By Jeff Schmid, CRCM, CERP

As far back as I can remember — which seems like centuries ago — the role of the compliance officer previously did not exist in our industry. And yet, today they have come to serve a very vital role in our banks. Recently, however, they are extremely hard to come by.

Keeping up with everchanging rules and regulations has forced some compliance professionals to vacate their roles or change professions altogether. They were once seen as the “gatekeepers” when it came to consumer compliance and were responsible for everything from new product development to employee/director training. Today, compliance fatigue has taken its toll, especially with regulations requiring (and regulators enforcing) customer reimbursement even

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Jeff Schmid

in instances where the bank has done its best to comply with all aspects of the rules.

It was the introduction of Regulation Z that changed the tides for me. It was the first rule I was introduced to that made it so customers could be reimbursed because a complex and confusing formula on a disclosure document suggested they would pay more than they were originally told. Don’t get me wrong, I’m all about proper disclosure, but a monetary reimbursement to customers in instances like this seems excessive. Bankers try their best to input accurate data into their software systems to ensure proper disclosures are printed; however, at times mistakes occur. Perfection is impossible for anyone, yet certain regulations require perfection on the part of compliance officers which may compound their stress.

And then came Regulation E.Banks are often held accountable for reimbursement to customers of monies lost due to fraudulent transactions when, in some instances, the fraud may have occurred more easily due to a mistake made by a customer. Bank losses due to cyber-fraud are on the rise and in some cases, banks are making customers whole even when the customer may have fallen victim to a scam and provided their username and account number online.

TRID has been no picnic either. Bankers nationwide were told that certain fees need to appear in certain sections of disclosures, subject to zero tolerance – with expiration of rates and fees – right down to the hour and correct time-zone or consider it to be a violation of the regulation. The remedy: lender credit or reimbursement. And these disclosure changes by regulators were done under the guise of aiding consumers in shopping for the best loan. Getting written up for a seemingly negligible violation such as this where there is no material harm to a consumer is very frustrating for compliance officers.

Finally, last year, the Federal Deposit Insurance Corporation strongly suggested that financial institutions reimburse customers for returned NSF checks that were repeatedly deposited into a consumers account in some cases simply because the bank did not highlight for the consumer the “per presentment” language change that had been previously made (even several years ago) in a bank’s disclosures.

Recently, NACHA updated the Written Statement of Unauthorized Debit to remind consumers of the risk of making false claims of unauthorized ACH debits to their financial institution. This is a step in the right direction to help banks and compliance officers leverage disclosures to hold a customer accountable if their actions contributed to the fraud. I, for one, applaud the effort.

As a compliance professional, I can attest that keeping up with the alphabet soup of regulations can be difficult and frustrating. At a time when good compliance officers are vacating their positions, but regulations are getting more difficult, our ShareFI team is ready to help protect you and your customers. There is value in ShareFI.

Schmid is director – compliance and management services at FIPCO, a WBA Gold Associate Member.

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