ABA Banking Journal - June 2014 - (Page 24)

PASS THE ASPIRIN THE BANKER-TO-BANKER EXCHANGE The Headache: Has your bank found ways to cut compliance spending? Computing the actual cost of compliance is challenging, but you don't need exactitude to know that the expense keeps going up. Bankers shared solutions. Send yours to Steve Cocheo, executive editor and digital content manager, scocheo@sbpub.com Remedy 1: Cooperation goes a long way Kevin Krieger, vice-president and compliance officer, First Keystone Community Bank, $900.5 million-assets, Berwick, Pa. We coordinate a working group of local compliance officers from community banks within a 50-mile radius. At our informal monthly meetings, issues are discussed and solutions shared. Separate sessions are planned to address the variety of compliance-related risk assessments that are required. Because, in general, we are all following the same rules, competition is checked at the door, and common solutions are developed that can assist everyone in meeting the requirements. Naturally, proprietary and thirdparty information is not shared, but hearing how a colleague has dealt with a common question has been invaluable. The cost savings comes from sharing information, so there is less time spent researching and no one has to reinvent the wheel. Remedy 2: Look to associations Sue Eno, president and CEO, Citizens National Bank, $247.7 millionassets, Cheboygan, Mich. We u s e A B A ' s Frontline Compliance Training- required of everyone from the CEO to the mail clerk (see box, below). We are a member of Compliance Alliance, endorsed by over 30 state banker groups. We also belong to Financial Institutions Compliance Cooperative, a Michigan bankers group that was formed in the 1970s with a law firm that provides compliance updates, forms, sample policies, and more-plus telephone consultation. We also tap government resources, such as the Consumer Financial Protection Bureau's small-entity compliance guides, all of which reduces sending staff to outside conferences and schools. We just finished an exam and results were very positive for compliance. Remedy 3: Keep compliance staff up-to-date Mary Lynn Lenz, president and CEO, Foothills Bank, $283.3 millionassets,Yuma, Ariz. We s p e n d a f a i r amount each year on continued education for our compliance officers. As you know, the hurdles continue to get higher and the changes more frequent. We've also had to have a hard look at how we do business. We have exited the first mortgage, residential lending arena as the compliance challenges were just too great for a $300-million community bank. That said, we will seek to provide mortgages through a third party if possible. Compliance training: just a few clicks away ABA's web-based Frontline Compliance Training offers about 50 courses in numerous regulatory and legal areas. The program, free for ABA members, includes tests and other student tools, and a monitoring system to track employee progress. To learn more about Frontline, visit http://www.aba.com/Training/Training/ Frontline/Pages/default.aspx Remedy 4: Spread the costs Adapted from the article, "Compliance strategy cuts costs," on ababj.com's Community Banking Channel: Banks market all kinds of products and services, but $190 millionassets Spring Bank, Brookfield, Wis., markets something beyond the usual: the expertise of Judy Etta, its compliance officer. As a result, the young bank defrays much of its own costs of adding a dedicated compliance officer, and helps other institutions that don't want to hire a fulltime compliance person. "We don't make enough from the consulting role to completely pay for Judy," says David Schuelke, president and CEO, "but she's very good at what she does. And by sharing her expertise with other banks, we're putting a dent in the impact on the cost of compliance for Spring Bank. We're thrilled with how this has worked out." Read the full article at http:// tinyurl.com/ptacasestudy Headache 2: Containing other rising costs Has your bank outsourced any significant operations, support functions, or lines of business in the last year or so? Remedy 1: Get more outside for same $$$ James Cornelsen, president and CEO, Old Line Bancshares, Inc., $1.2 billion-assets, Bowie, Md. Due to growth, it would have been necessary to add audit staff. We outsourced internal audit to supplement continued and fairly rapid growth. We changed from one staff internal auditor to an internal audit/consulting firm. For a similar cost of having two or three on-staff internal auditors, the bank ASPIRIN continues on page 49 24 | ABA BANKING JOURNAL | JUNE 2014 http://www.tinyurl.com/ptacasestudy http://www.tinyurl.com/ptacasestudy http://www.aba.com/Training/Training/Frontline/Pages/default.aspx http://www.aba.com/Training/Training/Frontline/Pages/default.aspx

Table of Contents for the Digital Edition of ABA Banking Journal - June 2014

Chairman's View
Editor's Column
The Economy
Bank Notes
Picture This
Affordable housing pioneer
Pass the Aspirin
Tech Topics
Lines of defense
Top performing community banks
Compliance Clinic
Compliance Inbox
Around the ABA
Legal Issues
First Person

ABA Banking Journal - June 2014

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