Enforcement Actions on Track for a Record Year

NEW HAVEN, Conn., Oct. 14, 2015 (GLOBE NEWSWIRE) -- Regulators continued to crack down on non-compliant community financial institutions (CFIs) in the third quarter, setting 2015 up to be a record year for enforcement activity, according to the latest Banking Compliance IndexTM (BCI).

The index, compiled and analyzed by experts at the Regulatory Operations CenterTM (ROC), found that 170 enforcement actions were issued against CFIs between July and September this year. To date, 553 enforcement actions have been issued in 2015, compared to 620 in all of 2014.

"It's safe to say that 2015 is shaping up to be a banner year for enforcement, as we're on track to exceed last year's numbers," said Pam Perdue, executive vice president of regulatory operations at Continuity. "Regulators aren't taking it easy on banks, despite the increasing number of regulations CFIs are expected to manage."

The Q3 2015 BCI shows that the average CFI needed to devote an additional $29,145 and 384 hours—or the equivalent of 1.23 full-time employees—just to managing the regulatory changes introduced in the third quarter. So far in 2015, the average institution has needed to spend an extra $100,000 to manage the year's regulatory changes. These statistics come as Continuity has just introduced RegAdvisor ProTM, a new regulatory change management solution for banks and credit unions.

Compared to the second quarter, the third quarter saw a slight decrease in the number of new hours required to comply, but according to Perdue, that doesn't mean the regulatory load is getting any lighter. Looking ahead to 2016, several large-scale regulatory changes will take effect, leaving banks with more changes to institute.

"We're seeing a little bit of relief, compared to this time last year, but the fact of the matter is that banks are still spending at least $30,000 every quarter just to keep up with regulatory changes," Perdue said. "This is the new normal, and the sooner institutions can adopt a uniform compliance management system model and insulate themselves from these increasing costs, the better."

About the Banking Compliance Index

The Banking Compliance IndexTM (BCI) is a quarterly tracking index published by the Regulatory Operations Center™ (ROC). It measures the incremental cost burden on financial institutions to keep up with regulatory changes.

The BCI is calculated each quarter using a multivariate analysis that can be weighted across different contexts and is calibrated to determine the regulatory impact on financial institutions of varying sizes, product mixes, and regulatory oversight. Using key indicators including volume, velocity and complexity of regulatory change; time expended to meet regulatory requirement(s); and supervision and the enforcement climate. The BCI data sources include: CFPB, FDIC, FED, NCUA and OCC. The BCI is calculated using an average size institution of $350 million.

Regulatory Changes: A total count of applicable financial regulatory changes throughout the quarter.
Page Volume: The number of pages associated with each of the regulatory changes—indicative of the complexity and workload involved with reviewing and interpreting each change.
Enforcement Action Information (EA): Analysis of the public enforcement actions that have been issued during a quarter.

The BCI employs a data-driven approach to provide unique insights into the depth and breadth of regulatory compliance workload impact measured in terms of a Full-time Employee (FTE) Consumption Score.

Over 1,000 financial institution professionals registered for the Continuity RegAdvisorTM Quarterly Briefing webcast Tuesday, October 6th. During this session, regulatory expert Pam Perdue reviewed the Q3 2015 BCI metrics and provided in-depth information on the quarter's regulatory changes, a workload assessment of these changes and the required actions to avoid penalties. A recording of this session is available here.

About Continuity

Continuity provides technology solutions that automate compliance management for financial institutions of all sizes. By combining regulatory expertise and cloud technology, Continuity provides a proven way to reduce regulatory burden and mitigate compliance risk. Our Compliance CoreTM is an ecosystem of solutions designed to automate all aspects of compliance management, from interpretation of regulatory issuances through to intuitive task delegation, vendor management, business continuity planning and executive board reporting. We are a team of former compliance officers, bankers, examiners and technologists that have made it our mission to reduce the regulatory and operational burden of compliance management, so that financial institutions can get back to the business of banking. Continuity is headquartered in New Haven, Connecticut, and serves hundreds of institutions across 40 states. For more information about Continuity, visit www.continuity.net.

CONTACT: Ian Toner 720-726-5460 itoner@csg-pr.com

Source: Continuity