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#60109 - 02/10/03 03:17 PM
Incentive for Compliance
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Anonymous
Unregistered
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Good Morning! I am curious to know if you or your department is incented based on compliance performance or other related factors? If so, would you mind sharing how your shop works. For example, what measurements do you use and how is it scored?
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#60110 - 02/10/03 03:21 PM
Re: Incentive for Compliance
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10K Club
Joined: Dec 2002
Posts: 40,766
Turnpike Exit 10
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Hi, Yes, we have one it's called "Comply or Die". Just kidding, I just remind them during training sessions that it's everyone's job to keep our bank safe and in compliance with applicable laws and regs. I feel that compliance is necessary, not above and beyond their job descriptions, it is part of their job descriptions. I also remind them that it will also ensure that we have jobs.
_________________________
Get your facts first, then you can distort them as you please. - Mark Twain
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#60111 - 02/10/03 03:45 PM
Re: Incentive for Compliance
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Diamond Poster
Joined: Apr 2002
Posts: 1,677
SmallTown, USA
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Mgmt has talked about tying compliance into evaluation process, but so far they haven't done anything. This usually only comes up when one bank or another has a bad compliance audit. You know, when everyone fianlly gets all concerned about compliance !
_________________________
The opinions expressed are mine and do not necessarily reflect those of my employer.
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#60112 - 02/10/03 03:51 PM
Re: Incentive for Compliance
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Anonymous
Unregistered
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Do you have specific measurements and are they attached to $$ provided you reach certain levels?
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#60113 - 02/10/03 04:04 PM
Re: Incentive for Compliance
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Power Poster
Joined: Jan 2002
Posts: 2,706
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We have a lot of branches who don't believe compliance is important. We have have been toying with the idea of financially penalizing lenders who consistantly refuse to comply. Another large bank I know hits their lenders with a $250 fine for every compliance issue they find. Needless to say their lenders pay attention.
_________________________
Beauty is only skin deep...but ugly goes all the way to the bone!
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#60115 - 02/10/03 05:27 PM
Re: Incentive for Compliance
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10K Club
Joined: Aug 2002
Posts: 34,318
under the Lone Star
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Our compliance officer is a member of executive management and is included in the incentive program. Factors include exam ratings, external and internal audits, budget performance, special projects; as well as overall goals like ROAA, ROE, loan and deposit growth.
_________________________
Societies that do not find work in and of itself "pleasing to God and requisite to Man," tend to be highly corrupt.
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#60117 - 02/10/03 06:38 PM
Re: Incentive for Compliance
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Anonymous
Unregistered
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At my previous bank my CEO wanted to fine lenders and branch managers with noncompliance, but I was not in favor of doing that. I proposed a quarterly report to executive committee with appropriate lenders, managers, or city presidents present. My staff reviewed files for compliance and credit quality. I had a legand on my table showing the most common errors noted on the report and labled them minor, major, and significant. I always showed it as a percentage adn my report was broken down by market. It worked better than anyone imagined. The directors really asked the supervisors why and when their percentages would improve. By my 3rd report our errors had diminished tremendously. I originally started with loans and when I left that bank we were developing a report for deposit reports as well. It really sparked a competition among the markets to have the lowest percentage of errors.
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#60118 - 02/10/03 08:05 PM
Re: Incentive for Compliance
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Power Poster
Joined: Jun 2001
Posts: 6,153
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Wouldn't they pay even more attention if their buddies who do comply are rewarded? Get someone to unscrew the wallet from their back pocket and include some compliance bonuses along with the penalties.
_________________________
Better a patient man than a warrior, a man who controls his temper than one who takes a city
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#60119 - 02/10/03 08:08 PM
Re: Incentive for Compliance
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10K Club
Joined: Sep 2002
Posts: 13,965
TN
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As my commercial lender fiance stated, you shouldn't have to reward someone to do their job. He said about the only thing that would incent a lender (in his opinion) is fear, whether that be job or money.
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My Opinions Only
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#60120 - 02/10/03 08:27 PM
Re: Incentive for Compliance
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Power Poster
Joined: Aug 2002
Posts: 7,353
Anchorage Alaska
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Well frankly, I was pretty happy to work my bumm off for a huge incentive check every year, but...I worked in fear of being out of compliance. The banks I worked for did not take compliance lightly. If management's back bone is in the requirement to comply with regulations, your lenders will comply. If management won't take it seriously, no one will!
_________________________
Dawn Coursey VP/CRA Queen
CRA Rating is in...Oh who cares...I'm home with the baby.
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#60122 - 02/10/03 10:14 PM
Re: Incentive for Compliance
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Diamond Poster
Joined: Jul 2002
Posts: 1,678
United States
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I don't think that management should directly use incentives or disincentives to ensure compliance. I too think that it's a sign of a deficiency in the corporate culture. However, in the end, it does come down to the money. Those employees who won't do their part (there is no can't here) should be reprimanded and/or let go. Success in compliance means that the bank avoids fines, but it also means that the bank has an opportunity to build a good reputation. The bank will tarnish its reputation when it has to go back and refund fees or defend itself in court because its managers or employees have a cavalier attitude towards compliance. IMHO, complete customer service means that the bank conducts all parts of a transaction-- those that the customer can see and understand and those that he/she can't-- with excellence. Just my two cents.
_________________________
Opinions expressed are solely my own.
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