Pub. 7 2019 Issue 3

17 The Community Banker W ho is responsible for your bank’s compliance program? Your first an- swer is probably, “The compliance officer” or “Everyone within the range of their individual jobs.” Both answers are correct, as far as they go. However, who bears the ultimate respon- sibility for the success (or its lack) of the compliance program? Your board of direc- tors. The board has the final accountability for the financial institution’s performance in all areas, including compliance. This is why all reports of examination, including for consumer compliance, are addressed to the board of directors. This full and ultimate responsibility cannot be delegated, but must be accepted and fulfilled. The board can, and should, delegate the authority to others to act to help fulfill these responsibilities. For example, in the compliance arena a compliance officer is appointed to manage the institution’s com- pliance program, a Bank Secrecy Act officer to oversee the BSA program, a Community Reinvestment Act officer to coordinate CRA compliance, and so forth. Director Education “Directors also should stay abreast of general industry trends and any statutory and regulatory developments pertinent to their institution.” – Pocket Guide for Direc- tors, FDIC. The various supervisory agencies ex- pect bank and thrift directors to educate themselves in at least the basics of banking, compliance, and so forth. A certain min- imum level of knowledge is essential for board members to be equipped to carry out successfully the significant responsibilities they bear. Where can board members obtain this information they need? Fortunately, there are numerous sources directors can – and institution management could help directors – tap into to learn what is expected of them, the environment (fi- nancial, compliance, etc.) within which their institution must operate. An important resource is your bank’s regulatory agency, and the other banking su- pervisors. Each agency publishes guides for directors full of information about directors’ responsibilities, as well as tools to help direc- tors successfully discharge their important duties. And, you should not limit yourself to the publications of your regulator. Other than differences in the terminology used to refer to their regulated institutions – mem- ber bank, national bank, insured institution, savings association – and in some specific details, the information that each agency publishes can generally be applied to the other types of financial institutions. For example, here is the menu of pub- lications the Office of the Comptroller of the Currency makes available the following publications on its website at www.occ.gov/ pubs1.htm for guiding directors in meeting their responsibilities. • A Pocket Guide to Detecting Red Flags in Board Reports • Detecting Red Flags in Board Reports: A Guide for Directors • Internal Controls – A Guide for Directors • The Director’s Book: Roles for Direc- tors of National Banks and Federal Savings Associations In addition, the OCC offer a series of directors’ workshops at various locations around the country. Information about these programs is also available at the OCC’s website. The FDIC has resources for bank officers and directors available at www.fdic.gov/reg- ulations/resources/director/ that currently is comprised of the FDIC Technical Assistance Video Program. This is a series of educa- tional videos designed to provide useful information to bank directors, officers, and employees on areas of supervisory focus and regulatory changes. The Federal Reserve offers the Bank Direc- tor’s Desktop at www.bankdirectorsdesktop. org/, a series of resources that allow bank directors to quickly develop an understand- ing of their role in performing their bank oversight responsibilities. Other sources of education opportunities for your directors are offered by banking trade associations, including the Community Bankers Association, both in programs tar- geting directors specifically and in programs aimed at more general banking audiences. For example, your directors are always wel- come at our quarterly Community Bankers for Compliance sessions and other programs that can help them keep up to date. If we can help, please feel free to contact us. William J. Showalter, CRCM, CRP is a Senior Consultant with Young & Associates, Inc. (www.younginc.com) , with over 30 years experience in compliance consulting, advising and assisting financial institutions on consumer compliance and compliance management issues. He also develops and con- ducts compliance training programs for individual banks and their trade associations, and has authored or co-authored numerous compliance publications and articles. Bill can be reached at (330) 678-0524 or wshowalter@younginc.com . KEEPING YOUR DIRECTORS INFORMED By William J. Showalter, CRCM, CRP, Senior Consultant; Young & Associates, Inc.