1. IntroductionThe banking industry is continuously under the watchful eye ofthe government and the Federal Reserve. The government is incharge of setting restrictions on the banking industrys borrowinglimits and the amount of deposits that banks hold in their vaults.These restrictions have a tremendous impact on bankingprofitability. It is a federal law that banks must stay complaint tobanking restrictions.

2. What is Compliance?Compliance is the act of adhering to a standard or a regulation.Compliance training is mandatory for all banking employees.This training tutorial will provide every employee with a basicknowledge about the compliance rules and regulations thatpertain to their departments. 3. Compliance Training ObjectiveThis training is intended to provide participantswith a step-by-step guide for regulatorymanagement while following existing federal,state and local regulatory laws corresponding tothe Banking branch departments. 4. In this training course you will learn:What is regulatory compliance and it how it effectsDevon Bank. Knowledge of Devon Bank departmentalresponsibilitiesPenalties for noncompliance and institutional risks.How to Devon Bank employees avoid governmentpenalties and fines.Why compliance is important. 5. Federal RegulationsIt is Devon Banks responsibility to complywith all federal rules and regulations inevery aspect of its business.All employees are expected to comply withFederal rules and regulations. 6. FDIC Compliance GuidelinesCompliance examinations are the primarymeans the FDIC uses to determinewhether a financial institutions is meetingits responsibility to comply with therequirements and proscriptions of federalconsumer protection laws and regulations. 7. FDIC ContinuedThe FDIC conducts three annual reviewsto determine whether of not an institutionis compliant to Federal regulations. Thethree supervisory activities are complianceexaminations, visitations andinvestigations. 8. Who Regulates Devon Bank?Office of Comptroller of the Currency(OCC)Federal Reserve Member Banks (FRB)Federal Deposit Insurance Corporation(FDIC)Housing and Urban Development (HUD) 9. Compliance ExaminationsCompliance examinations are primarilydone to assess the quality of an FDIC-supervised institutions compliancemanagement systemTo implement federal consumer protectionstatutes and regulationsTo review compliance with relevant lawsand regulationsTo initiate effective supervisory actionwhen elements of an institutionscompliance management system aredeficient or a significant violation of the 10. Compliance VisitationsCompliance visitations are conducted bythe FDIC to review the compliance postureof newly chartered institutions comingunder FDIC- supervision, or in the intervalbetween compliance examinations toreview an institutions progress oncorrective actions. 11. Compliance InvestigationsCompliance investigations are conductedprimarily to follow-up on particularconsumer inquiries or complaints,including fair lending complaints. 12. Institution AwarenessAll employees of Devon Bank shouldfollow the rules and regulations whenperforming job duties.Devon Bank is responsible for promotingawareness for violation of laws andregulations. 13. Regulatory ComplianceRegulatory compliance is the goal thatfinancial institutions aspire to reach in theefforts to ensure all personnel arecomplaint with relevant laws andregulations.At Devon Bank, all employees arerequired to conduct business in a legaland ethical manner. 14. Things to RememberDo not discriminate against a client or employee because ofrace, gender, religion, national origin, color, age, disability,sexual orientation or preference or veteran statusCommit to the highest standard of business and ethicalconduct in all activities while representing Devon BankRespect the rights of othersAvoid conflicts of interest and self dealingBe award of laws, rules, regulations and policies that apply toyour jobPromote accuracy and truth in Devon Bank businesstransactionsMaintain absolute confidentiality regarding clients recordsReport any perceived wrongdoing to your supervisor of theDevon Bank Compliance DepartmentDo not destroy any records except in accordance to DevonBank policy 15. Now that you are aware of FDIC complianceguidelines that govern Devon Bank, we will next review responsibilites for the BranchOperations department. 16. Devon Bank Branch OperationsThe Branch Operations goal is to serviceand provide products to all retail customers.Branch Operation oversee: TellersCustomer Service RepresentativesPersonal BankersBookkeeping/ Accounting 17. Branch Operation ResponsibilitiesOperations of individual branches need tobe examined, analyzed and evaluated inorder to ensure job duties are beingperformed.Branch operations other responsibilitiesare managing branches, ensuringadherence to Devon Bank standards andensuring policies are being upheld. 18. Now that you are aware of FDIC complianceguidelines that govern Devon Bank, we willnext review responsibilites for the ElectronicBanking Department 19. Devon Bank Electronic Banking DepartmentThe goal of the electronic banking (e-banking) department is to provide financialtransactions to Devon Bank employees on asecure webpage. 20. E-BankingE-Banking intertwines with Branchoperations at its subset. It has its owncompliance regulations, which will be statedin the following manual. 21. Next we will review Federal Rules andRegulations for the Devon BankElectronic Banking Department. 22. Federal rules and regulations for theElectronic BankingAmerican Disabilities Act The main aim of this disabilities act is tostop any kind of discrimination inemployment, transportation, publicprograms and services, telecommunicationsservices and public accommodation 23. Bank Secrecy ActThis act requires financial institutions in the UnitedStates to assist United States governmentagencies to detect and prevent moneylaundering.Financial institutions are required to keep recordsof cash purchases of negotiable instruments andfile reports of cash purchases of thesenegotiable instruments of ten thousand dollarsor more. 24. Patriot ActThe function of the Patriot Act is to deter and punish terrorist acts in the United States and around the world.The Patriot Act prevents, deters and helps prosecute international money laundering and financing of terrorism. 25. Anti-Money LaunderingAre procedures, regulations or laws createdto stop money launderers from makingmoney coming from illegal or unethicalsources look legitmate. 26. Community Reinvestment ActDesigned to encourage commercial banks and savings associations to meet the needs of borrowers in all segments of their communities, including low-and moderate- income neighborhoods. 27. DiversityBank employees must understand the challenges that come with diversity such as the aspect of cultures having different standars for communication and different beliefs.By eliminating sterotypes and embracing diversity, individuals will be able to work through those difference in their workforce and maximixe the productivity of the organization. 28. Elderly AbuseLegislation is being passed across thecounty due to many senior citizen beingthe victims of financial exploitaion. Shoulda bank fail to report suspicions of elderfinancial abuse, they will be held liable. 29. Regulation E: Electronic FundsTransfersRegulates electronic transfers as well as issuance and useof ATM/Debit cards. EFT also, establishes the rights,liabilities and responsibilities of participants in electronicfund transfer systems. Such as automated teller machine transfers, telephone bill-payment services, point-of-sale (POS) terminal transfers instores and preauthorized transfers from or to a consumersaccount. Such as direct deposit or social securitypayments. 30. Bank Bribery ActAmends the federal bank bribery law. Prohibits any employees, officers, directors, agents and attorneys of financial institutions form accepting anything of value for or in connection with any transaction/exchange.Business meals, gifts of modest value, etc. are exceptions when it pertains to building customer relations with the individual. 31. Regulation CC: Funds AvailabilitySpecifies when banks must make customers deposited funds available for withdrawal.Requires disclosure of interest payment and liability schedules and establishes rules designed to speed the collection and return of check. 32. Regulation V: Fair Credit Reporting ActPromotes accuracy, fairness and privacy ofpersonal information assembled by CreditReporting Agencies. 33. Federal Deposit Insurance ActRegulates bank safety and security standards relating to information and internal audit systems, internal controls, credit, underwriting, interest rate exposure, loan documentation, asset growth and compensation fees and benefits for insiders. 34. Gramm-Leach-Bliley ActRequires financial institutions that offer customers financial services or products like financial or investment advice. Loans or insurance to explain their information sharing practices to their customers as well as to safeguard sensitive data. 35. Regulation P: Privacy of consumerFinancial InformationRequires financial institutions to provide notice tocustomers about its privacy policies and practices.Regulation P describes the conditions under whichit may disclose nonpublic personal informationabout consumers to nonaffiliated third parties.It also provides a method for consumers tooptingoutof that disclosure. 36. Information SecurityBank employees must understand the importance of protecting customer and employee information.Complying with the laws and regulations that required due diligence, following proper security policies and procedures, as well as reporting potential problems. 37. Physical SecurityNational Institute for Occupational Safety and Healthdepicts workplace violence as any physical assault,threatening behavior or verbal abuse occurring inthe work setting.Devon Bank employees should be knowledgeable andmaintain awareness in regards to possible workplace violence. 38. Right to Financial PrivacyProtects a customers financial privacy,while still fulfilling the needs ofgovernment agencies.Specifies when and under what conditions,a financial institution may releasecustomer financial records to the federalgovernment. 39. Sexual HarassmentIt is necessary for all employees to be knowledgeable in what is and what is not acceptable behavior at Devon Bank.In order to minimize the banks sexual harassment complaints, all employee should keep a look out for inappropriate conduct/language, speak up to prevent it and report incidents with the HR. 40. Regulation DD: Truth in SavingsRequires disclosures for consumer deposit accounts (e.g DDA, Time, Savings, Now.)Contains advertising requirements.Requirements for information on periodic statements.Maturity notice for time accounts.Change in terms notices.Annual percentage yield calculations. 41. Office of Foreign Assets Control(OFAC)Administers and enforces economic sanction programs primarily against countries and groups of individuals, such as terrorist and narcotics traffickers. 42. National Automated ClearingHouse Association (NACHA)Develops and maintains operating rules,standards, prcedures and business practice forAutomate Clearing House Network (NCH).As well as for electronic payments in the areas ofInternet commerce, electornic bill and invoicepresentment payments. 43. Automated Clearing House: (ACH)A nationwide funds transfer system, linkedby a computer network to processelectronic payment transactions such asdebit or credit entries between financialinsitutions. 44. You have just completed the review ofthe Federal Rules and Regulations forthe Electronic DepartmentNext you will complete the practiceactivities 45. Question #1Regulation V promotes privacy of personalinformation collected by creditors:a) Trueb) False 46. Question #2Diversity in the workplace:a) Encourages insitutions to eliminate stereotypesb) Maximizes productivity in an organizationc) Embraces employee cultural differencesd) All the above 47. Question #3Which act encourages commercial banks andsavings associations to meet the needs of lowincome borrowers:a)Gramm-Leach-Bililey Actb)The Bank Bribery Actc) Community Reinvestment Act 48. Congratulations you have completed theDevon Bank Electronic Department Compliance Training!