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Compliance Questions & Answers

Compliance touches every corner of community banking, from operations to customer interactions. Discover key areas like internal controls, policy development, and training programs that keep your bank aligned and accountable.

Part of the advertising requirements for Regulation Z includes a provision that “if an advertisement for credit states specific credit terms, it shall state only those terms that actually are or will be arranged or offered by the creditor.”

If there was an error, the bank needs to consider how it will respond, consider the following:

  • Being prepared to adhere to the requirements of Regulation Z by honoring the advertisement’s stated rate
  • Being prepared to acknowledge via a replacement/retraction that the advertisement was an error
  • Determining whether a product may be offered that provides reasonable acceptable substitute to those who applied based on the original rate etc.

In addition the bank should consider corrective action to ensure that this is isolated, consulting the regulatory agency for guidance, documenting what happened and the correction process, reporting to the Board.

Reference: Regulation Z 12 CFR 1026.16(a); 1026.24(a)

Section 604 permits a person, including a bank, to obtain a consumer report for a legitimate business need for the information including in connection with a business transaction that is initiated by the consumer; or to review an account to determine whether the consumer continues to meet the terms of the account.

Reference: FCRA, Section 604(a)(3)(F).

For the purpose of part 328, safe deposit boxes and credit products are excluded from the definition of "non-deposit." Therefore, there is no requirement under part 328 for an IDI to include such a disclosure in marketing material for these products.

Reference: FDIC Q&As Part 328 Final Rule Question V.1

A disclosure delivered in an electronic format will not meet the requirement to provide disclosures in writing under a given regulation (e.g., Regulation Z or DD) unless it meets E-SIGN requirements specifically provided by the relevant regulation.

Reference: E-Sign Act Requirements, Fed. Consumer Affairs Update, Sept. 2014.

The Security Officer must report on the effectiveness of the Security Program annually and when updates are made to the program.

Reference: FED 12 CFR 208.61; OCC 12 CFR 21; FDIC 12 CFR 326

The financial institution may issue one notice with information related to multiple accounts of an account holder.

Reference: 31 CFR 212.7(g).

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