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 hold intheir vaults. These restrictions have a tremendousimpact on banking profitability. It is a federal lawthat banks must stay complaint to bankingrestrictions.
What is Compliance?Compliance is the act of adhering to a standardor a regulation. Compliance training ismandatory for all banking employees. Thistraining tutorial will provide every employeewith a basic knowledge about the compliancerules 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.
In this training course you will learn:What is regulatory compliance and it how it effects DevonBank.Knowledge of Devon Bank departmental responsibilitiesPenalties for noncompliance and institutional risks.How to Devon Bank employees avoid governmentpenalties and fines.Why compliance is important.
Federal RegulationsIt is Devon Bank’s responsibility to comply with allfederal rules and regulations in every aspect of itsbusiness.All employees are expected to comply withFederal 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.
FDIC ContinuedThe FDIC conducts three annual reviews todetermine whether of not an institution iscompliant to Federal regulations. The threesupervisory activities are complianceexaminations, visitations and investigations.
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 to assessthe quality of an FDIC- supervised institutionscompliance management systemTo implement federal consumer protection statutes andregulationsTo review compliance with relevant laws and regulationsTo initiate effective supervisory action when elements ofan institutions compliance management system aredeficient or a significant violation of the law is found
Compliance VisitationsCompliance visitations are conducted by the FDICto review the compliance posture of newlychartered institutions coming under FDIC-supervision, or in the interval between complianceexaminations to review an institutions progresson 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 follow therules and regulations when performing job duties.Devon Bank is responsible for promotingawareness for violation of laws and regulations.
Regulatory ComplianceRegulatory compliance is the goal that financialinstitutions aspire to reach in the efforts to ensureall personnel are complaint with relevant lawsand regulations.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 toservice and provide products to allretail customers. Branch Operationoversee: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 Bank CustomerService Representatives/ Personal Bankers
Federal Rules and Regulations for Customer Service Representative/ Personal Banker 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 Patriot 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.
Community 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. Also defines numerous account types and requirements for those accounts. Defines different types of transaction and time accounts.Sets number of checks and other third-party transfers allowed for savings accounts.List entities eligible for NOW accounts.Gives current ratios for reserve requirements.
DiversityBank employees must understand the challenges that come with diversity such as the aspect of cultures having different standars for communication and different beliefs.By eliminating sterotypes and embracing diversity, individuals will be able to work through those difference in their workforce and maximixe the productivity 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 Transfers:Regulates electronic transfers as well as issuanceand use of ATM/Debit cards. EFT also,establishes the rights, liabilities andresponsibilities of participants in electronic fundtransfer systems. Such as automated teller machine transfers,telephone bill-payment services, point-of-sale(POS) terminal transfers in stores andpreauthorized transfers from or to a consumer’saccount. Such as direct deposit or social securitypayments.
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.
Regulation V: Fair Credit Reporting ActPromotes accuracy, fairness and privacy of personal information assembled by Credit Reporting Agencies.
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 Privacy ActProtects 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 HarrassmentIt 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.
The 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 Banks.
You have just completed the review of Federal Rules and Regulations for Devon Bank Customer Service Representative/ Personal BankerNext you will complete the 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 #3BSA requires Devon Bank to keep records of funds transferred and transmitted of…. a) $1,000 and higher b) $3,000 and higher c) $5,000 and up d) $10,000 and more
Congratulations you have completed the Devon Bank Customer Service Representative/ Personal Banker Compliance Training!