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In today’s banking environment as soon as one big new regulation is implemented another pops up. Our compliance resources help your community bank stay one step ahead of the regulators.
Regulations and GuidanceANSWER:
Vendor risk management problems often involve one or more of the following issues:
Failure to train new staff or retain knowledgeable staff. Institutions may believe they can avoid hiring, retaining, or training staff because of a vendor’s expertise. Although an institution may be leveraging a third party’s expertise, staff at the institution must be knowledgeable about vendor activities and the compliance requirements for that activity to facilitate monitoring. Specifically, proper staffing or specialized training for existing personnel may be required. Similarly, banks should consider evaluating activity at the vendor’s location to ensure that risks are understood, and that staff has sufficient knowledge of vendor processes and controls.
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To prevent banks from shielding the identity of customers, FinCEN implemented the "Travel Rule." Under the Travel Rule, financial institutions must include a customer's full identifying information on a payment order including:
The rule requires a customer's true name, not pseudonyms. The rule only applies to originating and intermediary banks, not the beneficiary bank. Note: The bank's routing number in the account number field is not sufficient to satisfy the travel rule. Reference: 31 CFR 1010.410(f). |
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The agencies have a risk focused consumer compliance examination approach, based on the potential for compliance errors to have an adverse impact on banking customers. Prudence says that when the bank receives a notice of error from a customer, it should be considered, reviewed and investigated in the same manner a complaint would be based on the potential for potential harm to the consumer. While not every error and/or complaint is related directly to UDAAP, considering errors in this manner helps to ensure that the bank is working UDAAP into its procedures. Consumer harm is broken into several “categories”:
Reference: FDIC Compliance Examination Manual, II Compliance Examination – Evaluating Impact of Consumer Harm, March 2017. |
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If you work for an insured depository regulated by the OCC, FDIC, FRB, CFPB, and NCUA or the Farm Credit Administration you are not required to take the continuing education courses required under the SAFE Act. You still can and may want to take the relevant Professional Education and Continuing Education courses to keep your knowledge of industry and regulatory information up to date in the event that you change employment and work for a state-licensed lender or broker. Reference: NMLS Resource Center FAQ - http://mortgage.nationwidelicensingsystem.org/profreq/Pages/FAQ.aspx#education |
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