Compliance in the Banking Industry: A Comprehensive Overview

Financial Regulations and Laws

Banks must comply with numerous financial regulations and laws to maintain transparency, fairness, and consumer safeguards within the banking industry. The following are some key regulations and laws that banks should be aware of:

Suspicious Activity Reporting (SAR)

Banks should have policies and procedures in place for identifying, reporting, and retaining SARs.

Documentation

All bank policies, procedures, and processes related to AML compliance programs must be written down, approved by the board of directors, and noted in the board minutes.

Cybersecurity and Financial Record-Keeping Laws and Regulations

The following are some key regulations related to cybersecurity and financial record-keeping:

Gramm-Leach Bliley Act (Reg P): Requires banks to inform customers about their privacy practices and explain their right to opt out if they don’t want their information shared with third parties.
Sarbanes-Oxley Act (SOX): Imposes stringent record-keeping requirements for public companies related to the secure storage and management of certain electronic financial records.
Payment Card Industry Data Security Standard (PCI DSS): Requires banks to limit cardholder information and data access to as few employees as possible, and implement administrative controls that track account activity.
23 NYCRR 500: Applies to banks under the supervision of the New York Department of Financial Services (NYDFS) and requires them to assess their specific risk profile and design a program that addresses its risks in a robust fashion.
EU-General Data Protection Regulation (GDPR): Applies to all enterprises that process data about EU individuals, whether manually or through automated processes, and highlights various security guidelines for both data processors and data controllers.

Additional U.S. Federal Laws and Regulations

The following are some key laws and regulations designed to provide consumer safeguards and ensure transparency and fairness within the banking industry:

Americans with Disabilities Act (ADA)
Bank Service Company Act
Community Reinvestment Act
Consumer Financial Protection Act
Coronavirus Aid, Relief and Economic Security Act (CARES Act)
Credit Card Accountability Responsibility and Disclosure Act
Dodd-Frank Wall Street Reform and Consumer Protection Act
Economic Growth, Regulatory Relief and Consumer Protection Act
Electronic Fund Transfer Act (Reg E)
Equal Credit Opportunity Act (Reg B)
Expedited Funds Availability Act (Reg CC)
Fair and Accurate Credit Transactions Act
Fair Credit Reporting Act (Reg V)
Fair Debt Collection Practices Act
Fair Housing Act
Federal Reserve Act
Flood Disaster Protection Act
Garnishment Rule
Home Mortgage Disclosure Act (Reg C)
Homeowners’ Loan Act
Military Lending Act
NACHA International ACH Transaction Rule
Real Estate Settlement Procedures Act
Right to Financial Privacy Act
Servicemembers Civil Relief Act
Telephone Consumer Protections Act
Truth in Lending Act (Reg Z)
Truth in Savings Act (Reg DD)
Unlawful Internet Gambling Act (Reg GG)

Conclusion

Compliance must be a top priority due to the increasing frequency and sophistication of financial crimes and cybercrimes. A regulatory compliance checklist can serve as a practical tool for navigating compliance priorities and ensuring compliance program adequacy.