A Guide for Small Banks on Drafting Compliance Policy

The American Bankers Association is offering community banks a fill-in- the-blanks guide to creating a compliance policy.

"Writing a Compliance Policy" outlines a generic compliance policy and then critiques one bank's method, in order to steer other banks in the right direction.

"Many good systems fall apart in the implementation," said James G. Resetar, the booklet's author and a senior consultant at Ernst & Young. "They're written well, but they're just missing some ingredients. This bridges the gap between the regulations and the practice. It tells what the rules ask for and gives examples of how to do it well."

The guide, designed for banks with less than $500 million of assets, is part of the trade group's planned eight-book BankTools series. Five booklets have been published. The last three volumes in the series - on risk management, the Community Reinvestment Act, and asset-liability management - are expected out in the next two weeks.

Catherine Nelson Fisk, associate director of the ABA's community bankers council, said banks could adjust the booklet's suggestions to their own needs.

"As a rule, regulators don't like it when a bank basically steals another bank's policies," Ms. Fisk said. "It usually doesn't work." But they encourage imitations of successful compliance programs, she said.