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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 compliance guidelines that govern Devon Bank, we will next review responsibilites for the Marketing Department
  16. 16. Devon Bank Marketing Department ResponsibilitiesMarketing is a vital branch within Devon Bank due to its purpose of advertising.An effective marketing campaign is essential in regards to attracting consumers to Devon Bank.Appropriate marketing tactics can increase awareness and knowledge of Devon Bank.
  17. 17. Next we will review Federal Rules and Regulations for the Devon Bank Marketing Department.
  18. 18. Devon Bank Marketing Department RegulationsAmerican Disabilities Act:The main aim of this disabilities act is tostop any kind of discrimination inemployment, transportation, publicprograms and services, telecommunicationsservices and public accommodation.
  19. 19. 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.
  20. 20. 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.
  21. 21. Anti-Money LaunderingAre procedures, regulations or laws created to stop money launderers from making money coming from illegal or unethical sources look legitimate.
  22. 22. 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 neighborhood.
  23. 23. 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.
  24. 24. 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.
  25. 25. 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.
  26. 26. Gramm-Leach-Bililey 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.
  27. 27. 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.
  28. 28. 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.
  29. 29. 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.
  30. 30. Regulation B:Equal Credit Opportunity Act (ECOA)Prohibits creditor practices that discriminate on thebasis of race, color, religion, national origin, sex,marital status or age (provided the applicant hasthe capacity to contract) to the fact that all or partof the applicants income derives from a publicassistance program.ECOA also applies to the fact that the applicanthas in good faith ecercised any right under theConsumer Credit Protection Act.
  31. 31. Regulation GG: Unlawful Internet Gambling Enforcement ActUnlawful internet gambling means to “place, receive otherwise knowingly transmit a bet or wager by any means which involves the use, at least in part, of the internet where such bet or wager is unlawful under any applicable Federal or State law.
  32. 32. 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.
  33. 33. Federal Trade Commission Act (FTC)Prohibits unfair or deceptive advertising in any medium. All advertising must be truthful and not mislead consumers.
  34. 34. 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.
  35. 35. Regulation Z: Truth in Lending ActRequires 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.
  36. 36. You have just completed the review of Federal Rules and Regulations for the Devon Bank Marketing Department Next you will complete the practice activities
  37. 37. Question #1The Bank Secrecy Act:a) Does not require financial institutions to prevent money launderingb) Requires the report of cash purchases of $5,000c) None of the above
  38. 38. Question #2Regulation Z: Truth in Lending Act requires creditors who deal with consumers to:a) Pay commission retail sales departmentb) Acknowledge consumer billing complaintsc) Contains requirements for advertising and disclosures for open-end credit
  39. 39. Question #3The Federal Trade Commission Act prohibits:a) Advertising in any mediumb) Unfair advertisingc) Deceptive advertising in any mediumd) Both B and C
  40. 40. Congratulations you have completed the Devon Bank Marketing Department Compliance Training!