WASHINGTON -- Those who live and breathe compliance have found some respite in camaraderie.
Regional compliance officer networks are meeting around the country to hash out similar problems, listen to expert speakers, and discuss the changing role of the job.
Some of these groups are statewide, some citywide, and some multistate. But they have all sprouted out of the same need: to support compliance officers.
"These groups typically start out in a community or city and grow when rural banks realize how important compliance is," said Michael Maher, vice president of compliance for First Bank System Inc., Minneapolis, and member of the Minnesota Compliance Network.
Kris Hall, vice president of corporate compliance at Boston Co. administers the three-year-old Boston Corporate Compliance Officer Network, which meets every other month and has seven bank members.
"It's great to have somebody to commiserate with," she said. "The network helps us realize there are other people in the world dealing with these issues."
Big topics for most of these groups now are self-testing, fair lending, and mutual fund regulation. At the meetings, members explain their banks' policy for each issue. Although every institution has a different approach, Ms. Hall said, bankers can get new ideas from their peers.
Members of the Compliance Group of South Jersey literally swap policies, according to J.R. Simon, chairman of the network and compliance officer at Premium Federal Savings, Gibbsboro, N.J.
"The end result is a much better policy for the bank," Mr. Simon said.
His group, composed of 35 banks from Trenton to Cape May, N.J., has been meeting monthly for about 10 years. The gathering starts with an expert speaker like a regulator, examiner, or attorney. After the speaker, there is a dinner and discussion period.
"The biggest thing for us is to get compliance people talking to other compliance people," said Larry Musher, a bank consultant in Baltimore who started the Trust Compliance Managers Roundtable last June. "They have the same kinds of problems, so why should they have to reinvent the wheel every time they do something?"
Relationship to Profits
Mr. Musher said that in his experience, which includes three years as an examiner at the Comptroller of the Currency and 10 years as a banker, he's found the banks with the best compliance programs have the biggest profit margins. And talking with people who might have different compliance ideas is a great way to improve banks' programs, Mr. Musher said.
His group now has 20 bank members. It meets once a quarter in Philadelphia, and is composed mostly of Middle Atlantic area banks such as Mellon Bank, CoreStates Bank, and Nations-Bank of Maryland.
Another reason for meeting, said Mr. Musher, is that compliance officers often find other bank employees don't really understand what they do. As a former banker, he found himself going to compliance officers at other banks for advice rather than to co-workers at his own bank.
Educating the Staff
Gayle Reid, compliance officer at Northeast State Bank, Minneapolis, began the Minnesota Compliance Association four years ago because it was hard to relate to other people at her bank. Ms. Reid said the group helps her feel less isolated.
"People in compliance are an island all to themselves," she said.
Mr. Simon's group is trying to combat that feeling by educating the rest of the bank about the compliance officer's job.
At least once a year, the network invites members to bring their chief executive officers to the meeting. The group hopes senior management will get a sense of the diversity of compliance issues.
"A lot of people complain that no one upstairs knows what we're doing," he said.
Besides talking about issues, members use these opportunities for career networking, Mr. Simon said.
The Southeast Compliance Network also is becoming more of a career network as compliance becomes a more important job in the bank, said Carl Cowart, historian for the group and compliance officer at Wachovia Corp.
"Compliance is now a career in itself," he said. "And compliance officers are recognized as more than tickers and checkers -- they are risk managers," Mr. Cowart said.
This network, with 16 banks from 13 states, meets by phone. The members have quarterly three-hour teleconferences, focusing not only on laws and regulations but also on issues such as how to recruit new compliance officers.
The Bank Legal Services Group in Northern California, which was one of the first compliance networks in the country, is run differently than the rest of these groups.
Alternative to Law Firms
Founded in 1978, its original name was Bankers for Compliance. Five years ago, the network shifted its focus to helping community banks with expensive legal services.
The group's executive director, Leslie Flocchini, is vice president for corporate compliance at the Mechanics Bank of Richmond, Calif.
"When Reg DD came out, community banks were charged $250 an hour at a law firm," he said. The group charges $500 a year, he said.
The network has a contract with the San Francisco-based law firm of Pillsbury, Madison & Sutro. The firm gives the group seminars throughout the year and sends members updates on changing banking law. Members pay an average of $500 a year for the services, said Mr. Flocchini, and Pillsbury gets a lump sum.
Mr. Flocchini said the group helps banks in two main ways: giving them a consistent approach to monitoring compliance and easing their pocketbook.
Ms. Hall of the Boston network said these groups form naturally from compliance officers' need to know everything about the bank. "We tend to be generalists," she said.