institution tries to hold to proper standards will begin to resist, since they are expected to meet standards that others are not. Such a “program” is not fair and cannot succeed. Compliance performance elements should be factored into job descriptions, performance evaluations and incentive pay. It needs to be clear that line managers are ultimately responsible and accountable for compliance performance in their areas, and that compliance is an explicit part of everyone’s job. If there are line managers who cannot or will not take responsibility for their own or their area’s compliance performance and, therefore, expose the institution to risk, the institution should send them packing and replace them with managers who are positive about compliance issues and willing to take on this important obligation. Otherwise, the institution has to pay for expensive, redundant processes to check the work of that person(s) or area and fix their errors. Running such a “fix-it” shop is not an efficient way to manage compliance. Establishing and enforcing accountability can produce the lowest-cost compliance — compliance that is embedded in the institution’s normal operations rather than added on, with everyone working to get it right the first time. A useful tool for running an accountability system is an accountability matrix, which can be customized to fit an institution’s particular situation, structure and needs. It can help assure management that someone or an area has been designated as responsible for each compliance rule or issue that impacts its lines of business. The matrix should outline the rules or issues, who is responsible for them, which areas they affect, and so forth. Conclusion As discussed, accountability for compliance performance — good or bad — is essential for an institution’s success in effectively managing its compliance function. Properly structured and enforced, a strong accountability program helps ensure cost-effective, positive compliance results. William J. Showalter, CRCM, CRP, is a senior consultant with Young & Associates Inc. (www.younginc.com), with over 30 years of experience in compliance consulting, advising and assisting financial institutions on consumer compliance and compliance management issues. He also develops and conducts compliance training programs for individual banks and their trade associations, and has authored or co-authored numerous compliance publications and articles. Bill can be reached at (330) 678-0524 or wshowalter@younginc.com. MEMBER FDIC 40years GROWING STRONGER TOGETHER Lending Services Operational Services Audit Services* 800-347-4MIB mibanc.com * Audit Services are offered thru MIB Banc Services, LLC, a subsidiary of our holding company. 14 In Touch
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