ABA Compliance Committee Report
Michael A. Olson
Community Bank President, U.S. Bank in Pella and New Sharon
Michael A. Olson recently attended a meeting with the American Banker’s Association Compliance Administrative Committee (CAC) in Washington, D.C. The CAC is comprised of 15 compliance professionals from banks across the U.S., with community, regional and national organizations all represented.
As can be expected, a major topic of discussion at the CAC’s most recent meeting April 14-15 was the mortgage situation and how it is impacting compliance. Many banks have reported a shift of resources from the compliance function to the credit function. This makes it especially challenging for compliance officers, as all of the regulatory requirements remain and are in fact increasing, however in many cases there are fewer assets available to ensure compliance. In addition, fair lending risk was discussed as a concern, as the tightening of credit standards will likely cause more denials to be recorded on the HMDA LAR.
John Hall, head of ABA’s public relations, is very interested in hearing from bankers who have received recent requests from the media regarding the mortgage situation. He indicated that bankers with requests from the media related to mortgage/subprime may contact him for assistance at jhall@aba.com or 202.663.5473.
Many in Washington believe there is a need to reform the Bank Secrecy Act to make it a more cooperative effort with law enforcement. Several CAC members expressed concern about the number of Suspicious Activity Report filings, especially making note of repeated SAR filings on customers for the same activity when there is no feedback from law enforcement. ABA staff are working to obtain guidance from Treasury to determine when a bank has done its due diligence and could possibly cease to file on repeated activity. There are no major revisions anticipated in the next BSA exam manual, which will be due out in the spring of 2009, reflecting a change to an 18-month cycle from a 12-month cycle.
The ABA has just released its ID Theft/Red Flags toolbox, which is now available to member banks via the ABA Web site. These materials will be very useful in helping your organization comply with this regulation. The key is to get started now, as compliance is mandatory Nov. 1, which includes board approval of the bank’s program. There is also a possibility that a Q & A may be issued on this subject.
The introduction of ABA’s Internet-based e-Learning compliance training has been a great success. Since last year, over 29,000 students representing 1,100 member banks have taken courses via this learning management system that provides over seventy courses to their employees free of charge. An updated course on BSA has recently been made available. Reports from member banks indicate that examiners are becoming familiar with the course content of this system and the training portion of their exams has gone very well.
One CAC member indicated that her bank was exploring the use of a “cash recycler,” which is essentially a reverse ATM at the customer’s location that processes currency in the same manner as remotely deposited checks. These devices count, store and electronically transfer funds to the customers account, and an armored carrier then transports the cash to the bank. Compliance officers will want to make sure that they are included in discussions about this as well as any other new products their bank may be considering.
The ABA Regulatory Compliance Conference will be held in Chicago this year on June 8-11. Compliance personnel in Iowa should consider taking advantage of the close proximity to attend this conference, which is open to both members and non-members. Details can be found on the ABA Web site.
The ABA’s Center for Regulatory Compliance has many resources available to the compliance professional, many of which are available at www.aba.com/compliance. Members may also register on the Web site to receive regular compliance updates via e-mail.
Michael Olson may be contacted at michael.olson4@usbank.com or by phone at 641.628.2121.
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