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.

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.

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.

Federal Regulations

It is Devon Banks 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.

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.

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)

Compliance Examinations

Compliance examinations are primarily done to assess the quality of an FDIC- supervised institution's compliance management systemTo implement federal consumer protection statutes and regulationsTo review compliance with relevant laws and regulationsTo initiate effective supervisory action when elements of an institution's compliance management system are deficient or a significant violation of the law is found

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.

Compliance Investigations

Compliance investigations are conducted primarily to follow-up on particular consumer inquiries or complaints, including fair lending complaints.

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.

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.

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 statusCommit to the highest standard of business and ethical conduct 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 to your jobPromote accuracy and truth in Devon Bank business transactionsMaintain absolute confidentiality regarding clients recordsReport any perceived wrongdoing to your supervisor of the Devon Bank Compliance DepartmentDo not destroy any records except in accordance to Devon Bank policy

Now that you are aware of FDIC compliance guidelines that govern Devon Bank, we will next review responsibilites for the Branch Operations department.

Devon Bank Branch Operations

The Branch Operations goal is to service and provide products to all retail customers. Branch Operation oversee:TellersCustomer Service RepresentativesPersonal BankersBookkeeping/ Accounting

Branch Operation Responsibilities

Operations of individual branches need to be examined, analyzed and evaluated in order to ensure job duties are being performed. Branch operations other responsibilities are managing branches, ensuring adherence to Devon Bank standards and ensuring policies are being upheld.

Next we will review Federal Rules and Regulations for Devon Bank Accounting/Bookkeeping department.

Devon Bank Accounting/Bookkeeping Regulations

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

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.

Patriot Act

The function of the Patriot Act is to deter and punish terrorist acts in the United States and around the world. The act prevents, deters and helps prosecute international money laundering and financing of terrorism.

Anti-money Laundering

Are procedures, regulations or laws created to stop money launderers from making money coming from illegal or unethical sources look legitmate.

Communtiy 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.

Regulation D: Reserve Requirements

Sets reserve requirements thresholds. Defines numerous account types and requirements for those accounts. Defines different types of transaction and time accounts.Sets number of checks and other third-party transfers allowed for savings accounts. List entities eligible for NOW accounts.Gives current ratios for reserve requirements.

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.

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.

Regulation E: Electronic Funds Transfers

Regulates electronic transfers as well as issuance and use of ATM/Debit cards. EFT also, establishes the rights, liabilities and responsibilities of participants in electronic fund transfer systems. Such as automated teller machine transfers, telephone bill-payment services, point-of-sale (POS) terminal transfers in stores and preauthorized transfers from or to a consumers account. Such as direct deposit or social security payments.

Regulation V: Fair Credit Reporting Act

Promotes accuracy, fairness and privacy of personal information assembled by Credit Reporting Agencies.

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.

Regulation CC: Funds Availability

Specifies when banks must make customers deposited funds available for withdrawal. Requires disclosure of interest payment and liability schedules and establishes rules designed to speed the collection and return of check.

Federal Deposit Insurance Act

Regulates bank safety and security standards relating to information and internal audit systems, internal controls, credit, underwriting, interest rate exposure, loan documentation, asset growth and compensation fees and benefits for insiders.

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.

Regulation P: Privacy of
Consumer Financial Information

Requires financial institutions to provide notice to customers about its privacy policies and practices. Regulation P describes the conditions under which it may disclose nonpublic personal information about consumers to nonaffiliated third parties. It also provides a method for consumers toopting outof that disclosure.

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.

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.

Right to Financial Privacy

Protects a customer's financial privacy, while still fulfilling the needs of government agencies. Specifies when and under what conditions, a financial institution may release customer financial records to the federal government.

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.

Regulation DD: Truth in Savings

Requires 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.

Office of Foreign Assets Control (OFAC)`

Administers and enforces economic sanction programs primarily against countries and groups of individuals, such as terrorist and narcotics traffickers.

Regulation J: Check Collection

Governs the collection of checks and other cash and non-cash items. Handles returned check by Federal Reserve Bank

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.The regulation also requires creditors to notify applicants of action taken on their applications or report actions taken against the applicants credit history.

Regulation GG: Unlawful Internet Gambling Enforcement Act

Unlawful 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.

Regulation Q: Interest on Deposits

Prohibits interest on demand deposits and provides guidelines and restrictions relating to interest on deposits and advertising. Gives requirements for offering premiums for demands deposit accounts.

You have just completed the review of Federal Rules and Regulations for the Devon Bank Accounting/Bookkeeping Department Next you will complete the following practice activities

Question #1

Regulation DD contains the following:

a)Requirements for information on periodic statementsb)Monthly rate calculationsc)Change in term noticesd)Both A and C

Question #2

Which act encourages commercial banks and savings associations to meet the needs of low income borrowers:

a)Gramm-Leach-Bililey Actb)The Bank Bribery Actc)Community Reinvestment Act

Question #3

The Office of Foreign Asset Control administeres and enforces economic sanctions against banks:

a)Trueb)False

Congratulations you have completed the Devon Bank Accounting/Bookkeeping Department Compliance Training!