Education of the bank's personnel is essential to maintaining a sound compliance program. All personnel should be generally familiar with the consumer protection laws and regulations, and should receive comprehensive education in the banking laws and regulations that directly affect their jobs. They must also be trained in the policies and procedures adopted by the bank to ensure compliance with those laws. The faculty of the training program consists of bank board members, senior management, and invited guest trainers from auditing and training organizations. The training program may use videos and training materials obtained from different sources, such as the American Bankers Association (ABA) and other private corporations like Bankers Online ( The training program is detailed in Chapter 13.

Compliance Audit Function

The other component of a comprehensive compliance management system is a compliance audit function. It enables the board and senior management to monitor the effectiveness of the compliance program. The audit function tests the bank's compliance with consumer protection laws and adherence with policies and procedures. An effective compliance audit function should address all products and services offered by the bank, all aspects of applicable operations, and all departments and branch locations. Our team at the Bank of Whittier has developed a pioneering risk-based audit analysis algorithm that was implemented in the form of a computer program, which we use to identify the suitable frequency of conducting each audit in each area of bank operations, based on the many factors that may impact bank operations such as the economy, oil prices, inflation, political developments, staff experience, changes in staff, changes in management, changes in laws and regulations, and the like.

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