Academic journal article ABA Banking Journal

Don't Delegate Compliance

Academic journal article ABA Banking Journal

Don't Delegate Compliance

Article excerpt

Why don't senior managers worry about compliance? The common attitude is

that that's compliance officers' business-top officers worry about activities that affect the bottom line.

However, regulators speaking at ABA's recent National Conference for Compliance Managers, Bank Counsel, and Auditors sent CEOs and others a message: Compliance does make a difference.

Why worry? Applications are a prime example, according to Shawn McNulty, program manager for compliance in the Federal Reserve's Division of Consumer and Community Affairs. She explains that an institution's compliance with regulations and statutes is weighed before an application is approved. If it is found wanting, that can be considered a management deficiency. "Certainly, "

she says, "if you have an outstanding enforcement action pending with a regulatory agency-the Fed in particular that's going to come up as an issue. "

Compliance can also affect the bottom line directly when a bank violates a statute that carries monetary penalties. As an example, Janice Smith, director of FDIC's Office of Consumer Affairs, points to Regulation Z. There are cases pending that could have a tremendous impact on capital," she says.

Customer relations are intertwined with compliance, according to John McDowell, director of consumer activities at the Office of the Comptroller of the Currency. …

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