FDIC lists common compliance problems

The most frequently violated compliance requirements involve the Real Estate Settlement Procedures Act (Regulation X), a FDIC list revealed.

The FDIC list outlines the most common compliance violations of consumer and fair lending laws and regulations found in its bank examinations. Nearly half (46 percent) of FDIC-supervised institutions were cited for failing to satisfy the requirement to deliver timely Regulation X mortgage servicing disclosure when a residential mortgage application is taken. Almost as many institutions (43 percent) were cited for failing to deliver timely good faith estimates.

For Reg. CC, requirements for next-day availability of funds and for written notice of any exception hold were most often cited as problems - in 21 percent and 16 percent of examinations, respectively. The only Reg. E requirement listed as commonly violated was the obligation of an institution to investigate allegations in an electronic transfer within 10 days of a consumer's notice that an error is suspected. This violation was cited at 7 percent of institutions examined.

According to the agency, many violations in its list can be avoided, corrected, or minimized "with an effective compliance program established by an institution's board of directors." Such a program, OCC notes, includes:

Written policies and procedures.
Monitoring procedures for periodic proactive review, including lending policies.
Appropriate education/ training.
Nondiscriminatory lending criteria.
Loan application procedures.
Periodic review of standard forms.
A compliance audit program.
Procedures to handle consumer complaints.

ABA's compliance section provides a full range of resources for members establishing or already operating compliance programs.

These resources include a toll-free telephone "support line" (Compliance Connection at (800) 551-2572), publications, periodic and ongoing educational programs, telephone seminars (known as Live Link - one scheduled for Dec. 5 addresses common compliance violations), and a compilation, released on compact disk, of all federal references to compliance.

For more information on any of these, contact the compliance section at aba.compliance.com or ABA's Customer Service Center at (800) 338-0626.

The FDIC's "Compliance Examination Manual" is available by writing the agency's Department 0667, Washington, D.C. 20073, or on the World Wide Web at http://www.fdic.gov/regulations/compliance/manual/index.html.

Copyright © 1997 Bank Operations Bulletin. Originally appeared in Bank Operations Bulletin, December 1997.