Independent Banker - November 2018 - 25

Next: Should leaders smile?
says. " We also compare the high-profile cases to the bank's
risk management systems, including compliance, to help
identify gaps or potential issues. "
Richard Tripp is the compliance officer at First Volunteer
Bank, a $985 million-asset community bank in Chattanooga,
Tenn. He sees his position as a gatekeeper to stay up
to date with regulations, rules and guidance through regulatory
agency materials, conferences, webinars and other
third-party communications.
At North Valley Bank, a $164 million-asset community
bank located in Thornton, Colo., chief financial officer and
compliance officer Krystal Gaskill knows her bank's examinations
can be greatly affected by examiners' experiences
in the field. She likes the FDIC's quarterly newsletters, in
addition to other industry resources, to keep up on trending
issues.
Coach the team
What the community bank does with this information is
a critical element. Escalating regulatory requirements
demand a team approach to compliance, and the compliance
committee structure is used more widely than ever by
community banks. Banks without a compliance committee
must ensure close coordination among the compliance officer
and all stakeholders.
Tripp leads a compliance committee comprising representatives
from all areas of the bank. " I'm responsible for
communicating information I've gathered to the committee, "
states Tripp. " I help identify the areas and processes
affected and help the stakeholders determine what needs
to be done to meet the changes. If there are multiple areas
affected, we might create a subcommittee or project team
to fulfill the change. "
In Gaskill's work coordinating North Valley Bank's
compliance efforts, she has found an operations committee
with representation from all areas of the bank to be
extremely valuable. " Every month, we devote a portion
of the committee meeting to compliance, " she says. " We
discuss where a requirement fits in and who needs to be
looking at it. The team approach keeps compliance in front
of everyone. "
" The team approach
keeps compliance in front
of everyone. "
-Krystal Gaskill, North Valley Bank
" The audit and examination
culture has shifted. The
regulators are very open
about the extensive use of
the risk-based approach. "
-Tim Grooms, First State Bank
Practice everything
Risk-based examinations are a good checking tool.
Regulators have transitioned almost exclusively to riskbased
examinations and supervision to apply resources
to the industry's products and services that could be the
most injurious, and to more efficiently manage the costs
of supervision.
On the other hand, strict, risk-based bank compliance
leaves something to be desired. A risk assessment can be a
good tool to allocate bank resources proportionately. However,
banks should periodically seek a line of sight to all
compliance requirements, regardless of risk level.
" We look at all the compliance regulations annually and
typically have the full-scope work done by our external
compliance resource, " says Gaskill. " We use a risk assessment,
and we look at higher-risk areas, for instance, TRID
loans, on a more frequent basis internally. "
Tripp's bank also outsources internal audits, and compliance
is included in the internal audit risk assessment and
plan. First Volunteer Bank's compliance department performs
periodic monitoring to help identify problems before
they can become a pattern or practice.
" The audit and examination culture has shifted, " says
Grooms. " The regulators are very open about the extensive
use of the risk-based approach. However, we engage
our third-party internal auditors to take a comprehensive
look periodically. "
Little things are big, as Berra put it. Community banks
should digest the headlines and regulatory requirements
and look for the underlying compliance fundamentals.
Successful compliance results, after all, are the sum of
small efforts, repeated day in and day out.
Mary Thorson Wright, a former Federal Reserve examiner, is
a financial writer in Virginia.
independentbanker.org Q 25
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Independent Banker - November 2018

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