Many BDOs and MLOs don’t get along with compliance officers. And, it’s their own fault.

Compliance disagree

BDOs pretty universally refer to compliance officers as “Compliance Nazis.” They whine that the “compliance people won’t let us do anything.”

I think I know why this happens, at least most of the time: Bank sales people, including BDOs and MLOs are notorious for dreaming up a whiz-bank new business idea, almost always justified by saying, “Well, other banks are doing it.”

The last people to hear of this new idea usually live in the compliance department. First they hear of it might actually be when the advertising hits. As you might expect, when the compliance officer nixes the entire effort, there’s a lot of huffing and puffing, recrimination and hard-feelings.

If I were the CEO, the question I’d have is, “Why didn’t compliance know about this beforewe got so far down the road?” Of course, about half the time the CEO is the one who agreed to do this in the first place and didn’t think to ask if it would fly, compliance-wise.

If you are a BDO or MLO or hot shot retail banker, and haven’t read the Fed’s guidelines on Risk-Focused Compliance Exams (which began in last year), you might want to make time to get up to speed. (Read the guidelines.) When you’re done, you’ll understand the new bank marketing reality: the stock of the Compliance Officer (or Risk Officers) is headed up. Whether or not a bank gets to fully participate in revenues of the new banking world depends upon the Compliance Officer just as much as upon the banks’ sales efforts. It is not an exaggeration to say the bank’s success depends in large part on having on board a “here’s how we can make things work and stay inside the lines” Compliance Officer.

Now more than ever, if a bank can’t gather new business and comply with the rules at the same time, they can’t stay in banking. The Compliance Officer (or Risk Officer) is headed for a seat at the management table. Bankers who are unwilling to get with the new program should be thinking about a new career.


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