IntroductionThe banking industry is continuously under thewatchful eye of the government and the FederalReserve. The government is in charge of settingrestrictions on the banking industrys borrowinglimits and the amount of deposits that banks holdin their vaults. These restrictions have atremendous impact on banking profitability. It is afederal law that banks must stay complaint tobanking restrictions.
What is Compliance?Compliance is the act of adhering to a standard or aregulation. Compliance training is mandatory for allbanking employees. This training tutorial will provideevery employee with a basic knowledge about thecompliance rules and regulations that pertain to theirdepartments.
Compliance Training ObjectiveThis training is intended to provideparticipants with a step-by-step guide forregulatory management while followingexisting federal, state and local regulatorylaws corresponding to the Banking branchdepartments.
Federal RegulationsIt is Devon Bank’s responsibility tocomply with all federal rules andregulations in every aspect of itsbusiness.All employees are expected to complywith Federal rules and regulations.
FDIC Compliance GuidelinesCompliance examinations are the primary meansthe FDIC uses to determine whether a financialinstitutions is meeting its responsibility to complywith the requirements and proscriptions of federalconsumer protection laws and regulations.
Who Regulates Devon Bank?Office of Comptroller of the Currency (OCC)Federal Reserve Member Banks (FRB)Federal Deposit Insurance Corporation(FDIC)Housing and Urban Development (HUD)
Compliance ExaminationsCompliance examinations are primarily done toassess the quality of an FDIC- supervisedinstitutions compliance management systemTo implement federal consumer protectionstatutes and regulationsTo review compliance with relevant laws andregulationsTo initiate effective supervisory action whenelements of an institutions compliancemanagement system are deficient or a significantviolation of the law is found
Compliance visitationsCompliance visitations are conducted by theFDIC to review the compliance posture ofnewly chartered institutions coming underFDIC- supervision, or in the interval betweencompliance examinations to review aninstitutions progress on corrective actions.
Compliance InvestigationsCompliance investigations are conductedprimarily to follow-up on particular consumerinquiries or complaints, including fair lendingcomplaints.
Institution AwarenessAll employees of Devon Bank should followthe rules and regulations when performingjob duties.Devon Bank is responsible for promotingawareness for violation of laws andregulations.
Regulatory ComplianceRegulatory compliance is the goal that financialinstitutions aspire to reach in the efforts to ensureall personnel are complaint with relevant laws andregulations.At Devon Bank, all employees are required toconduct business in a legal and ethical manner.
Things to RememberDo not discriminate against a client or employee because ofrace, gender, religion, national origin, color, age, disability,sexual orientation or preference or veteran statusCommit to the highest standard of business and ethicalconduct in all activities while representing Devon BankRespect the rights of othersAvoid conflicts of interest and self dealingBe award of laws, rules, regulations and policies that apply toyour jobPromote accuracy and truth in Devon Bank businesstransactionsMaintain absolute confidentiality regarding client’s recordsReport any perceived wrongdoing to your supervisor of theDevon Bank Compliance DepartmentDo not destroy any records except in accordance to DevonBank policy
Now that you are aware of FDIC complianceguidelines that govern Devon Bank, we will nextreview responsibilites for the Branch Operations department.
Devon Bank Branch OperationsThe Branch Operations goal is to service andprovide products to all retail customers. BranchOperation oversee:TellersCustomer Service RepresentativesPersonal BankersBookkeeping/ Accounting
Branch Operation ResponsibilitiesOperations of individual branches need to beexamined, analyzed and evaluated in order toensure job duties are being performed.Branch operations other responsibilities aremanaging branches, ensuring adherence toDevon Bank standards and ensuring policies arebeing upheld.
Next we will review Federal Rules and Regulations for Devon BankAccounting/Bookkeeping department.
Devon Bank Accounting/Bookkeeping RegulationsAmerican Disabilities Act The main aim of this disabilities act is to stop anykind of discrimination in employment,transportation, public programs and services,telecommunications services and publicaccommodation
Bank Secrecy ActThis act requires financial institutions in the United States to assist United States government agencies to detect and prevent money laundering.Financial institutions are required to keep records of cash purchases of negotiable instruments and file reports of cash purchases of these negotiable instruments of ten thousand dollars or more.
Patriot ActThe function of the Patriot Act is to deter and punish terrorist acts in the United States and around the world.The act prevents, deters and helps prosecute international money laundering and financing of terrorism.
Anti-money LaunderingAre procedures, regulations or laws created to stop money launderers from making money coming from illegal or unethical sources look legitmate.
Communtiy Reinvestment ActDesigned to encourage commercial banks and savings associations to meet the needs of borrowers in all segments of their communities, including low-and moderate-income neighborhoods.
Regulation D: Reserve RequirementsSets reserve requirements thresholds. Defines numerous account types and requirements forthose accounts.Defines different types of transaction and time accounts.Sets number of checks and other third-party transfersallowed for savings accounts.List entities eligible for NOW accounts.Gives current ratios for reserve requirements.
DiversityBank employees must understand the challengesthat come with diversity such as the aspect ofcultures having different standars forcommunication and different beliefs.By eliminating sterotypes and embracing diversity,individuals will be able to work through thosedifference in their workforce and maximixe theproductivity of the organization.
Elderly AbuseLegislation is being passed across the county due to many senior citizen being the victims of financial exploitaion. Should a bank fail to report suspicions of elder financial abuse, they will be held liable.
Regulation E: Electronic Funds TransfersRegulates electronic transfers as well as issuance anduse of ATM/Debit cards. EFT also, establishes the rights,liabilities and responsibilities of participants in electronicfund transfer systems. Such as automated teller machine transfers, telephonebill-payment services, point-of-sale (POS) terminaltransfers in stores and preauthorized transfers from or toa consumer’s account. Such as direct deposit or socialsecurity payments.
Regulation V: Fair Credit Reporting ActPromotes accuracy, fairness and privacy of personal information assembled by Credit Reporting Agencies.
Bank Bribery ActAmends the federal bank bribery law. Prohibits any employees, officers, directors, agents and attorneys of financial institutions form accepting anything of value for or in connection with any transaction/exchange.
Regulation CC: Funds AvailabilitySpecifies when banks must make customers deposited funds available for withdrawal.Requires disclosure of interest payment and liability schedules and establishes rules designed to speed the collection and return of check.
Federal Deposit Insurance ActRegulates bank safety and security standards relating to information and internal audit systems, internal controls, credit, underwriting, interest rate exposure, loan documentation, asset growth and compensation fees and benefits for insiders.
Gramm-Leach-Bliley ActRequires financial institutions that offer customers financial services or products like financial or investment advice. Loans or insurance to explain their information sharing practices to their customers as well as to safeguard sensitive data.
Regulation P: Privacy of Consumer Financial InformationRequires financial institutions to provide notice tocustomers about its privacy policies and practices.Regulation P describes the conditions under which it maydisclose nonpublic personal information aboutconsumers to nonaffiliated third parties.It also provides a method for consumers to“opting out”ofthat disclosure.
Information SecurityBank employees must understand the importance of protecting customer and employee information.Complying with the laws and regulations that required due diligence, following proper security policies and procedures, as well as reporting potential problems.
Physical SecurityNational Institute for Occupational Safety and Health depicts workplace violence as any physical assault, threatening behavior or verbal abuse occurring in the work setting.Devon Bank employees should be knowledgeable and maintain awareness in regards to possible work place violence.
Right to Financial PrivacyProtects a customers financial privacy, while still fulfilling the needs of government agencies.Specifies when and under what conditions, a financial institution may release customer financial records to the federal government.
Sexual HarassmentIt is necessary for all employees to be knowledgeable in what is and what is not acceptable behavior at Devon Bank.In order to minimize the banks sexual harassment complaints, all employee should keep a look out for inappropriate conduct/language, speak up to prevent it and report incidents with the HR.
Regulation DD: Truth in SavingsRequires disclosures for consumer deposit accounts (e.g… DDA, Time, Savings, Now.)Contains advertising requirements.Requirements for information on periodic statements.Maturity notice for time accounts.Change in terms notices.Annual percentage yield calculations.
Office of Foreign Assets Control (OFAC)`Administers and enforces economic sanction programs primarily against countries and groups of individuals, such as terrorist and narcotics traffickers.
Regulation J: Check CollectionGoverns the collection of checks and other cash and non-cash items. Handles returned check by Federal Reserve Bank
Regulation B: Equal Credit Opportunity Act (ECOA)Prohibits creditor practices that discriminate onthe basis of race, color, religion, national origin,sex, marital status or age.The regulation also requires creditors to notifyapplicants of action taken on their applicationsor report actions taken against the applicantscredit history.
Regulation GG: Unlawful Internet Gambling Enforcement ActUnlawful internet gambling means to “place,receive otherwise knowingly transmit a bet orwager by any means which involves the use, atleast in part, of the internet where such bet orwager is unlawful under any applicable Federalor State law.
Regulation Q: Interest on DepositsProhibits interest on demand deposits andprovides guidelines and restrictions relating tointerest on deposits and advertising.Gives requirements for offering premiums fordemands deposit accounts.
You have just completed the review of Federal Rules and Regulations for the Devon Bank Accounting/Bookkeeping DepartmentNext you will complete the following practice activities
Question #1Regulation DD contains the following:a) Requirements for information on periodic statementsb) Monthly rate calculationsc) Change in term noticesd) Both A and C
Question #2Which act encourages commercial banks and savings associations to meet the needs of low income borrowers:a) Gramm-Leach-Bililey Actb) The Bank Bribery Actc) Community Reinvestment Act
Question #3The Office of Foreign Asset Controladministeres and enforces economic sanctionsagainst banks:a) Trueb) False
Congratulations you have completed the Devon Bank Accounting/Bookkeeping Department Compliance Training!