1. Introduction
The banking industry is continuously under the watchful eye of
the government and the Federal Reserve. The government is in
charge of setting restrictions on the banking industry's borrowing
limits and the amount of deposits that banks hold in their vaults.
These restrictions have a tremendous impact on banking
profitability. It is a federal law that banks must stay complaint to
banking restrictions.
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. Compliance Training Objective
This training is intended to provide participants
with a step-by-step guide for regulatory
management while following existing federal,
state and local regulatory laws corresponding to
the Banking branch departments.
4. In this training course you will learn:
What is regulatory compliance and it how it effects
Devon Bank.
Knowledge of Devon Bank departmental
responsibilities
Penalties for noncompliance and institutional risks.
How to Devon Bank employees avoid government
penalties and fines.
Why compliance is important.
5. Federal Regulations
It is Devon Bank’s responsibility to comply
with all federal rules and regulations in
every aspect of its business.
All employees are expected to comply with
Federal rules and regulations.
6. FDIC Compliance Guidelines
Compliance examinations are the primary
means the FDIC uses to determine
whether a financial institutions is meeting
its responsibility to comply with the
requirements and proscriptions of federal
consumer protection laws and regulations.
7. FDIC Continued
The FDIC conducts three annual reviews
to determine whether of not an institution
is compliant to Federal regulations. The
three supervisory activities are compliance
examinations, visitations and
investigations.
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. Compliance Examinations
Compliance examinations are primarily
done to assess the quality of an FDIC-
supervised institution's compliance
management system
To implement federal consumer protection
statutes and regulations
To review compliance with relevant laws
and regulations
To initiate effective supervisory action
when elements of an institution's
compliance management system are
deficient or a significant violation of the
10. Compliance Visitations
Compliance visitations are conducted by
the FDIC to review the compliance posture
of newly chartered institutions coming
under FDIC- supervision, or in the interval
between compliance examinations to
review an institution's progress on
corrective actions.
12. Institution Awareness
All employees of Devon Bank should
follow the rules and regulations when
performing job duties.
Devon Bank is responsible for promoting
awareness for violation of laws and
regulations.
13. Regulatory Compliance
Regulatory compliance is the goal that
financial institutions aspire to reach in the
efforts to ensure all personnel are
complaint with relevant laws and
regulations.
At Devon Bank, all employees are
required to conduct business in a legal
and ethical manner.
14. Things to Remember
Do not discriminate against a client or employee because of
race, gender, religion, national origin, color, age, disability,
sexual orientation or preference or veteran status
Commit to the highest standard of business and ethical
conduct in all activities while representing Devon Bank
Respect the rights of others
Avoid conflicts of interest and self dealing
Be award of laws, rules, regulations and policies that apply to
your job
Promote accuracy and truth in Devon Bank business
transactions
Maintain absolute confidentiality regarding client’s records
Report any perceived wrongdoing to your supervisor of the
Devon Bank Compliance Department
Do not destroy any records except in accordance to Devon
Bank policy
15. Now that you are aware of FDIC compliance
regulations that govern all banking
institutions, we will next review
responsibilities for the Lending Department.
16. Devon Bank Lending
Department
Lending has many function within Devon
Bank. It is an important branch which
allows Devon Bank to serve its customers
by providing expertise in their knowledge
of lending.
It is vital for every lending assoicate to be
knowledgable in lending federal rules and
regulations
17. Next we will review Federal Rules and
Regulations for the Devon Bank
Residental Lending Department.
18. Devon Bank Residental Lending
Department Regulations
Regulation AA: Unfair or Deceptive Credit
Practices
Establishes procedures for receiving and
handling consumer complaints regarding
institutions.
Consumers sending complaints to
regulatory agencies.
Prohibits institutions from using certain
provisions in their consumer credit
contracts
19. American Disabilities Act
The main aim of this disabilities act is to
stop any kind of discrimination in
employment, transportation, public
programs and services, telecommunications
services and public accommodation.
20. Bank Secrecy Act
This 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.
21. Patriot Act
The 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.
22. Anti-Money Laundering
Designed to encourage commercial banks
and savings associations to meet the
needs of borrowers in all segments of their
communities, including low-and moderate-
income neighborhood.
23. Community Reinvestment Act
Designed 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.
24. Diversity
Bank 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.
25. Elderly Abuse
Legislation 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.
26. Regulation B:Equal Credit
Opportunity Act (ECOA)
Prohibits creditor practices that discriminate on the
basis of race, color, religion, national origin, sex,
marital status or age (provided the applicant has
the capacity to contract) to the fact that all or part
of the applicant's income derives from a public
assistance program.
ECOA also applies to the fact that the applicant
has in good faith ecercised any right under the
Consumer Credit Protection Act.
27. Bank Bribery Act
Amends 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.
28. Regulation V: Fair Credit Reporting
Act
Promotes accuracy, fairness and privacy of
personal information assembled by Credit
Reporting Agencies.
29. Fair Debt Collection Practices Act
Curbs abusive debt-collection practices by
promoting fair debt collection and
providing consumers with an opportunity
for disputing and obtaining validation of
debt information in order to ensure the
information's accuracy.
30. Fair Lending Law
Ensures equal objective and non-baised
treatment of existing and prospective
customers in all credit-related transactions
are made.
31. National Flood Insurance Reform Act
Instructs banks not to increase, extend or
renew any designated loan unless the
building, mobile home or any personal
property.
Securing the loan is covered by flood
insurance for the term of the loan for the
paricular type of property under the act.
32. Gramm-Leach-Bliley Act
Requires 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.
33. Regulation C:Home Mortgage
Disclosure Act (HMDA)
This is intended to provide the public with
loan data that can be used to help
determine whether financial instituions are
serving the housing needs of their
communities.
This requires certain lenders to collect data
from the various types of home buying/
improvement loan application.
34. Information Security
Bank 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.
35. Federal Reserve Act 23A-Relations
with Affiliates
RRegulates transactions between a bank
and it affiliates. The following transactions
are not permitted by banks:
Parent company's overdrawn checking
account with bank subsidiary
Payment of organization costs by bank
subsidiary
36. Federal Reserve Act 23B- Restricitons
on Transactions with Affiliates
Expands the range of retrictions on
transactions with affiliates.
Any transaction by a member bank or its
subsidiary with any person shall be
deemed to be a transaction with an
affiliate of such bank, if any of the
proceeds of the transacion are used for
the benefit of or transferred to an affiliate.
37. Regulation W: Transations between
Banks and their Affiliates
Implements sections 23A and 23B of the Federal
Reserve Act, which establish certain restrictions
on and requirements for transactions between a
member bank and its affiliates.
It applies to all fedrally-insured depository
instituions and requires that transactions
between member banks uphold stipulations.
38. Physical Security
National 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.
39. Real Estate Lending
Reminds institutions that strong risk
management practice and appropriate
levels of capital are essential elements of
a sound commercial real estate.
40. Service Members Civil Relief Act
Offers short-term financial and legal relief to
military personnel and their dependants, by
placing specific requirements on the financial
service industy and legal system.
It provides a wide range of protections for
individuals entering, called to active duty in the
military or deployed service members.
41. Sexual Harassment
It 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.
42. Regulation Z: Truth in Lending
Requires disclosure of significant terms of
consumer credit in prescribed language and
formats.
Contains requirements for advertising and
disclosures for open-end credit.
Contains requirements for advertising and
disclosures for closed-end mortgages.
43. You have just completed the review of
Federal Rules and Regulations for the
Devon Bank Residential Lending
Department
Next you will complete the practice
activities
44. Question #1
Regulation W establishes restrictions on
transactions against banks and their
affiliates:
a) True
b) False
45. Question #2
Which regulation ensures bank employees protect
customer and employee information:
a) Bank Secrecy Act
b) Anti-Money Laundering Act
c) Information Security
d) Gramm-Leach-Bliley Act
46. Question #3
Which act encourages commercial banks and
savings associations to meet the needs of low
income borrowers:
a)Gramm-Leach-Bililey Act
b)The Bank Bribery Act
c) Community Reinvestment Act
47. Congratulations you have completed the
Devon Bank Residential Lending
Department Compliance Training!
