Independent Banker - May 2023 - 22

PORTFOLIO
FOCUS COMPLIANCE
What makes a
strong compliance
management program?
Wells Fargo was heavily fined for mismanagement of multiple functions,
demonstrating the importance of having an effective compliance
management system. By Mary Thorson Wright
ompliance is like a jigsaw puzzle.
Dump a boxed puzzle out on the
dining room table and what have you
got? A collection of pieces, each with
their own importance, shape, size and
number of " loops and sockets " needed
to complete the picture.
Compliance is also that way.
Whether the pieces will come together
successfully is up to you.
In December 2022, Wells Fargo
was fined $3.7 billion for general
mismanagement of several covered
functions: loan payment application,
auto and mortgage loan operations,
and deposit accounts. It's certainly not
the first time a bank has been fined for
lapses in regulatory compliance.
While it may appear that a given
bank has a comprehensive compliance
management system in place,
appearances can be deceiving. In
these times, a quick view of banks in
the U.S. would reveal reams (either in
hard copy or digital files) of policies,
procedures, training materials,
checklists, compliance guides and so
forth. Yet, compliance can fail despite
the dollars spent on the resources to
achieve an effective program.
Bank regulatory agencies expect
and require financial institutions
to develop and maintain a sound
compliance management system
(CMS) that is integrated into the
bank's overall framework. It must
be overseen by the bank's board of
directors. The compliance program
must include policies and procedures
in support of compliance, training
and monitoring designed to detect
and correct.
The five Cs of compliance
management
The keys to effective implementation
are the five Cs: coverage, correctness,
completeness, comprehensiveness,
and checks and balances.
¡ Coverage: Every compliance rule
C
22 // ICBA Independent Banker // May 2023
Artwork by Deagreez/Adobe

Independent Banker - May 2023

Table of Contents for the Digital Edition of Independent Banker - May 2023

Content
Independent Banker - May 2023 - Cover1
Independent Banker - May 2023 - Cover2
Independent Banker - May 2023 - Content
Independent Banker - May 2023 - 2
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