The Compliance Division of Steve H. Powell & Company provides a comprehensive, risk based approach to compliance review by specializing in providing community banks real solutions and guidance through ever changing consumer protection and anti-discrimination regulatory requirements. By evaluating compliance with current regulatory standards and providing on-site training, a bank is able to best control its compliance management function. Prompt written reports of our findings, as well as recommendations, will be provided at the conclusion of the review to senior management other applicable personnel in an exit meeting format.
Our contractual obligation does not end when our review(s) are completed. Your bank can contact us at any time for assistance with questions or in office review of documents. We will gladly review your updated disclosures, advertisements and field your questions to ensure your institution is in compliance at all times, not just after the review. Unless the scope of these questions or additional reviews is more than a couple of hours, no additional charge will be incurred by your bank. Further, our company provides a quarterly newsletter The Compliance Pipeline that is devoted to keeping community banks informed on hot compliance topics, annual requirements and regulatory changes.
The number of weeks that we contract for will generally depend on the bank’s asset size and / or seriousness of compliance issues. Our company offers a number of services which are sure to meet your institutions needs. Based on your bank’s immediate needs, the current regulatory environment and consultation with management, we will determine a course of action and recommend specific reviews for your bank. If none of the reviews or services below meets your bank’s specific compliance needs, please let us know and we will work to meet your specific needs.
During each review the bank’s Compliance Management System or Compliance Program will be reviewed for adequacy. This will include a review of a bank’s written policies and procedures, training program, risk assessments, management structure and Compliance Officer’s authority and responsibilities.
Generally, samples of each type of open-end and closed-end consumer credit offered by your institution will be reviewed for compliance with applicable regulations; this will include originated and non-originated applications. If the bank purchases dealer paper or originates consumer loans to applicants who are regularly referred to the bank by dealers, a sample of these loans will be reviewed for compliance with the FTC’s Rule regarding the Preservation of Consumer Claims and Defenses. A small sample of business loans will also be reviewed for their compliance with the Flood Insurance, HMDA, and ECOA regulations.
Training sessions will be provided during each visit to loan officers and support staff responsible for the completion of all loan-related documents. Training will be held at the conclusion of the review and will focus foremost on deficiencies uncovered during the review. Training sessions will include information regarding new lending-related regulations and/or upcoming regulatory changes. Handouts or Power Point presentations will be utilized to provide summary comments relative to the areas covered during training.
A review will be conducted which includes the following regulations as applicable:
A fair lending review will be conducted, if requested, using FFIEC fair lending procedures modified for your bank’s asset size and product lines. This evaluation, encouraged by regulatory agencies, can provide management with one means of identifying potential fair lending concerns, while helping to ensure that all members of the bank’s customer-base receive fair and equal treatment. During the review, a Fair Lending risk assessment will be completed relative to the specific product reviewed. Further, Fair Lending training will be provided to all employees.
At your direction, we can complete a Community Reinvestment Act Review utilizing current joint agency examination procedures for small bank, intermediate small bank or large bank criteria. Depending on the size of your institution, this review may include a review of your assessment areas for reasonableness, data verification, a sampling of loans to assess your bank’s performance with lending test and community development test standards, and a review of your bank’s response to consumer complaints, if applicable. The review will also include an evaluation of your CRA policy, notices, and public files. Based on the findings of the review, we will make recommendations to strengthen or improve your compliance position if deficiencies are noted.
If requested, we will complete a specialized compliance review of the bank’s mortgage department operations as a mortgage broker and correspondent lender as applicable. The compliance review will focus on consumer and other federal regulatory areas, which will primarily include Truth in Lending, Fair Credit Reporting, Real Estate Settlement Procedures, Flood Insurance, Equal Credit Opportunity and Home Mortgage Disclosure. The review will include an interview of applicable personnel to gain an understanding of a bank’s operations and include a risk based sampling of loans / adverse actions documentation issued by the mortgage department for a specified period of time. The sampling will attempt to include all loan types, originators, and investors as the level of compliance may vary. In addition, a review of the bank’s compliance management system as related to the mortgage department will be completed. In addition, an independent review and testing of compliance with the Secure and Fair Enforcement for Mortgage Licensing Act (S.A.F.E. Act) can be completed.
As a part of our general Loan Compliance Review we will typically review a few of a bank’s open end loans as part of our sampling. However, we do offer a separate more in depth full scope review, which encompasses all account opening agreements, applications or solicitations, early disclosures, periodic statements, statement stock, billing error resolution, and advertisements. Our Open-End Lending Review will cover home equity lines of credit, credit cards, overdraft lines of credit and any other consumer related lines of credit your bank might originate. We highly recommend this review for banks that offer credit cards and/or other non-home secured plans due to increased scrutiny and significant regulatory changes in these areas.
The importance of HMDA LAR data cannot be understated in our current regulatory environment. Incorrect data and resubmissions of the HMDA LAR can result in lost productivity of compliance staff, negative press and civil money penalties. Our experienced staff can review hundreds or thousands of HMDA LAR items in relatively short periods of time. Our swift completion of such projects will allow you to quickly identify and correct problems and submit an accurate LAR. However, time slots for annual HMDA LAR data scrubs fill up fast so let us know early if your bank is interested in such a service.
FLOOD INSURANCE FILE SEARCH REVIEW
Non-compliance with flood insurance requirements is another common area where Federal Regulators continue to assess civil money penalties and significant violations in community banks. If examinations reveal patterns or practices of significant flood insurance violations, Federal Regulators can mandate retroactive file searches dating back to the previous examination to determine all significant flood violations for potential penalties. Whether your bank is being proactive to self correct or has been mandated to do a file search, our compliance professionals can complete flood insurance adequacy reviews in an expedited manner that may be the most cost effective path for dealing with potential flood insurance compliance issues.
With more banks maintaining escrow accounts as a result of the Truth in Lending requirements, another area of compliance risk is exposed. Upon request we will perform a full scope escrow program review which will include a review of initial escrow statements, annual escrow statements, HUD settlement statement completion, verification of payments, system parameters and account analysis testing. Further, escrow specific training will be provided to responsible frontline and operations employees. This review would be great for a community bank that has just implemented an escrow program.
Federal regulators have long recommended that all banks develop and implement a formal written compliance program. We will help you develop a program tailored for your financial institution. This will entail development of procedures specific to your bank’s needs and processes. In developing your bank’s Compliance Program, we will include your bank’s training program, management structure, as well as the Board and Compliance Officer’s responsibilities. Policies and procedures for all consumer protection regulations will be provided as part of this service. However, if you only need certain policies or procedures most can be purchased individually from us for a small fee.
Compliance training generally focusing on the errors uncovered will also be completed on site during the review if requested. Not only do we provide in person training tailored to your bank’s specific needs during each review, we also provide opportunities for other methods of training. As recommended by Federal Regulators, we can provide training to your Board of Directors relative to their responsibilities and the risk posed by any area of regulatory compliance or BSA. Additional onsite employee training may be provided upon request on any topic we cover. Further, as a client you have the opportunity to participate in training that we provide via webinars or from our training center in Statesboro, Georgia.
A risk based independent review of your institution’s BSA / AML program as required by Federal law will be performed as part of your contract of services provided by our company. In addition, a review of the bank’s processes and procedures relative to the USA Patriot Act and OFAC regulations will also be conducted. The review will be tailored to your bank’s size, products and business lines, customer base, geographic diversity and use of technology. Supplemental training that includes an overview of regulatory requirements and Safe & Sound banking practices in relation to the areas reviewed will be available to all bank employees. It should be noted that our review meets the scope for an independent BSA/AML review as prescribed by the Federal Financial Institutions Examination Council.
The review will generally be conducted annually and include the following as applicable:
Review of and personnel adherence to policies, procedures, and processes
Review of BSA/AML and OFAC related risk assessments
Risk Based transaction testing for reporting and recordkeeping requirements
Review of OFAC compliance
Information Sharing Requirements specified through the USA PATRIOT Act
Review of Customer Due Diligence and Enhanced Due Diligence
Review of Suspicious Activity reporting program
Regulation GG Compliance review
Review of staff training for adequacy and accuracy
As part of your contract of services with our company a review will be conducted of the your bank’s deposit compliance program (i.e. operating procedures, policies, disclosures, periodic statements, advertising, website, ODP program, record retention, etc.). Training sessions will be provided to tellers, CSRs, bookkeeping personnel, and any other support staff responsible for various deposit compliance functions. Training will be held at the conclusion of each review and the focus will encompass Regulation CC holds, excessive activity in money market and savings accounts, and Truth in Savings.
The review will encompass the following regulations, as applicable:
Expedited Funds Availability
Interest on Deposits
Truth in Savings
Electronic Fund Transfers
Consumer Protection in Sales of Insurance
Privacy of Consumer Financial Information
E-Sign Act
Fair Credit Reporting Act
Identity Theft Compliance requirements (address discrepancy & change)
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CONTACT INFORMATION
If your bank would like more information about services provided by our company or any other information about our company please contact:
Harriett P. Price, CRCM
(912)-687-3297
hprice@shpco.net
W. Brad Washburn, CRCM, CAMS
(912)-682-8628
bwashburn@shpco.net