1. IntroductionThe banking industry is continuously under the watchful eye ofthe government and the Federal Reserve. The government is incharge of setting restrictions on the banking industrys borrowinglimits and the amount of deposits that banks hold in their vaults.These restrictions have a tremendous impact on bankingprofitability. It is a federal law that banks must stay complaint tobanking restrictions.

2. What is Compliance?Compliance is the act of adhering to a standard or a regulation.Compliance training is mandatory for all banking employees.This training tutorial will provide every employee with a basicknowledge about the compliance rules and regulations thatpertain to their departments. 3. Compliance Training ObjectiveThis training is intended to provide participantswith a step-by-step guide for regulatorymanagement while following existing federal,state and local regulatory laws corresponding tothe Banking branch departments. 4. In this training course you will learn:What is regulatory compliance and it how it effectsDevon Bank. Knowledge of Devon Bank departmentalresponsibilitiesPenalties for noncompliance and institutional risks.How to Devon Bank employees avoid governmentpenalties and fines.Why compliance is important. 5. Federal RegulationsIt is Devon Banks responsibility to complywith all federal rules and regulations inevery aspect of its business.All employees are expected to comply withFederal rules and regulations. 6. FDIC Compliance GuidelinesCompliance examinations are the primarymeans the FDIC uses to determinewhether a financial institutions is meetingits responsibility to comply with therequirements and proscriptions of federalconsumer protection laws and regulations. 7. FDIC ContinuedThe FDIC conducts three annual reviewsto determine whether of not an institutionis compliant to Federal regulations. Thethree supervisory activities are complianceexaminations, visitations andinvestigations. 8. Who Regulates Devon Bank?Office of Comptroller of the Currency(OCC)Federal Reserve Member Banks (FRB)Federal Deposit Insurance Corporation(FDIC)Housing and Urban Development (HUD) 9. Compliance ExaminationsCompliance examinations are primarilydone to assess the quality of an FDIC-supervised institutions compliancemanagement systemTo implement federal consumer protectionstatutes and regulationsTo review compliance with relevant lawsand regulationsTo initiate effective supervisory actionwhen elements of an institutionscompliance management system aredeficient or a significant violation of the 10. Compliance VisitationsCompliance visitations are conducted bythe FDIC to review the compliance postureof newly chartered institutions comingunder FDIC- supervision, or in the intervalbetween compliance examinations toreview an institutions progress oncorrective actions. 11. Compliance InvestigationsCompliance investigations are conductedprimarily to follow-up on particularconsumer inquiries or complaints,including fair lending complaints. 12. Institution AwarenessAll employees of Devon Bank shouldfollow the rules and regulations whenperforming job duties.Devon Bank is responsible for promotingawareness for violation of laws andregulations. 13. Regulatory ComplianceRegulatory compliance is the goal thatfinancial institutions aspire to reach in theefforts to ensure all personnel arecomplaint with relevant laws andregulations.At Devon Bank, all employees arerequired to conduct business in a legaland ethical manner. 14. Things to RememberDo not discriminate against a client or employee because ofrace, gender, religion, national origin, color, age, disability,sexual orientation or preference or veteran statusCommit to the highest standard of business and ethicalconduct in all activities while representing Devon BankRespect the rights of othersAvoid conflicts of interest and self dealingBe award of laws, rules, regulations and policies that apply toyour jobPromote accuracy and truth in Devon Bank businesstransactionsMaintain absolute confidentiality regarding clients recordsReport any perceived wrongdoing to your supervisor of theDevon Bank Compliance DepartmentDo not destroy any records except in accordance to DevonBank policy 15. Now that you are aware of FDIC complianceguidelines that govern Devon Bank, we will next review responsibilites for the BranchOperations department. 16. Devon Bank Branch OperationsThe Branch Operations goal is to serviceand provide products to all retail customers.Branch Operation oversee: TellersCustomer Service RepresentativesPersonal BankersBookkeeping/ Accounting 17. Branch Operation ResponsibilitiesOperations of individual branches need tobe examined, analyzed and evaluated inorder to ensure job duties are beingperformed.Branch operations other responsibilitiesare managing branches, ensuringadherence to Devon Bank standards andensuring policies are being upheld. 18. Now that you are aware of FDIC compliance guidelines that govern Devon Bank, we will next review responsibilites for the Lending Department. 19. Devon Bank Lending DepartmentLending has many function within Devon Bank. It is an important branch which allows Devon Bank to serve its customers by providing expertise in their knowledge of lending.It is vital for every lending assoicate to be knowledgable in lending federal rules and regulations 20. Next we will review Federal Rules andRegulations for the Devon Bank Commerical Lending Department 21. Devon Banks Commerical LendingDepartment RegulationsAmerican Disabilities Act The main aim of this disabilities act is tostop any kind of discrimination inemployment, transportation, publicprograms and services, telecommunicationsservices and public accommodation. 22. Bank Secrecy ActThis act requires financial institutions in the UnitedStates to assist United States governmentagencies to detect and prevent moneylaundering.Financial institutions are required to keep recordsof cash purchases of negotiable instruments andfile reports of cash purchases of thesenegotiable instruments of ten thousand dollarsor more. 23. Patriot ActThe function of the Patriot Act is to deter and punish terrorist acts in the United States and around the world. The Patriot Act prevents, deters and helps prosecute international money laundering and financing of terrorism. 24. Anti-Money LaunderingDesigned to encourage commercial banks and savings associations to meet the needs of borrowers in all segments of their communities, including low-and moderate- income neighborhoods. 25. Community Reinvestment ActDesigned to encourage commercial banks and savings associations to meet the needs of borrowers in all segments of their communities, including low-and moderate- income neighborhoods. 26. DiversityBank employees must understand the challengesthat come with diversity such as the aspect ofcultures having different standars forcommunication and different beliefs.By eliminating sterotypes and embracing diversity,individuals will be able to work through thosedifference in their workforce and maximixe theproductivity of the organization. 27. Elderly AbuseLegislation is being passed across thecounty due to many senior citizen beingthe victims of financial exploitaion. Shoulda bank fail to report suspicions of elderfinancial abuse, they will be held liable. 28. Regulation B:Equal CreditOpportunity Act (ECOA)Prohibits creditor practices that discriminate on thebasis of race, color, religion, national origin, sex,marital status or age (provided the applicant hasthe capacity to contract) to the fact that all or partof the applicants income derives from a publicassistance program.ECOA also applies to the fact that the applicanthas in good faith ecercised any right under theConsumer Credit Protection Act. 29. Bank Bribery ActAmends the federal bank bribery law. Prohibits any employees, officers, directors, agents and attorneys of financial institutions form accepting anything of value for or in connection with any transaction/exchange. 30. Regulation V: Fair Credit Reporting ActPromotes accuracy, fairness and privacy ofpersonal information assembled by CreditReporting Agencies. 31. Fair Lending LawEnsures equal objective and non-baised treatment of existing and prospective customers in all credit-related transactions are made. 32. National Flood Insurance Reform ActInstructs banks not to increase, extend orrenew any designated loan unless thebuilding, mobile home or any personalproperty.Securing the loan is covered by floodinsurance for the term of the loan for theparicular type of property under the act. 33. Regulation O: Insider LoansProhibits abuse of a bank by its owninsiders.Regulation O covers insiders of theinstitutions correspondentsRequires special reporting and approvalprocedures for loans and insiders.Limits lending amounts to insiders.Reports loans at correspondents. 34. Gramm-Leach-Bliley ActRequires financial institutions that offer customers financial services or products like financial or investment advice.Loans or insurance to explain their information sharing practices to their customers as well as to safeguard sensitive data. 35. Regulation C:Home Mortgage Disclosure Act (HMDA)This is intended to provide the public with loan data that can be used to help determine whether financial instituions are serving the housing needs of their communities.This requires certain lenders to collect data from the various types of home buying/ improvement loan application. 36. Information SecurityBank employees must understand the importance of protecting customer and employee information.Complying with the laws and regulations that required due diligence, following proper security policies and procedures, as well as reporting potential problems. 37. Regulation O: Insider LoansProhibits abuse of a bank by its owninsiders.Regulation O covers insiders of theinstitutions correspondentsRequires special reporting and approvalprocedures for loans and insiders.Limits lending amounts to insiders.Reports loans at correspondents. 38. Federal Reserve Act 23A-Relationswith AffiliatesRegulates transactions between a bank and it affiliates. The following transactions are not permitted by banks:Parent companys overdrawn checking account with bank subsidiaryPayment of organization costs by bank subsidiary 39. Federal Reserve Act 23B- Restricitons on Transactions with AffiliatesExpands the range of retrictions on transactions with affiliates.Any transaction by a member bank or its subsidiary with any person shall be deemed to be a transaction with an affiliate of such bank. 40. Regulation W: Transations betweenBanks and their AffiliatesImplements sections 23A and 23B of the Federal Reserve Act, which establish certain restrictions on and requirements for transactions between a member bank and its affiliates.It applies to all fedrally-insured depository instituions and requires that transactions between member banks uphold stipulations. 41. Regulation U:Securities Credit byBanksProvides certain requirements applicable toloans that are made for the pupose ofenabling the borrower to puchase or carrymargin stock.Requires U-1 form if loan collateralized bystocks, bonds etc. over $100,000. 42. Physical SecurityNational Institute for Occupational Safety and Health depicts workplace violence as any physical assault, threatening behavior or verbal abuse occurring in the work setting.Devon Bank employees should be knowledgeable and maintain awareness in regards to possible work place violence. 43. Real Estate LendingReminds institutions that strong risk management practice and appropriate levels of capital are essential elements of a sound commercial real estate. 44. Service Members Civil ReliefActOffers short-term financial and legal relief to military personnel and their dependants, by placing specific requirements on the financial service industy and legal system.It provides a wide range of protections for individuals entering, called to active duty in the military or deployed service members. 45. Sexual HarassmentIt is necessary for all employees to beknowledgeable in what is and what is notacceptable behavior at Devon Bank.In order to minimize the banks sexual harassmentcomplaints, all employee should keep a look outfor inappropriate conduct/language, speak up toprevent it and report incidents with the HR. 46. You have just completed the review ofFederal Rules and Regulation for theDevon Bank Commerical LendingDepartment Next you will complete the practice activities 47. Question #1Which regulation ensures bank employees protect customer and employee information:a) Bank Secrecy Actb) Anti-Money Laundering Actc) Information Securityd) Gramm-Leach-Bliley Act 48. Question #2Bank Secrecy Act requires Devon Bank to keeprecords of funds transferred and transmitted of. a) $1,000 and higher b) $3,000 and higher c) $5,000 and up d) $10,000 and more 49. Question #3The function of the Patriot Act is to deterand punish terrorist acts in the UnitedStates:a) Trueb) False 50. Congratulations you have completed the Devon Bank Commerical Lending Compliance Training!