Documentation: Bigger Than Lending

Compliance managers have long worked on lenders to improve documentation in loan files. We need the documentation to establish key pieces of information such as the date the application was actually taken and how the decision was made. Getting lenders to enter complete and consistent documentation has always been a compliance program issue.

With BSA examinations, and the current approach to policy, procedures and corporate management of compliance, the checklist approach to examinations is on the back shelf and the documentation approach is in.

When asked to evaluate what management and the board knew and when they knew it, examiners look for documentation - evidence that compliance program issues were reported and evidence that management and the board responded appropriately. The result is that the entire compliance program, from policies and procedures through training, monitoring, and auditing, must be documented with sufficient detail to satisfy examiners that the appropriate work is being done. So keep up those 3-ring binders!

Copyright © 2005 Compliance Action. Originally appeared in Compliance Action, Vol. 10, No. 12, 10/05