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  1. 1. IntroductionThe banking industry is continuously under the watchful eye ofthe government and the Federal Reserve. The government is incharge of setting restrictions on the banking industrys borrowinglimits and the amount of deposits that banks hold in their vaults.These restrictions have a tremendous impact on bankingprofitability. It is a federal law that banks must stay complaint tobanking restrictions.
  2. 2. What is Compliance?Compliance is the act of adhering to a standard or a regulation. Compliance training is mandatory for all banking employees. This training tutorial will provide every employee with a basic knowledge about the compliance rules and regulations that pertain to their departments.
  3. 3. Compliance Training ObjectiveThis training is intended to provide participantswith a step-by-step guide for regulatorymanagement while following existing federal,state and local regulatory laws corresponding tothe Banking branch departments.
  4. 4. In this training course you will learn:What is regulatory compliance and it how it effectsDevon Bank. Knowledge of Devon Bank departmentalresponsibilitiesPenalties for noncompliance and institutional risks.How to Devon Bank employees avoid governmentpenalties and fines.Why compliance is important.
  5. 5. Federal RegulationsIt is Devon Bank’s responsibility to complywith all federal rules and regulations inevery aspect of its business.All employees are expected to comply withFederal rules and regulations.
  6. 6. FDIC Compliance GuidelinesCompliance examinations are the primarymeans the FDIC uses to determinewhether a financial institutions is meetingits responsibility to comply with therequirements and proscriptions of federalconsumer protection laws and regulations.
  7. 7. FDIC ContinuedThe FDIC conducts three annual reviewsto determine whether of not an institutionis compliant to Federal regulations. Thethree supervisory activities are complianceexaminations, visitations andinvestigations.
  8. 8. 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)
  9. 9. Compliance ExaminationsCompliance examinations are primarilydone to assess the quality of an FDIC-supervised institutions compliancemanagement systemTo implement federal consumer protectionstatutes and regulationsTo review compliance with relevant lawsand regulationsTo initiate effective supervisory actionwhen elements of an institutionscompliance management system aredeficient or a significant violation of the
  10. 10. Compliance VisitationsCompliance visitations are conducted bythe FDIC to review the compliance postureof newly chartered institutions comingunder FDIC- supervision, or in the intervalbetween compliance examinations toreview an institutions progress oncorrective actions.
  11. 11. Compliance InvestigationsCompliance investigations are conductedprimarily to follow-up on particularconsumer inquiries or complaints,including fair lending complaints.
  12. 12. Institution AwarenessAll employees of Devon Bank shouldfollow the rules and regulations whenperforming job duties.Devon Bank is responsible for promotingawareness for violation of laws andregulations.
  13. 13. Regulatory ComplianceRegulatory compliance is the goal thatfinancial institutions aspire to reach in theefforts to ensure all personnel arecomplaint with relevant laws andregulations.At Devon Bank, all employees arerequired to conduct business in a legaland ethical manner.
  14. 14. 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
  15. 15. Now that you are aware of FDIC complianceguidelines that govern Devon Bank, we will next review responsibilites for the Branch Operations department.
  16. 16. Devon Bank Branch OperationsThe Branch Operations goal is to serviceand provide products to all retail customers.Branch Operation oversee: Tellers Customer Service Representatives Personal Bankers Bookkeeping/ Accounting
  17. 17. Branch Operation ResponsibilitiesOperations of individual branches need tobe examined, analyzed and evaluated inorder to ensure job duties are beingperformed.Branch operations other responsibilitiesare managing branches, ensuringadherence to Devon Bank standards andensuring policies are being upheld.
  18. 18. Now that you are aware of FDIC complianceguidelines that govern Devon Bank, we willnext review responsibilites for the Electronic Banking Department
  19. 19. Devon Bank Electronic Banking DepartmentThe goal of the electronic banking (e-banking) department is to provide financialtransactions to Devon Bank employees on asecure webpage.
  20. 20. E-BankingE-Banking intertwines with Branchoperations at its subset. It has its owncompliance regulations, which will be statedin the following manual.
  21. 21. Next we will review Federal Rules and Regulations for the Devon Bank Electronic Banking Department.
  22. 22. Federal rules and regulations for the Electronic BankingAmerican Disabilities Act The main aim of this disabilities act is tostop any kind of discrimination inemployment, transportation, publicprograms and services, telecommunicationsservices and public accommodation
  23. 23. 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.
  24. 24. 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.
  25. 25. Anti-Money LaunderingAre procedures, regulations or laws created to stop money launderers from making money coming from illegal or unethical sources look legitmate.
  26. 26. 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.
  27. 27. 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.
  28. 28. 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.
  29. 29. Regulation E: Electronic Funds TransfersRegulates electronic transfers as well as issuance and useof ATM/Debit cards. EFT also, establishes the rights,liabilities and responsibilities of participants in electronicfund transfer systems. Such as automated teller machine transfers, telephone bill-payment services, point-of-sale (POS) terminal transfers instores and preauthorized transfers from or to a consumer’saccount. Such as direct deposit or social securitypayments.
  30. 30. 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.Business meals, gifts of modest value, etc. are exceptions when it pertains to building customer relations with the individual.
  31. 31. 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.
  32. 32. Regulation V: Fair Credit Reporting ActPromotes accuracy, fairness and privacy of personal information assembled by Credit Reporting Agencies.
  33. 33. 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.
  34. 34. 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.
  35. 35. 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 whichit may disclose nonpublic personal informationabout consumers to nonaffiliated third parties.It also provides a method for consumers to“optingout”of that disclosure.
  36. 36. 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.
  37. 37. 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.
  38. 38. 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.
  39. 39. 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.
  40. 40. 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.
  41. 41. 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.
  42. 42. National Automated Clearing House Association (NACHA)Develops and maintains operating rules,standards, prcedures and business practice forAutomate Clearing House Network (NCH).As well as for electronic payments in the areas ofInternet commerce, electornic bill and invoicepresentment payments.
  43. 43. Automated Clearing House: (ACH)A nationwide funds transfer system, linked by a computer network to process electronic payment transactions such as debit or credit entries between financial insitutions.
  44. 44. You have just completed the review ofthe Federal Rules and Regulations for the Electronic Department Next you will complete the practice activities
  45. 45. Question #1Regulation V promotes privacy of personal information collected by creditors:a) Trueb) False
  46. 46. Question #2Diversity in the workplace:a) Encourages insitutions to eliminate stereotypesb) Maximizes productivity in an organizationc) Embraces employee cultural differencesd) All the above
  47. 47. Question #3Which 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
  48. 48. Congratulations you have completed the Devon Bank Electronic Department Compliance Training!
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