PRACTICAL SOLUTIONS
YOU HAVE BEEN HIT WITH AN ENFORCEMENT ACTION —
A n enforcement action is one of the most
painful experiences in the life of any institution . Enforcement actions come in all types , shapes and sizes — in areas ranging from financial crimes compliance to consumer protection to trading room misconduct . They may be informal and private , or formal , public and enforceable in court . They can result in reputational damage , fines and penalties , along with labor-intensive remediation , monitor and independent consultant activities — all impacting the bottom line . These activities command the immediate attention of team members , diverting them from maintaining and growing the business .
In a worst-case scenario , credibility with your regulators is damaged , sometimes requiring a change in senior management and even in the board of directors . In cases where a monitor is assigned by regulators or law enforcement agencies , interacting with them will require even more time and attention than working with internal audit staff . Examinations of banks under a formal or even informal action can be intense , broad-based , multi-year and expensive . Got your attention ?
NOW WHAT ?
Denial
If you have already made a mistake in the eyes of regulators or law enforcement , do not make another by going into denial over a looming enforcement action . Too many companies do this . It delays rallying the necessary resources and funds to effectively and efficiently remediate the cited issues . Compounding your errors by refusing to recognize reality is a major misstep . Complaining about the situation and arguing with examiners is often counterproductive , because over the long term , you have to work with your examiners . Put anger and frustration aside and take time to understand what the issues are , including root causes . As much as six months may elapse from the time examiners first advise you of their concerns and the issuance of an enforcement action . Do not waste this time — use it to get started on remediating the regulators ’ concerns . One of the most powerful things you can do is to let the regulators know that you get it and that you will take every action necessary to correct the problems .
32 ACAMS TODAY | SEPTEMBER – NOVEMBER 2017 | ACAMS . ORG | ACAMSTODAY . ORG