cbak.com 14 In Touch office (LPO) misrepresented that certain Veterans Administration (VA) refinance loan terms were available. However, the loans were not available, and the bank’s misrepresentations at the Bloomfield LPO regarding terms for VA refinancing loans were deceptive, in violation of Section 5. How to deal with these issues? As we advised in our previous article, banks and thrifts should be proactive in addressing areas prone to UDAAP issues. You can anticipate potential problems by, in part, tracking enforcement actions as indicators of where regulators are looking for issues (and finding them). The steps we spelled out to help in this proactive approach are: • Establish a specific compliance culture using positive words, actions, and attitudes from the top down. • Enforce compliance performance coupled with the overt support from the top, making it clear to all at the FMSI www.fmsiconsulting.com 913.955.3355 FMSI is a small business founded and located in Kansas, specializing in assisting community banks to succeed, a mission consistent with core CBA values. We have partnered with community banks for nearly 25-years providing core advisory services including asset/ liability, investment, and liquidity management. FMSI advisors actively assess market conditions and bank balance sheets of different size, mix, and capital levels. Market conditions are constantly changing presenting opportunities and challenges for CBA member banks. Interest rates are increasing for the first time in nearly a decade and now is a perfect time to partner with a trusted, industry leader. Establishing an FMSI relationship provides confidence your bank is optimizing the balance sheet, deploying necessary strategies, maximizing profitability, and managing balance sheet risks. FMSI is a Kansas CBA Endorsed Provider Continued from page 13 bank that this is a crucial element in the success of the bank and any related rewards (bonuses, raises, promotions, etc.). • Involve compliance early in product design, marketing planning, and so forth. • Focus on vulnerable customers — including the young, less educated, immigrants, elderly, etc. — within your community, paying particular attention to how your marketing, product recommendations, and disclosures are directed to such populations. It is much easier — and less expensive — to plan and lay the appropriate groundwork to avoid problems than to repair damages after inappropriate and illegal actions blow up. The reactive approach can cause the bank immeasurable reputation harm, which is much more costly than monetary penalties and from which it is much more difficult to recover. William J. Showalter, CRCM, CRP, is a Senior Consultant with Young & Associates, Inc. (younginc.com), with over 35 years of experience in compliance consulting, advising and assisting financial institutions on consumer compliance and compliance management issues. He can be reached at wshowalter@younginc.com. Establish a specific compliance culture using positive words, actions, and attitudes from the top down.
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