July 2015 A Regulatory & Legislative Advisory for Compliance Professionals
Inside . . .
2 TRID Effective on
3 New Monthly
3 CFPB Study Shows
Benefits of Arbitration
2 Tighter Loan Rules
4 ABA Wins All Four
Exemptions from FCC
5 ABA Disparate
5 Trades Question
Basis for Campus
Bank Secrecy Act
6 Stolen ID Tax Fraud
in South Florida
7 Update on Iran
7 OCC: BSA/AML,
2015 COMPLIANCE OFFICER SURVEY RESULTS:
GROWING REG BURDEN LIMITS PRODUCTS, SERVICES
Growing regulatory compliance burdens have led nearly half of banks to reduce their
offerings of financial products and services, according to ABA’s biannual Survey of
Bank Chief Compliance Officers released on July 21. A combined 46.3 percent said
their banks had cut offerings for loan accounts, deposit accounts, both, or for other
services – up slightly from 2011 and 2013 and up substantially from the 21.9 percent
who reported exiting a product line or channel due to regulatory burdens in 2009.
Meanwhile, nearly 46 percent of chief compliance officers said their banks had either
decided not to launch a product, open a new channel, or hold off on entering a new
market or had held off while determining the regulatory effect.
For example, the Ability-to-Repay Rule has led 34 percent of banks to turn down
otherwise creditworthy mortgage borrowers, according to the survey. An additional 20
percent said they were not sure. The rule’s impact was felt most by banks with
between $1 billion and $10 billion in assets, of which 42.5 percent said the rule had
limited credit. About one-third of banks are exclusively making Qualified Mortgage
In addition to managing an institution’s compliance function, many compliance officers
also serve as responsibility officers for functions such as Bank Secrecy Act,
Community Reinvestment Act, and privacy.
Other Survey Findings
The survey covered trends in compliance outsourcing and third-party systems. Nearly
half of banks have outsourced at least one compliance obligation; of these, 76.9
percent outsourced the compliance audit function, 46.3 percent outsourced fair lending
reviews and 22.3 percent outsourced UDAP/UDAAP reviews. Large numbers of
bankers reported using third-party software or systems to handle Bank Secrecy Act,
Home Mortgage Disclosure Act and foreign sanctions requirements.
Over 75 percent of respondents perform an enterprise-wide risk assessment. These
are typically performed at least annually, and are either performed separately or
integrated with product, service, or activity risk assessments. Most risk assessments
continue to be performed using common desktop applications or manually.
A little over half of banks have one to five compliance FTEs. At banks with under $100
million in assets, two-thirds have one FTE or fewer. Just over 55 percent say
compliance budgets have risen since 2013, mostly due to hiring more staff and
handling a growing regulatory burden. Especially at smaller banks, compliance chiefs
are also likely to serve as CRA officers, BSA officers and chief privacy officers.
ABA conducted its 2015 Survey of Bank Chief Compliance Officers from February to