The Maharajah of Compliance
so theRe i am, in a niCe modeRn ConfeRenCe Room presenting a training session on the legislative and regulatory structure for U.S. financial services. But this isn’t just any conference room—this is the corporate offices of my new employer, a high tech company based in Bangalore, India. Here they have built a core processing system for banking—and the people sitting around the table are highly intelligent, highly
educated, techno-driven, laser-focused software engineers.
The pained looks on their faces is understandable. One of them politely asks,
“Please Stu, can you kindly explain once
again, and give several examples please, of
the distinctions between FDIC state non-member banks and Federal Reserve state
member banks?” (Oh boy! Here we go.)
I had managed to get them through
the explanation of how our laws get
made by Congress (or used to be that
is—back when the politicians could
actually agree on something). I’d gotten
some perplexed looks, but now I could
tell that I was about to lose them com-
pletely as I tried to explain our
system of multiple federal
banking regulators.
“So Stu … then by
having each of these
federal agencies, the
FRB, OCC, OTS, and
FDIC, they are writing
their own regulations
for their banks, is that
not correct?” One of the
engineers asked while
simultaneously writ-
ing an e-mail on his
Blackberry, texting
on his phone, and
I think maybe
even writing
a few lines
of code.
“Well
no … not
really … that
would be ex-
tremely confus-
ing so the Federal
Reserve basically
takes care of that so
there’s only one version of the regula-
tions … but even though the regulations
are identical, each of the agencies has its
own unique set of citations for them!” I
answer brightly. (Blank, uncomprehend-
ing stares greet my eager gaze … so I
add), “And sometimes they will each is-
sue their own unique interpretations …”
(now the looks are almost pitying). Then
it hits me … from an outsider’s view, this
whole system does seem kind of goofy.
OK, really, really goofy.
regulations, and I shall rule with a firm
but benevolent hand. Yet before I start
humming tunes from “Camelot” it occurs to me that these folks must think
our regulatory system is crazy, which,
hmmm, therefore makes me the King of
Crazy.
Then inspiration strikes, and I start
explaining how analyzing a regulation is
like software programming. The words
“and” or “or” in regulatory statements
are critical, so are “exception” conditions. A compliance officer must be
careful about cross-references to other
sections, much like a system needs
to interface with other modules. The
mood in the room eases, faint smiles appear on many faces, and then I see “the
look”—the “L-word” look … yes, my
loyal subjects, it’s the look of logic. ■
About the Author
STu lEHR, CRCM, is an
Industry Principal (AKA
“Maharajah”) for Finacle,
at Infosys Technologies
Limited. For the 20-plus
years prior to this he developed
and lead compliance programs for
a number of banks and an on-line
payments provider. In addition, he
has served on the ABA Compliance
Executive Committee, the ABA
Regulatory Compliance Conference
Planning Committee, and still serves
on the faculty for the ABA Compliance
Schools. He earned the 2002 ABA
Distinguished Service Award and is
a Certified Regulatory Compliance
Manager through the ABA Institute of
Certified Bankers. Reach him at stu.
lehr@gmail.com.
My kingdom is u.S.
banking regulations,
and I shall rule with
a firm but benevolent
hand ... it occurs to
me that these folks
must think our
regulatory system is
crazy, which, hmmm,
therefore makes me
the King of Crazy.
But the beauty of it, for me at least,
is that they think I am truly brilliant
to understand all of this. In fact one of
my colleagues here has dubbed me the
“Maharajah of Compliance.” As I’m
sure you all know (by quickly Googling
the definition as I did) that this really
is quite a compliment as “Maharajah”
means “great king.” What’s not to like
about that? My kingdom is U.S. banking
