On a regular basis, the banking regulators publish information about the most commonly cited compliance violations. The purpose of these pronouncements is to note areas in compliance programs that might need resources and attention, and also to announce areas of emphasis for the upcoming year. Compliance staff would be well advised to pay attention as they deploy Read More
Over the last several years, bank governance, risk and compliance (GRC) programs worldwide have been placed under increased scrutiny by regulators, elected officials and the public. The myriad of new regulations and requirements, primarily driven by the Basel III framework and regulations such as Dodd-Frank, have increased the complexity and costs to maintain regulatory compliance. However, truly Read More
There have been two significant pieces of recent regulatory guidance that will directly impact the overall administration of your institution’s Bank Secrecy Act/Anti-Money Laundering (BSA/AML) compliance program. While these two regulations may seem, at first glance, to be unrelated, a more comprehensive review will reveal that they are very much tied together. As technology has changed, so Read More
It has always been a vital necessity for financial services companies to ensure that they are properly training their employees in matters of regulatory compliance. But, for too long, compliance issues and compliance training have been placed in separate silos, set apart from the real day-to-day work of the bank and even from its overall goals and Read More
Finally, years after the global financial crisis and the new regulations and consumer mistrust it produced, banks are looking at forecasts of increased consumer and commercial lending activity. However, their inefficient, slow and error-prone paper-based loan origination processes could leave many of them at a competitive disadvantage – and compliance hazard. According to a global study by Read More
What to do about overdraft (OD) fees, or the loss thereof? For banks with assets over $10 billion, service charge income on deposit accounts, with OD income being the largest component, fell by almost half between 2010 and 2013 and at a rate twice as fast as for smaller competitors. But it won’t stop here. After the Read More
In the Bourne series by Robert Ludlum, Jason Bourne, the main character, is a highly trained (or mentally programmed) assassin for the United States who was highly successful at taking out targets. In the lending space we may need to start thinking about alternative lenders as the Jason Bournes of the industry. Like Bourne, they’re nimble, quick Read More
An increasing number of community bankers are asking themselves whether its worth the hassle – and the risk – to originate mortgages, particularly after the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the subsequent promulgation of the qualified mortgage and ability-to-repay rules. These regulations, if not followed correctly, could increase banks’ liability. Read More
Should a financial institution be held fully responsible for unknowingly supporting terrorist financing when their compliance program is up to date? The answer to this question, which was posted on a LinkedIn anti-money laundering blog, would seem obvious: a robust, proactive compliance program should serve as a shield against civil or criminal enforcement actions. But it does Read More
The Consumer Financial Protection Bureau’s (CFPB’s) new rules for overdrafts (ODs) on checking accounts are scheduled for July of this year. Based on our analysis of the overdraft rules for prepaid issued December 23, 2014, we project the most likely scenario is that the new rules will reduce financial institution revenues from OD revenues by 56% after Read More
The heat is back on overdraft. Now that the Consumer Financial Protection Bureau (CFPB) and other regulatory agencies have finalized a number of enforcement actions against large credit card businesses, they are re-focusing attention on banks’ overdraft programs and practices, following similar investigations several years ago. Many banks have anticipated this additional scrutiny and made substantial changes Read More
Banking and financial services organizations are built upon complex business rules that regulate many day-to-day interactions, from lending decisions to detecting fraudulent activity. These rules are constantly modified because of changes in company policy or new regulations or to keep an organization competitive. As such, rule changes need to be handled swiftly and with careful attention. If Read More
Business and management experts wrote nearly 30 years ago that one of the keys to a successful business is to break down the barriers between staff areas. Author Mary Walton summarized this point in her book, The Deming Management Method: “People can work superbly in their respective departments, but if their goals are in conflict, they can Read More
When you’re in a highly regulated industry like banking, you’re no stranger to the sometimes overwhelming compliance requirements at the national, regional and state levels that apply to your customer interactions. “Compliance,” “risk” and “regulation” are often seen as dirty words. But compliance and regulation are concepts that banks need to understand and internalize to be successful Read More
Throughout the past two years, the Consumer Financial Protection Bureau (CFPB) has actively collected customer complaints and stored them in a publicly available database in an effort to provide increased transparency for consumers. At the time the database was made public in July 2012, it consisted of more than 14,000 complaints focused solely on one product, credit Read More
The involvement of bank directors with information security awareness training has been a long-standing cornerstone for building an effective information security program. This year ushers in a considerable amount of new information to provide the board. Examiners will want to see that directors are both educated and playing an active role in your compliance and security initiatives. Read More
The Office of Thrift Supervision (OTS) may be long gone, but the institutions that it once regulated are still around and dealing with some of its legacy issues. OTS supervision formally ended in July 2011, when approximately 670 thrifts were moved over to the Office of the Comptroller of the Currency (OCC) resulting in problems for those Read More
Banks, thrifts and credit unions are always wondering what regulators will focus on during their next safety and soundness exam. Based on our most recent Sageworks Bank & Credit Union Examination Survey, we can say that the answer is: credit quality, particularly in the area of commercial real estate (CRE). While other areas also received attention, three Read More
The list of acronyms is daunting: FFIEC, FRB, FDIC, OCC, NCUA, CFPB, ACSSS, CSBS, NASCUS and SLC. As anyone who works in banking or financial services recognizes, that list is indicative of the fact that banks have more combined state, local and federal governing bodies and agencies than any other industry. While keeping them all straight in Read More
Revenues are growing significantly for consumer transaction account services, just not at financial institutions. Our research of FDIC data shows service charges on deposits fell nearly 20% between 2008 and 2012. PayPal, on the other hand, grew revenues over 20% every year during the same time period. In 2013, they serve two-thirds of all households and generate Read More
