Compliance management means something different to almost every banking organization. Factors such as the size of the organization, management philosophy, complexity of products, and the tenure and knowledge of staff can significantly affect the way that the compliance function is managed. However, the repercussions of ineffective compliance management are basically the same across all organizations. Compliance errors expose institutions to fines, civil money penalties, and payment of damages. Furthermore, compliance problems can lead to a diminished reputation in the community, reduced franchise value, limited business opportunities, reduced expansion potential, and lack of contract enforceability.
This guide is designed to outline some considerations in helping your organization manage compliance. It includes sections on risk assessment, compliance aids, “red flags,” and frequent violations, as well as more traditional topics such as audits and training. All of the suggestions are not necessarily appropriate for all institutions, and the list of suggestions should not be considered exhaustive. Each item should be considered in the context in which your organization operates. Please keep in mind, also, that both regulations and the compliance environment change, and that some of the information contained in this guide may become outdated at some point in time.
The entire article may be viewed by going to the Federal Reserve Bank of Philadelphia (www.philadelphiafed.org) and searching for "Establishing and Maintaining an Effective Compliance Program."