Pub. 6 2016-2017 Issue 2

O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S - H E L P I N G C O L O R A D A N S R E A L I Z E D R E A M S September • October 2016 13 ARCH assessment questions regarding the Compliance Management System (CMS)/internal controls track existing guidance set forth in the CMS section of the manual. Accord- ingly, board and senior management oversight; compliance program (policies and procedures, training, andmonitoring); consumer complaint response; and audit are all addressed. Board and management oversight questions are designed to assess the quality of oversight in terms of comprehension of applicable laws, robustness of discussion, knowledge of the bank’s products and services, and effectiveness of monitoring. Compliance program questions are designed to ascertain the adequacy of policies and procedures and their effectiveness in mitigating and managing inherent risk; the adequacy of training in terms of timeliness, depth of content, relevance to roles and responsibilities, and accountability; and the robustness of the bank’s monitoring activities, in terms of comprehensiveness, independence, and depth. Consumer complaint questions integrate oversight and compliance program considerations. As we have recommended in the past, banks should be reviewing external resources, such as complaint board websites, to proactively identify complaints. Questions regarding audit are primarily concernedwith scope, independence, and qualifications of audit personnel, but this area also includes oversight andmonitoring considerations. It is important to note that UDAAP, lending to service members, and third-party risk were specifically addressed throughout section, highlighting their continued importance to regulators. Since the ARCH will be used by examiners to conduct an initial risk assessment prior to each compliance examination, we recommend that banks regulated by the FDIC use the ARCH as an exam preparation tool. Nathan McDonald is an Associate General Counsel for Compliance Alliance. A former federal and state banking regulator, Nathan brings unique knowledge and diverse expe- rience to Compliance Alliance. Prior to attending law school, Nathan obtained his B.B.A. and served as an OCC Examiner in the New York metro area. While at the OCC, he served as a portfoliomanager and the analyst to the resident EIC of amid- size national bank, a rare opportunity for a junior examiner. After obtaining his J.D. fromThe University of Texas at Austin in 2011, Nathan worked at the Texas Department of Savings & Mortgage Lending where he served as an Associate Gen- eral Counsel, developed and implemented the Department’s successful and innovative compliance examination program with the FDIC, and gained valuable experience participating in FDIC compliance examinations.  Compliance Alliance offers a wide variety of compliance support solutions. To learn how to put them to work for your bank, call us at (888) 353-3933 or visit compliancealliance.com.