad they encountered that teller instead of the one who may still be writing down serial numbers from large bills!

At my former bank, one teller routinely placed holds on cash deposits but allowed immediate availability on check deposits. The explanation I received was that customers would be more likely to deposit counterfeit bills than bad checks. I guess that's why he was recording account numbers on all bills he accepted.

At my bank, when loan review staff identify regulatory or law violations, they complete an internal form called "Violation Response Form." The completed form is then submitted to the loan officer who must respond, in writing, to the "alleged" violation. Copies of the form are forwarded to the head lender and to me. And of course, the loan officers always get their undies in wad when they receive one of the forms. For some recent training, I developed a "new form" which I introduced at the session, as a joke. My new form was titled "Boo Boo Response Form." I had my audience rolling on the floor laughing, while also "gently" getting my points across.

I don't see a way to attach a document to this post. If you would like a copy of my "funny form" (which is in word format), send me your email address. I would be happy to share.

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Shirley Wigley

Shirley,
If you'll send it to me at mbguard@bankersonline.com, I'll be happy to post it on the site. Sounds cute!

I was in the check-out lane of a local supermarket where the bank I was working for had just opened one of those new 7 day a week branches. I glanced over at the branch and observed the whiz-kid branch manager setting up a card table with a registration box and an easel announcing "Register to Win a FREE Visa Credit Card". It smelled of one of those impromptu clandestine marketing programs with no prior approval from Compliance, Marketing or Legal. Controlling my outrage, I determined to make this a learning experience. I casually strolled over and inquired whether the 'free' card he was giving away charged any interest. He still didn't recognize me, so I quizzed him further. Do I have to fill out an application? Is it subject to credit approval? Will a bankruptcy disqualify me? Is it "no fee" for life? For 10 minutes I made him explain in detail every feature of this 'new' product. At this point it starts to click he's got a problem. He's turning a little pale hoping I'm not with the AG's office. It was then I pulled out the 'compliance badge' and busted him. His tent folded. We chuckled over that one for a long time.

[This message has been edited by Ken Holmes (edited 08-14-2001).]

These Boo Boo Response forms from Shirley Wigley are priceless!

You can access them here in two formats:

PDF version -- will work with all browsers, but you need the Adobe Acrobat reader to view it.

.doc version -- works best in Internet Explorer. In Netscape, RIGHT CLICK on the link, then choose "Save Link As" and save the file to your hard drive, THEN open it in Word.

[This message has been edited by Mary Beth Guard (edited 08-14-2001).]

Who says compliance people don't have a sense of humor?! I love the booboo form.

I also had a hidden agenda when I started this topic. This kind of story tells a lot about training -- what works, what doesn't and how people understand or fail to understand what is being said. So keep this coming. There's a good use for it.

Hey, it's been such a BAD DAY that DeVonne's theory of the counterfeit bills even sounds logical to ME!!!! Anyway......off to the second of three training sessions today! Changing our Funds Availability Policy....gee sounds fun doesn't it?

The Boo Boo Response form is great! I'll have to use it the next time I have to interview the person here that thought we did not need the new Regulation P because we already have the Bank Secrecy Act.

Several years ago, a bank president called me. He was whispering into the phone (which usually means the examiners are there), and he said, "Mary Beth, have you ever heard of a booklet called 'When Your Home Is On the Line?".

"Well, yes," I replied.

With an anxious-sounding voice, he said, "I haven't heard of it before and I've checked everywhere in the bank. We have NO copies of it. Can you help me get some? The examiners are asking about it."

I knew his small bank well, and had to smile. "Tell me. Have you gotten into home equity lending since I last visited your bank?"

"No. Why?"

I gently explained the source of the requirement -- Reg Z's provisions on HELOCs -- and encouraged him to go out and explain to the examiners that they would need to get a copy of the booklet from a bank that was engaging in the type of activity that would require giving it out.

Boy, was he relieved!!!

I finally realized that many of our common compliance mistakes were happening because employees did not understand how to use our computer and software systems. They didn't know where to look for information needed to service our customers. (So you end up with an affidavit of unauthorized transfer for the $1.00 memo-posted gas station authorization.)

I designed a "Systems Tips" class where we play fastest finger. Everyone sits at a computer and is given a party horn. I display a topic and the first person to find the answer on the system blows their horn and is the "winner". At the end of the session I award prizes to the top three players. This has been well received by our staff (in fact, they are asking when we're having the next class). It's very amusing to observe their reservation to blow the horn at the beginning of the class as compared to the end of the class--it sounds like New Year's Eve.

I was really surprised to learn how much some of our employees do not know about our computer system (i.e., how to look into the bank's ACH warehouse, how to look at an ATM decline message, how to determine the number of ATM and debit cards attached to a specific account, etc.)

It sounds silly. But it works!

This one comes from my days on the dark side (former Fed CA Examiner): Banker carefully told me that he only needed to have one half of the required amount of flood insurance because the second floor of the 2 story building would never flood.

I have another Reg. CC one - After a lot of training I thought the employees understood the $100 rule until I saw the form filled out where a hole was placed on a check for $48,000.00. The teller placed a hold on $100.00 and allowed the customer the use of the other $47900.00!