For Compliance Sake

By Andrews, William | Independent Banker, January 1995 | Go to article overview

For Compliance Sake


Andrews, William, Independent Banker


It wasn't long ago that compliance was considered a small part of an FDIC exam. But that was before FIRREA, FDICIA and a host of other banking regulations. Now the FDIC has a whole battery of examiners Just to look at compliance issues. A simple exam process that once took at most a few days can now take weeks.

"Community banks weren't doing it [compliance audits] themselves, so the regulators stepped in and said we'll do it for you," says Mary Ann Boda, compliance officer for the $150 million-asset Baraboo National Bank, Baraboo, Wisconsin. "We thought we could do it [compliance] when we had time, but no one ever seemed to be able to fit it in."

Community groups have also put extra emphasis on the exams and their findings, adding that much more pressure on examiners to closely scrutinize all financial institutions.

Just as the examinations are growing, so are the penalties. Monetary penalties are still rare, but the noncompliance findings mean more expenses because they result in more detailed paperwork and, possibly, higher FDIC insurance premiums.

"They usually home in on a certain thing and examine it to death:' Emily Dawsey says of compliance examiners. Dawsey is the vice president for compliance and loan review at the $101 million-asset First National Bank of Denham Springs, Louisiana. That bank underwent a safety and soundness exam in November. Compliance examiners were expected to follow closely behind.

Compliance was something a community banker used to do in his or her spare time, but that doesn't work any more, Dawsey says. Dawsey's entire work day is spent monitoring regulations and making sure that bank employees have all the necessary documents they need to fill out or hand out (as in the case of Truth-in-Savings).

The Need for Training

Community bankers are refocusing their efforts on being prepared for the growing responsibilities of compliance and the compliance exams.

They generally agree that constant and up-to-date training and education are key to good compliance. Many community bankers are getting additional training from a variety of sources, including a group of bankers who completed the IBAA's new compliance officer certification program last fall.

Completion of IBAA's four compliance workshops is required to attain certification. Bankers have four years to complete the certification program. Whether or not certification is achieved, bankers agree that the courses contain valuable information.

Many other compliance programs are geared for larger institutions and structure meetings around their desires and schedules rather than focusing in on the compliance issues faced by community bankers, says John Crawford, vice president of the $19 million-asset Gateway National Bank, St. Louis. Crawford has attended compliance training courses for each of the last three years, following poor examination findings.

Crawford attended the IBAA program because Gateway had received a "satisfactory" rating on its latest Community Reinvestment Act exam. Bank officials had expected an "outstanding" rating, so Crawford wanted to find out where the institution had fallen short.

CRA and fair lending are areas of compliance exams that tend to get much of the publicity, especially with the current rewriting of CRA rules. But those are by no means the only areas of growing compliance scrutiny, bankers say. Compliance exams and seminars generally cover lending, operations and deposits, while including a general overview of compliance matters. All are areas of increased scrutiny.

Examiners in flood-prone areas will also look closely at the institution's adherence to federal flood insurance rules, bankers say. Crawford adds that the Bank Secrecy Act is another area of growing concern among examiners.

The trick for community bankers, according to Crawford, is learning how to stay on top of compliance matters while maintaining a very limited staff.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

For Compliance Sake
Settings

Settings

Typeface
Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.