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Flashcards in Compliance Savior Deck (10)
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1
Q

What is the DCA rating scheme?

A
1-5 overall except CRA which is:
 Outstanding
 Satisfactory
 Needs to improve
 Substantial noncompliance
2
Q

Can CRA ratings be disclosed to the public? If so, how long must they be made available?

A

CRA ratings can be disclosed to the public – must be made available w/in 30 business days of receipt.

3
Q

What are the three primary areas reviewed and assessed to arrive at Compliance rating?

A

Compliance rating the components looked at:
• Management
• Violations
• Program

Component ratings are not disclosed to the institution.

4
Q

To whom does HMDA reporting apply?

A
  • Lenders with assets >$37 million in a MSA (changes each year)
  • Nondepository lenders w/TA>$10 million and an office or loan activity in a MSA
5
Q

What information must be reported for HMDA?

A
  • Loan type
  • Amount
  • Location of dwelling
  • Race or national origin
  • Sex
  • Gross annual income
6
Q

Compliance Composite Rating 1

A
  1. An institution in this category is in a strong compliance position. Management is capable of and staff is sufficient for effectuating compliance. An effective compliance program, including an efficient system of internal procedures and controls, has been established. Changes in consumer statutes and regulations are promptly reflected in the institution’s policies, procedures and compliance training. The institution provides adequate training for its employees. If any violations are noted they relate to relatively minor deficiencies in forms or practices that are easily corrected. There is no evidence of discriminatory acts or practices, reimbursable violations, or practices resulting in repeat violations. Violations and deficiencies are promptly corrected by management. As a result, the institution gives no cause for supervisory concern.
7
Q

Compliance Composite Rating 2

A
  1. An institution in this category is in a generally strong compliance position. Management is capable of administering an effective compliance program. Although a system of internal operating procedures and controls has been established to ensure compliance, violations have nonetheless occurred. These violations, however, involve technical aspects of the law or result from oversight on the part of operating personnel. Modification in the bank’s compliance program and/or the establishment of additional review/audit procedures may eliminate many of the violations. Compliance training is satisfactory. There is no evidence of discriminatory acts or practices, reimbursable violations, or practices resulting in repeat violations.
8
Q

Compliance Composite Rating 3

A
  1. Generally, an institution in this category is in a less than satisfactory compliance position. It is a cause for supervisory concern and requires more than normal supervision to remedy deficiencies. Violations may be numerous. In addition, previously identified practices resulting in violations may remain uncorrected. Overcharges, if present, involve a few consumers and are minimal in amount. There is no evidence of discriminatory acts or practices. Although management may have the ability to effectuate compliance, increased efforts are necessary. The numerous violations discovered are an indication that management has not devoted sufficient time and attention to consumer compliance. Operating procedures and controls have not proven effective and require strengthening. This may be accomplished by, among other things, designating a compliance officer and developing and implementing a comprehensive and effective compliance program. By identifying an institution with marginal compliance early, additional supervisory measures may be employed to eliminate violations and prevent further deterioration in the institution’s less-than-satisfactory compliance position.
9
Q

Compliance Composite Rating 4

A
  1. An institution in this category requires close supervisory attention and monitoring to promptly correct the serious compliance problems disclosed. Numerous violations are present. Overcharges, if any, affect a significant number of consumers and involve a substantial amount of money. Often practices resulting in violations and cited at previous examinations remain uncorrected. Discriminatory acts or practices may be in evidence. Clearly, management has not exerted sufficient effort to ensure compliance. Its attitude may indicate a lack of interest in administering an effective compliance program which may have contributed to the seriousness of the institution’s compliance problems. Internal procedures and controls have not proven effective and are seriously deficient. Prompt action on the part of the supervisory agency may enable the institution to correct its deficiencies and improve its compliance position.
10
Q

Compliance Composite Rating 5

A
  1. An institution in this category is in need of the strongest supervisory attention and monitoring. It is substantially in noncompliance with the consumer statutes and regulations. Management has demonstrated its unwillingness or inability to operate within the scope of consumer statutes and regulations. Previous efforts on the part of the regulatory authority to obtain voluntary compliance have been unproductive. Discrimination, substantial overcharges, or practices resulting in serious repeat violations are present.