THE ROLE OF THE COMPLIANCE TEAM has evolved over the decades to meet the regulatory demands of an industry with new products, advancing technology and consumer demands for ease of access and service. So, it makes sense that today’s compliance team requires more complex knowledge and skills than it did in the past. And, in order to have
an effective compliance team, it is essential to have a comprehensive compliance program, called a
Compliance Management System, or CMS.
A CMS is an integrated system comprised of written documents, functions, processes, controls, and tools that will help your
bank comply with legal requirements and minimize harm to your
customers due to legal violations. The CMS should be woven
into every functional area in your organization, from sales to
advertising to operations and administration.
The bank regulatory agencies establish and communicate the
expectations for an effective CMS. For example, the Consumer
Financial Protection Bureau’s (Bureau) Supervision and Examination Manual states:
“To maintain legal compliance, an institution must develop
and maintain a sound CMS that is integrated into the overall
framework for product design, delivery, and administration
across their entire product and service lifecycle. Ultimately,
compliance should be part of the day-to-day responsibilities of
management and the employees of a supervised entity; issues
should be self-identified; and corrective action should be initi-
ated by the entity. Institutions are also expected to manage
relationships with service providers to ensure that service pro-
viders effectively manage compliance with federal consumer
laws applicable to the product or service being provided.”
Small and large financial institutions alike must continue to
evolve their compliance teams to set the culture of compliance
throughout the organization, resulting in a more effective CMS.
Building such a compliance team requires a blueprint specific to
the organization, yet flexible enough to meet a constantly changing business and regulatory environment.
BY LIZA WARNER, CPA, CFSA, CRMA
ISTOCK/ RADACHYNSKYI 12 | ABA BANK COMPLIANCE | MARCH–APRIL 2018