Virtual Compliance Management

Compliance expectations have evolved and will continue to evolve. Every regulation is a critical regulation; every finding a matter requiring attention. It’s hard to keep up with so many changes and the complexities and nuances of those changes. Your Bank may find itself in the need of assistance with compliance matters for a variety of reasons. Maybe your highly qualified person retired, took another job, or was promoted. Maybe your bank has grown and recognizes that the way you have historically managed compliance just isn’t working like it used to. Perhaps your Compliance Officer needs support to augment their own subject matter expertise or maybe your regulator has “suggested” you work with a compliance expert. Maybe you have a specific short-term need which requires subject matter expertise and experience. TCA crafts VCM solutions to help with the specific priorities of the financial institution.

Whether your Bank’s need is temporary during your manager search or transition process, short-term as you work through “matters requiring attention” or a “cease and desist” order, or you need a long-term solution that saves you money – TCA’s Virtual Compliance Manager (VCM) service is a scalable, outsourced compliance solution which fits your needs. We have provided VCM solutions for scores of Banks for almost a decade and every one of them has been unique.

The VCM solution typically begins with an assessment of the Bank’s Compliance Management System (CMS) and the specific compliance risks for key business lines and products and services and continues through a tailored and mutually agreed upon Plan that addresses the identified priorities consistent with your Bank’s size, complexity, apparent risk profile and perhaps most importantly, appetite for risk.

The case for outsourced compliance management solutions has never been stronger. There is no need to pay the high salary and benefits demanded of the truly competent compliance professional. Short-term or long-term, TCA has the solution. With TCA, you’re not getting a rookie who thinks they might like compliance. You’ll get the experience of years of virtual compliance management AND the advantage of engaging a Certified Regulatory Compliance Manager (CRCM) – the industry’s premier designation that carries the respect and recognition of all of the regulatory agencies. In fact, you are not only contracting with a single VCM – we pride ourselves on the fact that our VCM service taps into the collective subject matter expertise and experience (over 450 years) of our entire Team of 15 professional Consultants.

Project Objectives

  • To evaluate the Bank’s current Compliance Management System to identify current strengths, as well as any weaknesses or deficiencies in the required elements of effective programs. This includes determining the extent and effectiveness of the Bank’s board, management, and staff efforts to maintain comprehensive and reliable Programs.
  • To assist with drafting a board and management oversight plan to ensure proper governance is afforded the Compliance Management System and to satisfy specific regulator directives and expectations. An effective governance plan of the compliance function includes staff reporting, exception documentation, document approval, corrective action oversight, and training participation.
  • To assist in enhancing the Bank’s Compliance Management System to make sure it includes comprehensive policies and procedures, effective training program for the board, management, and staff on the specific processes designed in the policy and procedures.
  • To assist the Bank in implementing changes in the Compliance Management System throughout the Bank, including providing guidance regarding the most effective and efficient use of resources.
  • To maintain objectivity by ensuring there are clear, separate lines of responsibility and reporting for the consultative services provided, so that no potential conflicts of interest arise regarding other review services provided by TCA in the future for the Bank.

First Steps

The first steps of the Project include a formal, documented assessment of the Bank’s compliance risk. This initial phase allows TCA’s Virtual Compliance Manager (VCM) to understand the infrastructure and specific compliance risks for your organization.

Risk Assessments are a high-level evaluation of the CMS. Each component will be assessed by review of documents as well as discussions with business unit/functional area managers. We will include analysis and evaluation of:

  • Board and Management Oversight;
  • Senior Management Supervision and Involvement;
  • Comprehensive, job-specific training;
  • Active, Formal Monitoring;
  • Comprehensive, risk-based Independent Review/Audit;
  • Written review reports to Management and the Board;
  • Review Scope;
  • Tracking and Resolution of issues identified (regardless of the findings source);
  • Escalation of issues that are not properly and timely resolved;
  • Communication of review findings to impacted areas/managers;
  • Sufficient independence and competence of reviews;
  • Development of appropriate and effective compliance policies and procedures;
  • Effective processes to implement new and revised rules (laws, regulations, and agency guidance);
  • Effective processes to implement new and revised products (including products, services, and delivery channels);
  • Effective annual Compliance Management System Risk Assessment;
  • Effective management and oversight of third-party compliance providers (vendors); and
  • Effective and appropriate monitoring and resolution of consumer complaints.

Based on the results of the risk assessment, TCA will work with the Bank to develop appropriately risk-based schedules and scope for compliance training, monitoring and audit and enhance internal compliance controls where appropriate.

Modernizing Compliance Management

The Virtual Compliance Manager (VCM), who is responsible for overseeing a Compliance Program that includes a system of internal operating procedures to ensure compliance and minimize violations, will also rely on an onsite compliance coordinator, who will coordinate the recommendations of the Virtual Compliance Manager.

The VCM will offer ongoing support in the development and implementation of the Bank’s compliance management system. Working with the compliance committee, the VCM’s duties and responsibilities during include:

  • Establishing the agenda for monthly compliance committee meetings and coordinating the meetings of the Committee;
  • Assisting the business unit leaders in overseeing a periodic testing program to effectively assess compliance performance within each department;
  • Assisting in coordinating the training of Bank personnel with respect to compliance issues, laws and regulations;
  • Assist in the development of a proactive process for managing Fair Lending and Community Reinvestment Act lending performance analysis including management and Board reporting
  • Assisting in coordinating the implementation of new rules and new procedures;
  • Assisting the business line leaders in coordinating with Federal regulatory examiners during examinations;
  • Assisting the business line leaders, as needed, with furnishing examiners with requested information;
  • Being onsite, as much as possible, during Federal Compliance examinations;
  • Preparing and presenting periodic reports for the Board of Directors regarding the Bank’s record of compliance;
  • Disseminating information pertinent to compliance matters;
  • Collecting and disseminating to appropriate staff members information related to compliance;
  • Providing informational assistance to management and staff;
  • Reviewing the Bank’s forms and disclosures to ensure that they comply with all applicable laws and regulations;
  • Reviewing management and system reports and making referrals for suspicious activity reports;
  • Assisting the CRA Officer with maintaining the Bank’s CRA public files;
  • Updating policies and procedures and, when necessary, submit recommendations to the Board of Directors for approval;
  • Providing input regarding compliance concerns relevant to products and services offered by the Institution;
  • Examining promotions, advertising or solicitations to ensure that they comply with the rules;
  • Assisting the business line leaders with ensuring that reports to Federal and State regulatory agencies are complete and filed on a timely basis;
  • Ensuring the exceptions disclosed through the compliance Monitoring Reviews are responded to in a timely manner and corrective action is effectively implemented; and
  • Helping the Compliance Committee members maintain a competent level of expertise and knowledge of the requirements of the various laws, regulations, and rulings governing the Bank’s activities.

The goal of TCA’s Virtual Compliance Manager (VCM) program is to help the Bank enhance and implement a comprehensive compliance management system that is consistent with the risk exposure of the Bank. This includes active participation throughout the organization starting with the Board of Directors. The VCM and members of the Compliance Committee shall be given appropriate responsibility and authority for compliance assurance. Additional details regarding the Virtual Compliance Manager Plan are summarized in the following table:

TCA Staff Assignment TCA will assign a professional qualified virtual compliance and BSA manager to be your prime contact and intermediary to TCA and our staff of professional compliance consultants
Initial Step TCA will be an onsite to perform an update of the compliance and AML risk assessments.
Identification of Risks We will review the Bank’s Compliance Management System and AML Risk Assessments to identify and focus on high-risk compliance mandates that count most so your efforts are allocated appropriately. If an Assessment has not been completed by the Bank, we will discuss completion of an Assessment under separate Agreement.
Committee Structure TCA will participate in and coordinate monthly off-site and onsite visits to coincide with the scheduled meetings of the Compliance Committee.
Effectiveness Testing The VCM, in their role as manager, will work with the Bank’s external audit function to ensure the scope of testing of the effectiveness of the CMS and BSA Programs is appropriate.
Contact The Virtual Compliance Manager will be dedicated to your organization and will act as the liaison between the Bank and TCA’s staff of compliance professionals.
Compliance Meetings On a monthly basis, the compliance committee will meet (in person or via conference call) for about one hour to review assignments validate resolution of review and examiner findings and prepare for implementation of new regulatory changes and other issues.
Need to Know Now Some quick reaction compliance issues that are so critical that Bank staff will need to obtain advice and guidance on the spot. Such “Need it Now” issues will be funneled to the VCM or in turn parceled out to TCA’s other professionals via TCA’s 800 Answer line, so a resolution can be obtained to meet the immediate needs. The VCM will be available for support in between scheduled monthly offsite and onsite visits. A total of 4 hours per month is part of the Plan. Hours exceeding the monthly allowance will be billed under separate Agreement.
Monitoring To satisfy the regulator’s mandate for ongoing monitoring, TCA will identify a schedule that places monitoring at the front-line where the transactions are originated. Ongoing efforts will focus on ensuring the monitoring process is working effectively to identify compliance deficiencies prior to them becoming systemic.
Training TCA will coordinate the Bank’s training program assignments working with the compliance committee; in addition, special webinars controlled by the VCM will be designed for the Bank’s staff when we identify weaknesses that require specialized training.
Board Reporting TCA believes that board reporting is critical to the workability of the VCM Program. TCA will communicate with the Board, in person or via teleconference on a quarterly basis or when needed.

Just as there is no doubt that compliance continues to be more demanding, more time-consuming, and more costly, there is no reason banks need to face the onslaught alone. TCA’s Virtual Compliance Manager is intended to help you keep your bank a step ahead. TCA delivers the compliance-risk management support bankers need.

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