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#422641 - 09/14/05 09:28 PM Compliance Dilemma

I'm not sure what category to post this question under, so I'm going to put it here.

Where do other compliance officers draw the line between being a compliance officer with compliance advice and giving legal advice???

I am an attorney, although I am now inactive and am not licensed in the state where I work. I have been out of law school for 20 years, and my legal jobs were spent doing more research and writing than practicing.

However, I often have "compliance" questions directed at me which I feel are better directed to the bank's attorney (none on staff--they have to pay him when they ask questions). I have told them when I don't feel the question is appropriate for me, but they still ask (sometimes I think it's just to save a buck since they have to pay me anyway!). I don't know how much I should be going through my state's statutes and interpreting them to give my employer an opinion. Researching and interpreting federal banking regulations that we could be examined on--yes, no problem with that. But how far should I be going with state statutes?

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#422642 - 09/14/05 09:33 PM Re: Compliance Dilemma
D2Xs Offline
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Joined: Jan 2002
Posts: 2,706
If you aren't comfortable with it you can do the research and give it to them and say this is what I found. Leave it to them to make the final decision and interpret it. I do compliance but some of the things I look up are legal. I just give my findings to my boss and tell him this is what I found. I leave it at that.
Beauty is only skin deep...but ugly goes all the way to the bone!

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#422643 - 09/14/05 11:36 PM Re: Compliance Dilemma
berico Offline
Gold Star
Joined: Jun 2004
Posts: 290
That's how I ended up getting my license. I was the compliance officer (many, many years ago)and kept getting questions of a legal nature. I told them if they wanted legal advice, send me to law school. So they did.

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#422644 - 09/15/05 05:32 AM Re: Compliance Dilemma
Princess Romeo Offline

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Princess Romeo
Joined: Jun 2001
Posts: 8,272
Where the heart is
I would answer questions from the perspective of what could get us in trouble during a regulatory exam. If the question would ask how we would fare in court, I would direct them to legal counsel.

But you are correct in that MANY Compliance Officers get sent questions of a legal nature, and the challenge is to recognize when something stops being a "regulatory" question and when it becomes a legal matter.
Regulations are a poor substitute for ethics.
Just sayin'

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#422645 - 09/15/05 12:14 PM Re: Compliance Dilemma
1 Peter 5:7 Offline
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1 Peter 5:7
Joined: Jun 2001
Posts: 1,339
The definitions of "practice of law" or the "unauthorized practice of law" vary from state to state. As compliance officer, I've always drawn the line (politely) when asked to draft something that's contractual, like terms and conditions for an account, for example. But drafting general disclosures, I have no problem there. In any event, when I have to start looking up case law to help me understand a particular law (usually a state law), I go to outside counsel. That always seemed to me to be drifting into the practice of law.
Opinions are mine not my employer's, and should not be taken as legal advice.

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#422646 - 09/15/05 12:46 PM Re: Compliance Dilemma

I'm an active attorney, but also the Compliance officer. When I give advice on a subject, I usually take care to research it fully before providing an answer. If the operational area still has questions or disagrees with my interpretation, I encourage them to consult our outside counsel.

I technically wasn't hired to give legal advice, but I give it almost as often as I do strictly compliance matters.

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#422647 - 09/15/05 12:57 PM Re: Compliance Dilemma
Beagles22 Offline
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Joined: Jan 2004
Posts: 3,626
State of confusion
Many compliance issues ARE legal issues. We are following state and federal statutes and banking regulations that if not heeded could land the bank in court. It isn't a 'legal issue' just because it could end up in front of a judge, many times it is still just a compliance question at the beginning. If we keep our officers in compliance with the rules, hopefully we don't end up in a legal forum. I am not really sure how you could do compliance without having someone ask you rather legal questions that could also be answered by a lawyer. It may be that your legal background before you were in compliance makes you see them as more of a legal question. Looking into the regulations and statutes and interpretating them is a big part of what I do as a compliance person at my bank. They know I am not a lawyer and it is only my interpretation, as your bank knows you are not licensed to practice law either. Unless it crosses the line to where they are asking you specific court/lawsuit questions I think you are mostly just doing the job they hired you to do. Just my humble opinion.
Going to church doesn't make you a christian any more that standing in your garage makes you a car.

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#422648 - 09/15/05 01:33 PM Re: Compliance Dilemma
Hated By Some Offline
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Posts: 13,603
Somewhere vanilla
I think what the 'Hen was trying to say also was that they don't pay us to be lawyers but simply to be business operators with a solid foundation in interpretation. The business result is that our interpretations have a greater chance of being interpreted favorably by a court if they should ever come into question. Not that this is any better than what anyone else can do but each bank makes its decision on personnel based on the unique makeup of a particular bank and its particular circumstances.

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