Pub. 9 2014-2015 Issue 6

March/April 2015 25 Extraordinary Service for Extraordinary Members. R EADY OR NOT, 2015 IS ALREADY in full swing. Simply remem- bering the beginning of 2014 and the overwhelming volume of changes caused us all to take a deep breath. Watching enforcement actions being issued every month was as con- cerning as the regulatory changes. One thing is certain, compliance should have moved to the top of the agenda for each and every bank in America. For your bank to be ready for any- thing the regulators push out, youmust ensure that your compliance program is being operated in a proactive manner. The days of reactive compliance are over. “Reactive compliance” occurs, for example, when your peers are dinged for deceptive overdraft practices (or some other issue) and then your focus shifts to the bank’s overdraft program (or whatever issue other banks are being punished for at the time). However, an unpredictable and constantly shifting regulatory environment is now the new normal, and banks must be prepared to prove strict compliance on all fronts at any time. How can this be accomplished? A top-down approach to compliance is required. The board and seniormanage- ment must demonstrate a commitment to compliance and include compliance in every aspect of the business. We have witnessed regulators scrutinizing and cracking down on all banks—the regulators aren’t discriminating—as enforcement actions are being levied against both large and small institutions that aren’t demonstrating sound, con- sistent compliance procedures across all business lines. The regulators also are looking for strong board-level involve- ment and detailed documentation of all things related to compliance. This is evidenced through the continued effort of the regulators to seek out deceptive marketing, debt traps, dead ends, and discrimination. Formalizing your bank’s processes is paramount in addressing regula- tory concerns, and it’s easier than most think. It’s really just about going through all your compliance areas (risk assessment, policies, procedures, moni- toring) and ensuring well-documented, uniform processes are in place across the entire bank. Having these formal- ized processes in place allows your bank not only to avoid enforcement actions, but also to improve its business in gen- eral. The added structure can help you pinpoint and correct inefficiencies as well as reduce continuity risks associ- ated with personnel changes. When structured correctly, compliance proce- dures can ensure everyone in the bank and even each branch are doing things What Will Banking Compliance Look Like in 2015? Darlia Fogarty , Director of Compliance, Compliance Alliance in the same compliant manner. We expect the Consumer Financial Protection Bureau (CFPB) to issue regulations covering overdraft, debt col- lection, payday lending, and arbitration during the first six months of 2015 and to finalize the HMDA rule later in the year. Also, given the continued retailer data breaches, regulatory agencies likely will explore how to strengthen protec- tions in the payment system, whichmay include a focus on mobile banking and emerging technologies. We can’t forget the Truth in Lend- ing Act (TILA)/Real Estate Settlement Procedures Act (RESPA) integrated disclosure implementation and the changes in policies, procedures, and systems this requirement will bring. Despite all of the preparation and the extended time we have had to prepare, platforms are not likely to be ready by the August 2015 deadline. Trying to stay one step ahead of regulatory deadlines and keeping up with new requirements are good rea- sons to keep a proactive compliance department. The Nebraska Bankers Association saw the writing on the wall for compliance and was proactive in helping to form Compliance Alliance to assist banks with all of these compliance endeavors. Compliance Alliance offers a com- prehensive suite of compliance man- agement solutions. To learn how to put them to work for your bank, call (888) 353-3933, visit www.complianceal- liance.com, or email info@complian- cealliance.com .  Darlia Fogarty, director of compliance for Compliance Alliance, brings a wealth of knowledge and practical experience to the team. Fogarty plays an integral part in developing compliance solutions for banks as well as providing assistance to NBA members with complex compliance concerns. Her responsibilities include responding to Compliance Alliance hotline calls, writing and publishing articles in state bankers association magazines, participating and hosting huddles and webinars on a variety of consumer and regulatory issues facing banks, and serving as a trusted speaker and presenter of regulatory and compliance schools and webinars.