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Managing Merger & Acquisition Compliance The Compliance Officer’s Role in Mergers and Acquisitions
2017 GBA Advanced Compliance School
May 12, 2017
Louvera Walden, CRCM
Assistant Director Southeast Region
Risk, Information Security and Compliance Solutions
Managing Merger & Acquisition Compliance
• What exactly did we purchase?
– Bank
– Branch(s) of bank
– Failed bank
• Where are they located?
– Same state
– Different state
• How big are they?
• What products do they offer?
• When will this acquisition be final?
• When will the conversion take place?
2
Managing Merger and Acquisition Compliance
• Interim Procedures
– Consolidating cash transactions for CTRs
– Cashing “on-us” checks for both banks
• Within 60 days of Acquisition Date
– Notify FEMA of any change in servicer of a loan
– Transfer MLO registrations to acquiring bank
• ASAP
– Review vendor list and contracts
– Review contracts for cancellation procedures
3
Deposit Compliance • FDIC Insurance • Reg. DD • Reg. GG • Reg. CC • Reg. E • Escheatment • Garnishment • RFPA
Managing Mergers and Acquisitions Compliance
5
• FDIC Insurance Coverage
– Determine which depositors of both banks will be impacted.
– Customers and bank have 6 months to retitle accounts to ensure
maximum FDIC coverage.
– Send letter to impacted customers.
– Ensure that all customers opening new accounts with either
bank are informed that they are now insured as one institution.
– Have new customers sign acknowledgement.
• Reg. GG
– Review procedures
– Review certification documents
– Are accounts noted in some way on the system?
• New Accounts
– Determine how new accounts will be handled:
Will the purchased bank begin to sell acquiring bank products and
services with same terms as acquiring bank?
Will the purchased bank continue to sell purchased banks’ products and
services with same terms as acquiring bank?
– Provide Conversion booklets or Change in Terms notices with all new accounts
opened at least 30 days prior to conversion date.
Consider changing new CD terms and conditions to match acquiring
bank’s CD products immediately.
• Disclosures
– Review copy of all deposit compliance disclosures and review for
differences.
– Review procedure manual for deposit account compliance.
Deposit Compliance
Deposit Compliance in Mergers and Acquisitions
• Reg. CC
– Cut off time
– Hold notices
– Who handles
• Reg. E
– What products are offered by purchased bank?
Payroll cards
Gift cards
Overdraft coverage
Internet banking
Mobile banking
– How are error resolutions handled?
– Will combined bank become remittance transfer provider?
6
Deposit Compliance in Mergers and Acquisitions
• Reg. D
– Are accounts closed or changed?
– Are transactions reviewed on a monthly cycle or statement
cycle?
– Review samples of customer notifications
• Escheatment
– Who handles?
– What are dormant account procedures?
– Are fees charged for inactive or dormant accounts?
– Are records properly retained?
• Garnishment
– Are there policy/procedures for garnishment of federal benefits?
– Are records properly retained?
• RFPA
– Review RFPA log
– Are there procedures?
7
Loan Compliance • Products • Flood Insurance • HMDA • ECOA • RESPA • TILA • Reg. O • UDAAP • Safe Act • Military Lending and
SCRA • Consumer Leasing • Dealer Loans • FDCPA • Credit Cards
Loan Compliance in Mergers and Acquisitions
• Products
– What loan products does the purchased bank offer?
Consumer
Commercial
Mortgage
Qualified Mortgages
ARMs
HELOCs
Open-end credit not secured by RE
Dealer loans
Consumer leasing
Credit cards
• Review Disclosures, Policies, and Procedures for
Each Product
9
Loan Compliance in Mergers and Acquisitions
• Flood Insurance
– What vendor is used for SHFD?
– Is a vendor used for follow-up and force-placement?
– Does bank fall under small lender exemption?
– What method is used to determine RCV?
• HMDA
– Is this a HMDA reportable bank?
– What software is used?
• ECOA
– Are loan denials/withdrawals centralized?
– Does purchased bank have 2nd review process in place?
– Review procedures
• RESPA
– Are there affiliated business arrangements?
– Send Transfer of Servicing notices
– Review list of settlement services providers
– Review escrow processes
10
Loan Compliance in Mergers and Acquisitions
• Truth in Lending
– Sample consumer loans to verify APR and finance charge
– Review list of all fees charged on consumer credit
– Review list of any loan rescinded by customer
– Review all initial disclosures
• Military Lending Act and SCRA
– Review list of all military customers of acquired bank
– Review policies and procedures
• Reg. O
– Review list of executive officers and board members
– Review copy of call provisions used
– List of outstanding loans as of acquisition date
• UDAAP
– Determine co-signer liability notification process
– Determine complaint management policy/procedure
– Review compliant log
– Review any outstanding complaints
• Consumer Leasing
– Review lease disclosures for each type of lease
• Dealer Loans
– Review policy/procedures
– Review list of dealers and dealer contracts
• Credit Card
– Does purchased bank offer directly or through a vendor?
– Review policy/procedures/disclosures
– Review vendor contract (if applicable)
• Fair Debt Collection Practices Act
– Does purchased bank collect debt for 3rd parties?
– Is debt collection handled by a third party?
– Review policy/procedures/contracts
11
Other Bank Products
• Non-Deposit Investment Products
– Does the bank have employee that sell NDIPs?
– Is employee a joint employee?
– Are these products offered via a joint marketing agreement with
a 3rd party?
– Review agreement, disclosures, and signage
– What products are sold?
Investments?
Insurance?
• Affiliated Company
– Does bank or bank holding company own any affiliated business
– i.e. investment company, Insurance company, mortgage
company?
– Review policy/procedures/disclosures for each
12
Operational Compliance in Mergers and Acquisitions
• BSA, AML, CIP, OFAC
– Does purchased bank use software to aid with this compliance?
– Review purchased bank’s CIP to determine if match to acquiring
bank
– Train purchased bank staff on acquiring bank’s CIP
– Review list of high risk entities
– Review SARs
– Review exemption list
– Review risk assessment, policy, procedures
• FCRA
– Review procedures for reporting to credit bureaus
– Review procedures for correcting inaccurate reports
– Review ID theft procedures/red flags/address discrepancy
– Update combined bank ID theft risk assessment and red flags
procedures
• Privacy
– Review privacy notice
– If opt out allowed, obtain list of all customers who opted out of
sharing
– Determine if there are any changes in affiliates
– Determine if there are any changes in privacy policy/notice
– Review procedures
– Update Board approved privacy notice
– Send updated notice to customers
• CRA
– Review purchased bank policy/procedures/public file
– Update bank assessment area
– Update bank public file and lobby notices
– Perform combined bank loan portfolio analysis
– Obtain list of all community development loans
14
Operational Compliance in Mergers and Acquisitions
• Marketing/E-Banking
– Review purchased bank’s internet site
– Determine when sites will be merged
– Review social media sites and policy
– Review marketing and e-banking policy and procedures
15
Compliance Management in Mergers and Acquisition
• Review purchased bank’s compliance program
– Policy
– Procedures
– Monitoring
– Risk assessment
– Training
– Examination reports
– Audit reports
– Board reports
• Where are weaknesses?
• What vendors are used?
• Identify training needs
• Update combined bank risk assessment/program
17
©2016 FIS and/or its subsidiaries. All Rights Reserved. FIS confidential and proprietary information.
419 Walden Managing MA Compliance Compliance Merger Acquisition Project Checklist
PRIMARY DEPARTMENT(S) IMPACTED,
AREAS OF RESP TARGET DATE ISSUE PRIORITY ASSIGNED STATUS
COMPLETION
DATE
IDENTIFY KEY DATES
Executive Management (All) Define Acquisition / Merger Date High
Executive Management (All) Define Conversion Date (for all systems) High
Executive Management (All) Define any system collapse dates High
DAY 1 ACQUISITION DAY 1 (Pre Conversion) I
Management (All) DAY 1
Bank Name: Change all existing forms / disclosures to XXX name
(acquired bank systems) High
DAY 1 Address: Determine Address for Forms Medium
DAY 1 Bank Regulator: Change Regulatory Name on any forms High
Marketing, E Banking, Compliance DAY 1 Website: Welcome Banner Message Medium
Marketing, Compliance DAY 1 Welcome Letter: Introduction Only Low
Management (All) DAY 2
Obtain list of all vendors and obtain copy of all contracts. Send letters
to vendors indicating when contracts will be cancelled. medium
Interim Procedures (before conversion)
Operations, BSA Officer, Compliance DAY 1 Consolidating Cash Transactions for CTRs High
Operations, Compliance DAY 1 Cashing "ON-US" Checks for both banks High
Deposit Insurance
Marketing Pre Conversion Welcome letter indicating combined deposit base Low
Branch Administration, Compliance
Pre Conversion
FDIC acknowledgment to be signed for new deposit accounts to
acknowledge that existing and acquired entities are insured as one
institution
medium
Pre Conversion
FDIC insurance notice to be signed when deposit accounts at are
opened- both signatures required on a joint account
medium
Marketing, Compliance Pre-Conversion
Obtain Compliance Approval on all Customer Correspondence,
Disclosures, Fees, Signage prior to implementation High
Marketing, Compliance
Determine which depositors of both banks will be impacted by FDIC
insurance limit. Send letter informing of 6 month grace period. high
DEPOSITS
Deposit Operations Pre Conversion What software will be used as of merger for deposit documentation Medium
Deposit Operations Pre Conversion Product Mapping / Conversion. Determine Product Changes High
Deposit Operations, Compliance
Pre Conversion
Obtain copies of all Deposit disclosures and customer
communications - i.e. excessive withdrawal letters, reg. e error
resolution letters, etc. high
Deposit Operations, Compliance
Pre Conversion
Prepare Change of Terms notices to be provided to all new accounts
opened 30 days or less prior to conversion date. OR Medium
Pre Conversion
Reprogram purchased bank systems to offer acquiring bank products
and to conform with acquiring bank policies prior to conversion date.
Medium
Disclosures (DD)
Deposit Operations Pre Conversion Fee Schedules (2) High
Deposit Operations Pre Conversion Changes to disclosures - internet, tele banking, etc. Medium
Deposit Operations
Pre Conversion
Certificate of Deposit - maturity notices, will they be changing or
remaining the same
Medium
Deposit Operations
Pre Conversion
Product types, how is interest paid (collected balance, average
collected)? How are fees accessed? Medium
Deposit Operations Pre Conversion CD types and notification requirements? Medium
Deposit Operations, Compliance Pre Conversion Review / Compare Disclosures Medium
Page 1
419 Walden Managing MA Compliance Compliance Merger Acquisition Project Checklist
PRIMARY DEPARTMENT(S) IMPACTED,
AREAS OF RESP TARGET DATE ISSUE PRIORITY ASSIGNED STATUS
COMPLETION
DATE
Deposit Operations, Management Pre Conversion
If purchasing failed bank, will CD interest rates remain the same? If
not, send notice to customers informing of change and providing
opportunity to withdraw funds without penalty prior to conversion. High
Reg. GG - Prohibition on Funding of Unlawful Internet Gambling
Deposit Operations, Compliance Pre Conversion Obtain Policy and Procedures
Deposit Operations, Compliance Pre Conversion Review Certification documents
Regulation CC - Funds Availability
Deposit Operations Pre Conversion Determine Funds Availability Cut Off Times High
Deposit Operations Pre Conversion Recommend statement message on cutoff times Medium
Branch Administration Pre Conversion Amend lobby signs as necessary Medium
Deposit Operations Pre Conversion
Do they have procedures in place to put extended holds? If so, who
performs? Medium
Deposit Operations
Pre Conversion
Determine if purchased bank customers receive paid checks with
periodic account statements. If acquiring bank also sends paid
checks with statements, send substitute check disclosure. medium
Regulation E- Electronic Funds Transfer
Deposit Operations
Pre Conversion
REG E- any changes to telephone banking, internet, etc - product or
access
Low
Deposit Operations
Pre Conversion
Notification requirements/disclosures (initial disclosures, account &
merchant agreements) Medium
Deposit Operations, Compliance
Pre Conversion
Determine Error Resolution procedures & process (form letters used &
resolution log) Medium
Deposit Operations, Compliance
Pre Conversion
Determine if OD product is offered, if yes, determine opt in procedure,
review disclosures Medium
Deposit Operations, Compliance
Pre Conversion
Determine if payroll account cards are offered, if yes, determine
proceudres, review disclosures Medium
Deposit Operations, Compliance
Pre Conversion
Determine if gift cards, prepaid accounts are offered, if yes determine
procedures, review disclosures Medium
Deposit Operations, Compliance
Pre Conversion
Determine if combined bank will meet definition of remittance transfer
provider. If yes, implement disclosures and procedures. Medium
Reg D - Excess MMA/Savings Transactions
Deposit Operations Pre-Conversion Both banks on monthly or statement cycle? Medium
Deposit Operations Pre-Conversion Amend Reg DD disclosure if necessary Medium
Deposit Operations Pre-Conversion Send notice to affected accounts 30 days prior Medium
Deposit Operations Pre-Conversion
What types of reports are used for tracking third party checks, POS
and preauthorized transactions? Medium
Deposit Operations Pre-Conversion
What are the customer notification procedures when over limit - obtain
samples of customer notification? Medium
Deposit Operations Pre-Conversion
Does the bank have procedures in place to close or change account
type - when required? Low
Escheat
Deposit Operations Pre-Conversion Obtain procedure/process Medium
Deposit Operations Pre-Conversion Record Retention Medium
Garnishment
Deposit Operations Pre-Conversion Obtain procedure/process Medium
Pre-Conversion Record Retention Medium
Page 2
419 Walden Managing MA Compliance Compliance Merger Acquisition Project Checklist
PRIMARY DEPARTMENT(S) IMPACTED,
AREAS OF RESP TARGET DATE ISSUE PRIORITY ASSIGNED STATUS
COMPLETION
DATE
Right to Financial Privacy Act
Deposit Operations Pre-Conversion Obtain Procedure/Process low
Deposit Operations Pre-Conversion Review sample of requests/request log low
Deposit Operations, Compliance Pre-Conversion
Obtain Compliance Approval on all Customer Correspondence,
Disclosures, Fees, Signage prior to implementation Medium
LOANS
Loan Operations
Pre-Conversion
What software will be used as of merger for loan origination, loan
documentation Medium
Loan Operations Pre-Conversion Product Mapping / Conversion. Determine Product Changes High
Loan Operations
Pre-Conversion
Identify any products sold in conjuction with consumer loans, i.e. credit
life Medium
Flood Insurance
Loan Operations Pre-Conversion Duplication of vendors for determination? Low
Loan Operations Pre-Conversion Update vendor info for CD Medium
Compliance Pre-Conversion Perform a flood review of acquired entites High
Loan Operations Pre-Conversion Method used to determine the flood zone, vendor process Medium
Loan Operations Pre-Conversion Life of loan tracking process Medium
Loan Operations Pre-Conversion Force placement procedures/process Medium
Loan Operations, Compliance
Pre-Conversion
Determine if combined bank falls under small lender exemption for
escrowing flood insurance. Medium
Loan Operations
Pre-Conversion
Notify Administrator of FEMA (or all flood insurance agents used by
customers) of any change in the servicer of a loan within 60 days after
the effective date of the change. Medium
HMDA
Compliance, Loan Operations Pre-Conversion Determine HMDA Reporting System (2 systems) High
Compliance, Loan Operations Pre-Conversion Back up prior and current year HMDA data HighPre-Conversion Print current HMDA LAR prior to integration and merger Medium
Pre-Conversion
HMDA - Determine separate or combined LAR; Determine if
considered a "purchase", Change acquiring entity Respondent ID Medium
Compliance, Loan Operations Pre-Conversion
Obtain Principal Balance at Acqusition, List of Loans Acquired (Failed
Banks) for HMDA LAR Purchase Coding High
Compliance Calendar Year Perform a data validation of acquiring entity HMDA-LAR Medium
Compliance Pre-Conversion Perform a data scrub of all "Purchased Loans" Medium
Compliance Pre-Conversion Identify HMDA Staffing for Data Scrubs, Data Validations Medium
CRA Officer, Branch Administration Pre-Conversion Update HMDA lobby notices Low
Loan Operations, Compliance Pre-Conversion
Does the Bank have a home improvement product (classified on call
report)? Low
Loan Operations, Compliance Pre-Conversion
Does the Bank have written procedures to explain the HMDA reporting
process? Low
Loan Operations, Compliance Pre-Conversion Retention of records and loan files Medium
Loan Operations, Compliance Pre-Conversion Does the Bank report Home Equity Lines of Credit? Low
Reg O / Insider Lending
REG O Officer Pre-Conversion Reg O Insider Lending (additions, reporting) high
REG O Officer Pre-Conversion Affiliate officers now meet definition of EO per Reg O? high
REG O Officer Pre-Conversion Ownership of reporting requirements high
REG O Officer Pre-Conversion Obtain updated list of Exec Officers and Board members high
Page 3
419 Walden Managing MA Compliance Compliance Merger Acquisition Project Checklist
PRIMARY DEPARTMENT(S) IMPACTED,
AREAS OF RESP TARGET DATE ISSUE PRIORITY ASSIGNED STATUS
COMPLETION
DATE
REG O Officer Day 1 - 30 Obtain copy of policies for: Reg. O., Employee loans and Overdrafts high
REG O Officer Pre-Conversion List of insiders and correspondents high
REG O Officer Pre-Conversion Copy of their call provision Low
REG O Officer Pre-Conversion Statement of Interest Review Low
REG O Officer Pre-Conversion List of outstandings as of acquisition date Low
REG O Officer
Pre-Conversion
FFIEC survey form (or other form used to ascertain executive officer
indebtedness to correspondents) Medium
Loan Documentation
Loan Operations/Administration Pre-Conversion Update affiliated business arrangements disclosure Low
Loan Operations/Administration Pre-Conversion HELOC 15 year examples updated Low
ECOALoan Operations/Administration Pre-Conversion Centrallize loan denials / withdrawals for record retention purposes LowLoan Operations/Administration Pre-Conversion Determine whether a 2nd review process is in place High
Loan Operations/Administration Pre-Conversion
Loan products, description and underwriting guidelines, does the bank
use credit scoring? Medium
Loan Operations/Administration Pre-Conversion Procedures to comply with the regulation Low
Loan Operations/Administration Pre-Conversion Copy of adverse action notices, applications, etc Medium
Loan Operations/Administration Pre-Conversion Notice of right to copy of appraisal Medium
Loan Operations/Administration Pre-Conversion Retention requirements Medium
RESPA
Loan Operations/Administration Pre-Conversion Distribution of Affiliated Business Arrangement form to BB offices mediumLoan Operations/Administration Pre-Conversion Develop revised Affiliated Business Arrangement Notice LowLoan Operations/Administration Pre-Conversion Procedures, forms & notification, evidence of compliance Low
Loan Operations/Administration Pre-Conversion
Transfer of Servicing – notification requirement that servicing of the
loan will be transferred medium
Loan Operations/Administration Pre-Conversion Initial and annual escrow statements High
Loan Operations/Administration Pre-Conversion List of settlement service providers medium
Loan Operations/Administration Pre-Conversion List of any affiliated business arrangements (legal, title, appraiser) High
TILA
Loans, Compliance
Pre-Conversion
Determine whether any allowable change in terms will occur (fees,
terms, rates)
High
Loan Operations/Administration Pre-Conversion Provide Change in Terms Notice High
Compliance Pre-Conversion
Perform APR/Finance Charge Sampling of Consumer and/or
Mortgage Loans (bank may be subject to restitution) High
Loan Operations/Administration Pre-Conversion
List of all types of consumer credit offered and the terms applicable to
each, including fees. Medium
Compliance Pre-Conversion Identify tools used to calculate the annual percentage rate disclosures Low
Compliance Pre-Conversion
Identify any recent loans where the consumer waived the right to
rescind Low
Loans, Compliance Pre-Conversion
Obtain a copy of initial disclosure statements for open-end loan
products, including home equity lines of credit Medium
Loans, Compliance Pre-Conversion Obtain copy of all loan documents and disclosures Medium
Loans, Compliance Pre-Conversion
Obtain Compliance Approval on all Customer Correspondence,
Disclosures, Fees, Signage prior to implementation High
UDAAP
Loan Operations/Administration Pre-Conversion Cosigner liability notification process Low
Page 4
419 Walden Managing MA Compliance Compliance Merger Acquisition Project Checklist
PRIMARY DEPARTMENT(S) IMPACTED,
AREAS OF RESP TARGET DATE ISSUE PRIORITY ASSIGNED STATUS
COMPLETION
DATE
Compliance Pre-Conversion
Determine Complaint Management process/policy. Review any
outstanding complaints. Medium
Safe Act
Human Resources, Compliance Pre-Conversion Obtain list of all Mortgage Loan Originators High
Human Resources, Compliance Pre-Conversion
Transfer MLO registration to acquiring bank within 60 days of date of
merger. High
Human Resources, Compliance Pre-Conversion Update acquiring bank MLO list. Medium
Military Lending Act and SCRA
Loans, Compliance Pre-Conversion Obtain list of all military customers of acquired bank. Medium
Loans, Compliance Pre-Conversion Obtain policy and procedures for complying with MLA and SCRA Medium
Loans, Compliance Pre-Conversion Review sample of Military Customer's accounts for compliance Medium
Consumer Leasing
Loans Pre-Conversion Consumer lease disclosures for each type of lease – if applicable Low
Dealer Loans
Loans Pre-Conversion Obtain list of dealers and dealer contracts Medium
Loans Pre-Conversion Review contracts Medium
Loans Pre-Conversion Review policies and procedures Medium
Fair Debt Collection Practices Act
Special Assets Pre-Conversion Determine whether debt collection is conducted via third party Medium
Special Assets Day 1 - 30 Obtain Policy, Process & procedures, if applicable Medium
Credit Cards
Loans Pre-Conversion Obtain credit card disclosures and applications Medium
Loans Pre-Conversion Review Policies and Procedures Medium
OVERDRAFT PROTECTION PROGRAMS
Deposit Operations Pre-Conversion
Overdraft Program Mapping / Conversion. Determine Product
Changes Medium
Deposit Operations Pre-Conversion Overdraft Medium
Deposit Operations Pre-Conversion Bounce Protection Medium
NON-DEPOSIT INVESTMENT PRODUCTS
Compliance, Operations Pre-conversion Determine if employee or joint employee of bank sells these products.
Compliance, Operations Pre-conversion Obtain copy of marketing agreement.
Compliance, Operations Pre-conversion Review Disclosures and signage.
Compliance, Operations Pre-conversion Obtain list of all products sold.
AFFILIATED COMPANY
Compliance, Operations Pre-conversion
Is there an affiliated business, i.e investment company, insurance
company, mortgage company?
Compliance, Operations Pre-conversion Review policy/procedures/disclosures for each.
BSA/AML/OFAC
Page 5
419 Walden Managing MA Compliance Compliance Merger Acquisition Project Checklist
PRIMARY DEPARTMENT(S) IMPACTED,
AREAS OF RESP TARGET DATE ISSUE PRIORITY ASSIGNED STATUS
COMPLETION
DATE
BSA OFFICER
Day 1 - 30
Obtain BSA / AML / OFAC / CIP Policies of acquiring Bank -
Compare to existing Bank - Utilize Policy Checklist to identify
gaps high
BSA OFFICER Day 1 - 30 Obtain prior Examination, Audits, and Independent Testing Reports high
BSA OFFICER Pre-Conversion What software will be used as of merger for BSA Documentation medium
BSA OFFICER Pre-Conversion OFAC methods - data scrubs, account opening, etc. low
BSA OFFICER Pre-Conversion Determine OFAC software low
BSA OFFICER Pre-Conversion CIP Standards - match? low
BSA OFFICER Pre-Conversion High Risk Customer list medium
BSA OFFICER Pre-Conversion Exemption List medium
BSA OFFICER Pre-Conversion SAR filing responsibility high
BSA OFFICER Pre-Conversion Account Closing Responsibility medium
BSA OFFICER Pre-Conversion Combined risk assessment high
BSA OFFICER Pre-Conversion CIP standards- high risk entities medium
BSA OFFICER Pre-Conversion Determine documentary verification high
BSA OFFICER
Pre-Conversion
Prepare list of reports currently used by acquriring entity for AML/ BSA
function and compare to existing reports and disbursement of reports
high
BSA OFFICER Pre-Conversion Compare and Determine CIP Matrices medium
FCRA / IDENTITY THEFT / ADDRESS DISCREPANCIES
Loan, Compliance Pre-Conversion Procedures to report to credit reporting agencies Medium
Loan, Compliance Pre-Conversion Procedures to correct inaccurate information Medium
Identity Theft Officer Day 1 - 30
Identity Theft - Update Identity Theft Risk Assessment (Products),
Procedures High
Identity Theft Officer Pre-Conversion Obtain ID Theft Procedures / Address Discrepancy Procedures Medium
Identity Theft Officer
Information Security highPre-Conversion Two separate bank sytems until when Medium
IT Officer Pre-Conversion Information Security/ Privacy High
IT Officer
PRIVACY / CUSTOMER INFO
Privacy Officer Pre-Conversion Determine any changes in affiliates medium
Privacy Officer
Pre-Conversion
Update privacy notice to include all affiliates and have one corp
privacy notice, including a proposed opt out
medium
Privacy Officer Pre-Conversion Update Board-approved privacy policy High
Privacy Officer
Pre-Conversion
What is the procedure? Do they share information? Obtain copy of
privacy notice. High
Privacy Officer Pre-Conversion
Are there procedures in place to comply with the notification
requirements? medium
Privacy Officer Pre-Conversion
Is there an opt out list maintained? If yes, provide copy of list.
How/who maintains the database, and what is the process? High
Privacy Officer Pre-Conversion Determine Annual Mailing Date medium
CRA High
CRA Officer Pre-Conversion Determine CRA Reporting System (2 systems) Low
CRA Officer Pre-Conversion Print current CRA LAR prior to integration and merger Medium
CRA Officer Pre-Conversion Back up prior and current year CRA data High
CRA Officer Pre-Conversion Analyze CRA Assessment Area High
CRA Officer Pre-Conversion Combined public file Medium
CRA Officer, Branch Administration Pre-Conversion Update CRA lobby notices Medium
Page 6
419 Walden Managing MA Compliance Compliance Merger Acquisition Project Checklist
PRIMARY DEPARTMENT(S) IMPACTED,
AREAS OF RESP TARGET DATE ISSUE PRIORITY ASSIGNED STATUS
COMPLETION
DATE
CRA Officer, Management Pre-Conversion Identify Branch Closings, Obtain FDIC Insurance Certificate High
Pre-Conversion Obtain Board Approval of any Revised Assessment Areas High
CRA Officer Pre-Conversion Perform Combined Bank Loan Portfolio Analysis Medium
CRA Officer Pre-Conversion Obtain CRA Performance Evaluation (Regulators Website) High
CRA Officer Day 1 - 30 Get copy of their CRA Policy High
CRA Officer
Pre-Conversion
Is there an appointed CRA Officer/Manager? Community
Development Officer? Medium
CRA Officer
Pre-Conversion
Determine organizational structure of CRA (report to Compliance?;
Lending?) Medium
CRA Officer Pre-Conversion Determine CRA Plans & Goals
CRA Officer Pre-Conversion Their CRA Programs Low
CRA Officer Pre-Conversion Products & Services Low
CRA Officer Pre-Conversion CRA Brochure Low
CRA Officer Pre-Conversion CRA qualified Investment Loans Low
CRA Officer Pre-Conversion CRA-LAR & CDL since last examination Low
CRA Officer Pre-Conversion Any consortium relationship? Low
CRA Officer
Pre-Conversion
Specific affiliations and partnerships; summary of each partnership
agreements; timeframe for each agreement; Low
CRA Officer Pre-Conversion Determine Community Development Loans Low
CRA Officer Pre-Conversion Role and expectation of all personnel; Low
CRA Officer Pre-Conversion Community group affiliations; listing of outreach partners; Low
CRA Officer
Pre-Conversion Determine any past advertising targeted at low & moderate population; Low
CRA Officer Pre-Conversion CRA Committee
CRA Officer Pre-Conversion Purpose of committee Low
CRA Officer Pre-Conversion Review copy of minutes meetings since last examination Low
CRA Officer Pre-Conversion Outreach Programs;
CRA Officer Pre-Conversion Who coordinates participation Low
CRA Officer Pre-Conversion Past seminars and workshops (hosted/participated/attended) Low
CRA Officer
Pre-Conversion Results of this participation; (where held; when; number of attendees) Low
CRA Officer Pre-Conversion Public Files
CRA Officer Pre-Conversion Review copy of public file; Low
CRA Officer Pre-Conversion Any request by public to view public file; Low
CRA Officer Pre-Conversion Location of main and regional files; Low
CRA Officer Pre-Conversion Assessment Areas (maps, listing); Low
CRA Officer Pre-Conversion Branch and Service Directory Low
CRA Officer Pre-Conversion CRA (Internal) Training Module/Program
CRA Officer Pre-Conversion Copy of CRA training material and attendance record Low
CRA Officer Pre-Conversion Determine the extent of Reg. BB training; Low
CRA Officer Pre-Conversion How far along? Low
CRA Officer Pre-Conversion What is needed? Low
CRA Officer Pre-Conversion What training tools and methods are being used (Worknowledge?) Low
MARKETING / E BANKING
Marketing Pre-Conversion Will there be two internet sites as of merger date Medium
Marketing Pre-Conversion Identify any Social Media Sites to change Medium
E-Banking Pre-Conversion Determine internet site collapse date / e-banking impact Medium
Compliance Program Evaluation
Compliance Officer Day 1 - 30
Obtain Policies of acquiring Bank - Compare to existing Bank -
Utilize Policy Checklist to identify gaps High
Page 7
419 Walden Managing MA Compliance Compliance Merger Acquisition Project Checklist
PRIMARY DEPARTMENT(S) IMPACTED,
AREAS OF RESP TARGET DATE ISSUE PRIORITY ASSIGNED STATUS
COMPLETION
DATE
Compliance Officer Day 1 - 30 Loan Policy High
Compliance Officer Day 1 - 30 Compliance Policy High
Compliance Officer Day 1 - 30 Fair Lending Policy High
CRA Officer Day 1 - 30 CRA Policy High
Compliance Officer Day 1 - 30 Branch Closing Policy High
Compliance Officer Day 1 - 30 Reg O Policy High
Compliance Officer Day 1 - 30 Privacy Policy High
Compliance Officer Day 1 - 30 Regulation Specific Policies or Compliance Manuals Medium
Compliance Officer Day 1 - 30
Obtain prior Compliance Examination, Compliance Audits,
Compliance Monitoring/Testing Reports High
Compliance Officer Pre-Conversion Obtain Consumer Complaint Log / Records for the past 2 years Medium
Compliance Officer Pre-Conversion Coordinate Compliance Testing of Acquired Entity High
Compliance Officer Pre-Conversion Determine if disclosures are delivered electronically Medium
Compliance Officer Pre-Conversion Review Esign practices, procedures, agreements Medium
Compliance Officer Pre-Conversion Determine method of compliance training and obtain training records Medium
Compliance Officer post -conversion update combined bank risk assessment high
TRAINING (Merger Related)
Compliance Officer Pre-Conversion What vendor is used for training ( if any)?
Compliance Officer Pre-Conversion Obtain all training records
BSA Officer Pre-Conversion BSA, AML, CIP, SAR medium
Privacy Officer Pre-Conversion Privacy mediumIdentity Theft Officer Pre-Conversion Identity Theft mediumCompliance Officer, Loans Pre-Conversion Loan Compliance (HMDA, CRA, ECOA) mediumCompliance Officer, Deposit Operations Pre-Conversion Deposit Compliance (Reg E, Reg CC, Reg D, Reg DD) mediumInformation Security Officer Pre-Conversion Information Security, Security, Clean Desk Policy mediumCompliance Officer Pre-Conversion Reg O Training - Board and & Senior Management (if changes) mediumSecurity Officer Pre-Conversion Record Retention Policy medium
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