Trust Updates Archive
(October 6, 2009 --Chicago, IL) -- In the wake of the mortgage crisis, bank examiners are more insistent that bankers document their compliance with laws and regulations, even those that do not apply to them.
During a recent bank examination, the head of a $125 million trust department was told he needed to provide the OCC bank examiner with written documentation that the trust division was not subject to Regulation R, the bank broker-dealer rule. The trust banker then asked how he was supposed to do that, what documentation the examiner wanted to see. The examiner responded that was the banker’s problem, not his.
The OCC has not yet issued a Reg R guidance. Interagency guidelines are being developed and are currently "under review" by federal bank and securities regulators.
Until such guidelines are issued, commercial bank examiners, with limited training in trust and other fiduciary matters, may be unaware of how to assist the bank in determining the degree of compliance needed.
For banks that are subject to Regulation R, regulators say that compliance testing to determine if they are meeting the “chiefly compensated test” will begin January 1, 2011.
For more info on Regulation R click below for:
* Final Regulation
* FDIC 1-page Overview
* SEC Small Entity Compliance Guide
For more on this story, see the current issue of Trust Regulatory News.
No statement in this issue is offered as or should be construed as legal opinion or advice or as an indicator of future performance.
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