Many compliance officers are "totally in the dark" about rules set by the Treasury Department's Office of Foreign Asset Control, a situation that puts their banks' bottom lines at risk, according to Gene Elerding.
Mr. Elerding, a partner with the law firm of Manatt, Phelps, and Phillips in Los Angeles, hopes to shed some light on these guidelines during the American Bankers Association's National Compliance Conference, which runs June 2-5 in New Orleans.
The conference, dubbed "Compliance in a Whole New World," will focus on how technology has changed banks' handling of rules governing foreign assets, money laundering, community reinvestment, and real-estate lending.
The Treasury Department office releases huge lists of people or companies that the government says have ties to so-called "enemy" countries and are thus off-limits to banks. Compared with other topics at the conference, these rules get dangerously little attention from compliance officers, even though minor violations can cost the bank thousands of dollars, Mr. Elerding said.
"This is a sleeping giant, like money laundering was in the '80s," Mr. Elerding said. "OFAC is the Bank Secrecy Act of the 1990s."
Compliance with the office's rules is tricky because of the sheer volume of names, places, and businesses to track. Tracking is easier now, Mr. Elerding said, because banks can search data bases instead of having to flip through stacks of papers for a single restricted name. But it can still be cumbersome. The conference will focus on the way new computer products have changed how banks handle government regulations. ABA director of compliance Cindy Baltierra said about 500 bankers are expected to attend, about the same as last year.
Bankers and consultants said the rapid-fire changes it has brought to compliance make technology an obvious theme for conferences.
"It's quickly becoming clear that banks can do and find lots of things with new technologies," said Lucy H. Griffin, president of Compliance Resources Inc., a Falls Church, Va.-based consulting firm. She is conducting the conference's first session - on avoiding common compliance violations - on Sunday afternoon. "It's a very timely theme for the conference."
Robert P. Chamness, president of CFI Proservices, a Portland, Ore.-based compliance software firm, will deliver the keynote address on Monday, the first full day of the conference. Mr. Chamness will discuss smart cards, Internet banking, and other issues facing compliance officers in the future.
Mr. Elerding will carry on that theme. He said many banks will be slow to embrace stored-value cards and the like, choosing to stay with "safer" products like debit cards. But he said banks shouldn't be nervous about the increase in electronic and telephone banking.
"We've been making wire transfers over the phone for two decades," Mr. Elerding said. "The Internet and telephone banking are just bringing this down to the common person."
Tuesday will be devoted mainly to compliance with the Community Reinvestment Act, with regulators, bankers, and trade group officials talking about ways to manage compliance under the new rules.
The conference closes Wednesday morning with a question-and-answer session featuring representatives from the four banking agencies.
