Does Your Compliance Management System Pass The Regulator Test?

A compliance management system (CMS) is the method by which a bank manages the entire compliance process. Amongst the prudential bank regulators (OCC, CFPB, FRB and FDIC) there are consistent themes regarding the essential elements needed to ensure adequacy.

A thorough and robust compliance management system includes: 

  • Board of directors and senior management oversight
  • Independent compliance function that is adequately staffed
  • Compliance policy, procedures and a framework to ensure they are regularly reviewed and revised as needed
  • Compliance training that stays current with regulatory changes and/or management expectations
  • Compliance monitoring, assessments and corrective action processes

Other best practices include implementation of regulator guidance, integration of a compliance policy with an ethics function and performance of a quarterly operational risk assessments and results reporting to senior management.