Is a Compliance Committee Overkill?
Do we really need compliance committee? For many institutions, the development of a compliance committee may seem like overkill, especially when the organization itself is small and most everyone does a little bit of everything. Also, organizing a compliance program can be chaotic and difficult at best. So maybe it’s not necessary. We believe that nothing could be further from the truth. In fact, one of the best ways to make sure that your examinations go smoothly is to develop a strong and organized Compliance Committee.
Consider the fact that although it may not be possible to know what an examination team will focus on, there are certain areas that you know will be addressed, because they are the standard that has bene set by the examination manual. In addition, Regulators have established certain expectations for compliance programs, not matter what the focus of the examination. Using a compliance committee can help normalize the components of the program and will make the examination go more smoothly. Finally, a Compliance Committee can also help structure the compliance process.
What’s the Proper Structure for a Compliance Committee
While there is no regulatory requirement for the members of the Compliance Committee, there are certain members of the management team that should be standard. For example, any management team member that has responsibility for:
- Preparing reports required by regulations
- Ongoing monitoring of transactions
- Onboarding of New Clients
- Consideration and filing of SARs
- Administration of training
- Updating of policies and procedures
Essentially, anyone at the company who has responsibility for more than the actual day-to-day running of the company may be considered for membership of the Committee.
The overall structure of the Compliance committee should be documented by an official charter document that establishes the purposes of the Committee, the powers of the committee and frequency of the meetings.
Optimal Compliance Committee Functions
Once the Compliance Committee is established, as a best practice, there should be a standing template of items that are reviewed for further action or approved by the Committee. A comprehensive list of items should include the following:
- Review policies and procedures
- Track audit findings
- Review Metrics (Internal Audits)
- Regulatory Reporting
- Compliance Trends
- Complaints
- Training
- Monitoring Software settings
- Ad-Hoc projects
The goal is to include all of the ongoing components of the compliance program that are always the focus of an examination. By including these items and documenting management’s review of these, the examiners will use the Compliance Committee’s template and minutes as a roadmap for the examination.
***For More Information on aligning your Compliance Department with risk, please visit www.VCM4you.com ***