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  Culture of Compliance: FinCEN's View


           August 13, 2014


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I have been promoting the concept of a Culture of Compliance ("Compliance Culture") for some time. Indeed, I have written rather extensively about it and lectured on the subject. As recently as February 2014, I published a full length article entitled "Creating a Culture of Compliance." This article covers most of the need-to-know information to establish a Compliance Culture.


Every company has its own culture, of course; but firms should also recognize the need for maintaining a certain attitude and commitment to compliance. In my own firm's client relationships, we continually reinforce the importance of the Compliance Culture, both through our policy and procedures documents, compliance management system reviews, quality assurance monitoring, examination readiness, due diligence and audit engagements, and also through our overall regulatory compliance support. The need to monitor a client's dedication to a Culture of Compliance is central to our mission.


Do federal and state regulatory agencies want their supervised entities to adopt a Culture of Compliance? Most certainly! Within minutes of a regulator entering a financial institution's premises, the Compliance Culture there presents itself. Even emails sent to regulators may disclose a company's Compliance Culture, as signatures that lack protective disclosure may be indicative of compliance defects. Regulators are used to looking at actions and attitude, by-passing the words and smiling affirmations.


The most recent example of the regulator's view comes to us from the Financial Crimes Enforcement Network (FinCEN). Issued on August 11, 2014, FinCEN published its "Advisory to U.S. Financial Institutions on Promoting a Culture of Compliance" ("Advisory"). The Advisory is remarkable for its insights and recommendations. Although predicated on actualizing BSA/AML requirements, the Advisory may be applied to any regulatory compliance implementation.


In this article, I provide the components of the Culture of Compliance, from FinCEN's perspective, using the Advisory to stimulate a broader application to the wide range of requirements in a compliance management system.


I hope you enjoy the article!


Best wishes,

President & Managing Director

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