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Four ways a compliance review prepares you for regulators

June 6, 2017


The financial services industry is firmly entrenched in an era where the regulations blanketing financial institutions are wide-spread and comprehensive. As a result, banks are required to undergo compliance audits and institute monitoring processes to ensure operations are compliant with laws and regulations.

It’s a challenging landscape, because so much can impact your successful compliance, from failure to properly implement new laws and regulations – such as provisions of the Dodd-Frank Act – to inadequate consideration of compliance in advertisements, promotions or in the development of new products and services. If your institution doesn’t have adequate systems in place to ensure regulatory compliance, you’ll find it incredibly difficult to operate effectively in today’s environment.

Due to the constantly changing regulatory environment, it can be difficult to keep up with that change. But you don’t want to be caught unprepared for your next compliance examination. Engaging independent professionals to conduct a compliance review can help your organization be ready. Here’s how.

  • It will help you identify your risks – Prior to a review or an exam, your financial institution will complete a risk assessment. This will provide a foundation, helping to identify the focus areas for the review process. Risk levels are often elevated for new products and services, new regulations and changed regulations. The risk assessment should guide your risk management efforts moving forward.
  • It will cover all the major regulations – A compliance review will encompass all the major regulations that affect financial institutions today. That includes the Bank Secrecy Act (BSA), the Truth in Lending Act (Reg. Z), the Real Estate Settlement Procedures Act (RESPA), the Flood Disaster Protection Act, the Electronic Funds Transfer Act (Reg. E) and Servicemembers Civil Relief Act (SCRA), just to name a few. This comprehensive scrutiny is critical to structuring or refining your bank’s effective compliance management program. A favorable regulatory examination hinges on your execution of a compliance management program that specifies appropriate, adequate procedures and controls.
  • It will shed light on your methods, systems – As your advisors look over your financial institution for regulatory compliance, they will also be looking at the methods and systems you have in place for monitoring compliance. This is similar to what examiners will do. The structure of your company, the oversight you have in place and your management practices all factor into your regulatory exam rating.
  • It will help you self-correct – Because of your compliance review, your financial institution will be alerted to any compliance issues, lack of oversight, or dysfunctional processes. And the appropriate corrective action will be identified, so that you can make changes before your next regulatory exam, favorably impacting your rating. Self-identification of issues and self-correction are key components of an effective compliance management program.

A compliance review conducted by outside professionals can be invaluable to your financial institution’s overall success. Due to today’s complex regulatory environment, it is beneficial to contact professionals who have experience working in this industry. The right advisors will go above and beyond, not just identifying problems within your organization but recommending solutions.

When you engage CSH professionals, you’ll notice that we constantly strive to learn more about your financial institution. This is important because it helps us see the existing compliance measures you have in place and possible areas where problems could develop. We also take a close look at the rules and regulations affecting your organization and your compliance methods. When issues are identified, CSH will work closely with you on solutions to ensure you have an effective compliance management program. And an institution with a sound compliance management program is always prepared for its next regulatory compliance examination.


All content provided in this article is for informational purposes only. Matters discussed in this article are subject to change. For up-to-date information on this subject please contact a Clark Schaefer Hackett professional. Clark Schaefer Hackett will not be held responsible for any claim, loss, damage or inconvenience caused as a result of any information within these pages or any information accessed through this site.


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