Connecticut Banking 3Q 2016 by The Warren Group

Third Quarter 2016

Assess Your Examination Process: Tell Us

the Good, Bad & Ugly!

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Third Quarter 2016 • Connecticut Banking Magazine

Third Quarter 2016

Assess Your Examination Process: Tell Us

the Good, Bad & Ugly!

COVER STORY

Assess Your Examination Process: Tell us The GOOD, BAD, & UGLY!....................................... 12

CONNECTICUT BANKERS ASSOCIATION

10 Waterside Dr. Farmington, CT 06032-3083 Telephone: 860-677-5060 • Fax: 860-677-5066 Chairman Richard J. Cantele President & CEO Salisbury Bank & Trust

Second Vice Chairman Michael J. Casparino President Northern Connecticut, People’s United Bank

First Vice Chairman B. Michael Rauh President & CEO Chelsea Groton Bank

President & CEO Lindsey R. Pinkham

Executive Vice President & Treasurer Thomas S. Mongellow First Senior Vice President & Secretary Colleen E. Clancy

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FEATURES

Consumer Harm and ARCH: How the FDIC Determines Your Risk..................................... 4 Employers Now Banned From Seeking Criminal History on Job Applications......................... 7 The Importance of Having a Breach Response Plan in Place............................................. 8 Technology Companies are Encroaching Upon Mobile Banking.......................................................... 10

Connecticut Banking is an official publication of the Connecticut Bankers Association and is published quarterly by

The Warren Group

Design / Production / Advertising www.thewarrengroup.com custompubs@thewarrengroup.com With the exception of official association announcements, the Connecticut Bankers Association and The Warren Group disclaim responsibility for opinions expressed in Connecticut Banking. This publication is intended and designed to provide accurate and authoritative information, not to provide legal, accounting or other professional advice.

CONNECTICUT BANKING Editor

Karen Horanzy

a trademark of The Warren Group Inc. No part of this publication may be reproduced in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system, without written permission from the publisher. Advertising, editorial and production inquiries should be directed to: The Warren Group, 280 Summer Street, Boston, MA 02210. Call 800-356-8805.

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CBA Calendar................................................................ 4 Register Today!.............................................................. 6 Bankers in the News..................................................... 14 Banks in the News........................................................ 16

Connecticut Banking Magazine • Third Quarter 2016

Consumer Harm and ARCH: How the FDIC Determines Your Risk By Nathan McDonald

ecently, the FDIC updated its compliance examination manual to include guidance on evaluating consumer harm and the new Assessment of Risk of Consumer Harm (ARCH), a 170-question preliminary risk assessment used to develop an action plan for onsite compliance examinations. Perhaps one of the most helpful aspects of the guidance is that it clarifies the FDIC’s definition of “consumer Nathan McDonald harm.” Specifically, the new guidance defines consumer harm as actual or potential injury or loss to a consumer. In confirming its long held position, the guidance clarifies that consumer harm conducted through third-party relationships will be attributed to regulated institutions. Thus, under this rather expansive view of consumer harm, institutions may be held to account for any possible injury to consumers regardless of whether consumers incurred monetary loss or any other form of measurable economic harm and regardless of the involvement of bank’s own personnel. The ARCH assessment can be divided into two main sections. The first section identifies an institutions’ inherent compliance risk in the following areas: bank structure, supervisory history and operations.

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mitigating and managing inherent risk; the adequacy of training in terms of timeliness, depth of content, relevance to roles, responsibilities and accountability; and the robustness of the bank’s monitoring activities, in terms of comprehensiveness, independence and depth. Consumer complaint questions integrate oversight and compliance program considerations. As we have recommended in the past, banks should be reviewing external resources, such as complaint board websites, to proactively identify complaints. Questions regarding audit are primarily concerned with scope, independence and qualifications of audit personnel, but this area also includes oversight and monitoring considerations. It is important to note that UDAAP, lending to service members and third-party risk were specifically addressed throughout section, highlighting their continued importance to regulators. Since the ARCH will be used by examiners to conduct an initial risk assessment prior to each compliance examination, we recommend that banks regulated by the FDIC use the ARCH as an exam preparation tool. u Nathan McDonald is an associate general counsel for Compliance Alliance. Compliance Alliance offers a wide variety of compliance support solutions. To learn how to put them to work for your bank, call them at (888) 3533933 or visit compliancealliance.com.

CBA Calendar

SEPTEMBER 2016 19 21

Banks structure considerations include any factors or changes in control, the board, senior officers or key personnel, affiliates or subsidiaries, business strategies and activities that raise compliance risk. Mergers and acquisitions, growth, pricing strategies and fee income are also assessed during this phase. Supervisory history questions consider any enforcement actions, significant issues identified during the last examination, complaints and consumer litigation. Assessment of operations is divided into the following operational areas, as applicable to your institution: lending, deposits, non-deposit products, third party risk, other products or issues and UDAAP. ARCH assessment questions regarding the compliance management system (CMS)/ internal controls track existing guidance set forth in the CMS section of the manual. Accordingly, board and senior management oversight; compliance program (policies, procedures, training and monitoring), consumer complaint response and audit are all addressed. Board and management oversight questions are designed to assess the quality of oversight in terms of comprehension of applicable laws, robustness of discussion, knowledge of the bank’s products and services and effectiveness of monitoring. Compliance program questions are designed to ascertain the adequacy of policies and procedures and their effectiveness in

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Connecticut Banking Magazine • Third Quarter 2016

the Connecticut Bankers Association to be labeled as spam or to never even be received. To make sure you and your organization can continue receiving our legitimate and informative mailings, we suggest that you add the CBA domain (@ctbank.com) to your whitelist, as well as the individual email addresses from any CBA employees. A whitelist is a list of email addresses that you want to receive email from. Adding our addresses to your whitelist ensures that the emails will not be filtered as spam. At the very minimum, we suggest you add the “from” domain (@ctbank.com) into your email system's address book. Additionally, as an employee of a CBA Member, we are continuing to encourage your employees to log in to our website and database management software program. Once logged in, you will be able to access members-only areas and other site resources, manage your profile and directory information, purchase items, register for events and more! We hope you take a moment to whitelist and register with us! We want to keep you advised of all the educational opportunities available as well as important changes affecting our industry. Should you have difficulty or questions about the login process, please don’t hesitate to contact the CBA at (860) 677-5060, or cba@ctbank.com. u

ith unsolicited and unwanted email becoming a larger problem, email services and IT departments have made their spam filters more stringent. Unfortunately, these tougher guidelines for filtering can cause legitimate emails from

Please follow the below instructions to access or create your account information: 1. Visit www.ctbank.com 2. Click

on Login in the upper right corner

3. At the next screen, select

Create new account

4. At the next screen (), complete the requested information and click Continue 5. If your last name and email address are already in our system, you will receive an email from Connecticut Bankers Association with a link to complete your account registration. Once you click on the link, you will need to assign a password to your account. Once assigned, you will be able to login to your account. 6. If you are not already in our system, you will be required to complete a brief new account form. 6

Third Quarter 2016 • Connecticut Banking Magazine

Employers Now Banned From Seeking Criminal History on Job Applications

f you own or run a business – chances are that one of your top concerns is the safety of your employees and the business itself. So it would be natural for you to want to know if job applicants might have a criminal history that could put employees or customers at risk. Right? Well – the Connecticut legislature has just passed and the Governor just signed a new law, commonly referred to as “banthe-box” legislation, that prohibits employers from asking about a job applicant’s prior criminal record on job applications. As a result, effective Jan. 1, 2017, Connecticut employers will not be able to have any questions on the initial employment application seeking information about an applicant’s criminal charges or convictions. Nor may an employer otherwise obtain any such information through other means, such as by getting a criminal background report, prior to interviewing the applicant. An employer may inquire about an applicant’s criminal charges or convictions on an employment application form only if “the employer is required to do so by an applicable state or federal law; or a security or fidelity bond or an equivalent bond is required for the position.” Otherwise, the employer must wait until at least the interview of the applicant to make any such inquiry or to obtain a criminal background report of the applicant. Failure to comply with this new law will subject an employer to an investigation by the Connecticut Department of Labor in response to any complaint filed by an applicant, though as of now, an applicant won’t be able to sue the employer directly in court under this provision. With this new law in place – it’s worth thinking about this statistic: Roughly two million workers are affected by workplace violence annually. What’s the relevance of this stat? Employers have a legitimate need to know whether applicants have engaged in behaviors that could pose a risk to the safety of others. However, with the enactment of this new law in Connecticut,

employers now have to wait to obtain any information about an applicant’s criminal charges or convictions until at least the interviewing process. The key takeaways: This legislation continues the trend of additional governmental intervention into the employment arena restricting an employer’s ability to obtain important information about an applicant’s qualifications for the position. All employers should now review their application materials to ensure that they are compliant with the new law and remove any impermissible criminal history questions from their initial employment applications by Jan. 1, 2017. Employers should be prepared to provide the appropriate forms to applicants at or after the interview seeking their written response to questions about their criminal

history and giving notice to and getting authorization from the applicants if criminal background reports will be obtained. u Courtesy of Kainen, Escalera & McHale, P.C. – CBA provider of Employment Legal Line Service for participating member banks with telephone access to attorneys at their labor and employment law firm.

Free money. First-come, first served. Really. For a limited time, we’re offering members zero-percent Classic Advances to create or preserve jobs in their communities. Our new program, Jobs for New England, will award up to $5 million in interest-rate subsidies every year through 2018. A maximum of $250,000 in subsidy is available per member each year. At current rates, $250,000 can leverage up to $30 million in one-year advances. To find out more about Jobs for New England, contact Fatima Razzaq at 617-425-9564, or fatima.razzaq@fhlbboston.com. But don’t delay. These funds won’t last forever.

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FHLBBoston Federal Home Loan Bank of Boston • 800 Boylston Street Boston, MA 02199 • www.fhlbboston.com

Connecticut Banking Magazine • Third Quarter 2016

The Importance of Having a Breach Response Plan in Place

he possibility of a bank’s systems being hacked are increasing, regardless of the size of the bank. In addition to the well-publicized breaches of mega and regional financial institutions, we are witnessing more reports of attacks on smaller community banks. Your bank should have a workable breach response plan in place on which your staff can quickly rely and follow immediately upon the discovery of a breach. As banks continue to refine their methods in securing systems, hackers are finetuning their skills as well, finding more ingenious ways to crack into systems and ATMs: Attack through third-party vendors. In the most recent case of the JP Morgan

attack, hackers used sophisticated methods to obtain customer data through infiltrating both the bank’s systems through a corporate event website they sponsor, the JP Morgan Corporate Challenge. According to reports, the Russian hacking gang obtained the website certificate for the site’s third-party vendor which allowed them to access communications between visitors and the site, including passwords and email addresses. Direct infiltration of ATMs. Another creative and emerging form of attack is on ATMs where criminals gain physical access to the machine, typically by posing as repair technicians – complete with uniforms and fake credentials – and install malware by plugging a USB directly

The Importance of a Plan

into the machine. The thief is able to walk up to a machine, open the enclosure with a universal key or passcode (similar to hacking fuel pumps at gas stations to skim credit card information) and install mal-

Here are the steps the bank took in the aftermath communications were needed, it was decided that of the breach, which resulted in successfully handling only the affected customers needed to be contacted. both the breach and communicating with customers. These customers were promptly contacted by a spe• Bank staff assessed the situation, notified senior cially trained team of customer service reps, formed management and began an initial analysis to deterspecifically to handle this situation. Each CSR was mine the potential issue as soon as they were notipaired with a bank officer or manager and provided fied by the customer. with a phone script, including an explanation to the • Once it was determined that there was a potential customer of what occurred and next steps. Additionbreach, management met, formed a response team ally, notifications were mailed to these customers. and consulted their formal breach response program • To establish new accounts for the affected customfor next steps. ers, meetings were held at times and branches con• More in-depth analysis and forensic reviews of all venient for the customer. Accordingly, branch office bank and vendor systems were conducted by the hours were extended to accommodate these custombank’s IT in coordination with external vendors to ers, who were also provided an identity protection determine the breadth and scope of the breach. Afpackage. fected computers and systems were taken offline to • Afterwards, the bank made what they felt were necprevent further spread. essary changes to certain systems, software and pro• In addition to the spoofed government agency, other tocols in order to decrease the potential occurrence parties were immediately notified, including potenof future breaches. tially affected vendors as well as the bank’s account- • Overall, the bank was able to determine, isolate and ing and legal advisors. shut down the breach and send out initial customer • Law enforcement divisions were contacted, includcommunication within five days after the initial ing the Secret Service and state and local police decustomer alert. Because they had the foresight to partments. develop and institute a breach response plan, the • Once it was determined to what extent external bank’s staff was able to effectively handle this crisis. 8

Third Quarter 2016 • Connecticut Banking Magazine

ware that compromises the software. This form of attack is being used increasingly more because it is more profitable than attaching skimming hardware. The malware can sit undetected in the system for a longer period of time, thereby allowing the thieves to thoroughly and quickly drain an ATM before it is noticed or serviced by official bank personnel. Malware installed by email attachment. Recently, a community bank’s system was accessed due to malware delivered by email to a teller. From all appearances, the email from a spoofed government site looked legitimate, so the teller opened the attachment. The attachment masked a virus which snaked through the bank’s network, installing malware which allowed the hackers access to various systems and files (including a Microsoft Office language pack translator, which was manipulated and activated by the malware, most likely to translate English key strokes into a foreign language). The hackers were able to access and make changes to a number of customer accounts. Luckily for the bank, a customer noticed a simple discrepancy on their statement and notified the bank, which was able to act quickly to the attack before loss of any customer funds. The bank’s staff was able to respond efficiently because a breach response program was in place. To see the steps the bank took, see sidebar at left.

Does your bank have a breach response plan? Resources are available for you and your staff to develop and implement a breach response plan. If your bank is a member of the American Bankers Association, you can learn more or access materials such as a Full Communication Tool Kit at aba.com/cybersecurity or contact ABA’s Doug Johnson (djohnson@aba.com) or Heather Wyson (hwyson@aba.com) at 1-800-BANKERS. Also, if your bank is not a member already, consider joining the Financial Sharing and Analysis Center, a nonprofit organization uniquely dedicated to the financial industry as a go-to resource for cyber and physical threat intelligence and information sharing. Visit fsisac.com or call member services at 877-612-2622 for more information. u

The best things in life are free. Especially money. We’re offering members zero-percent Classic Advances, on a first-come, first-served basis, to create or preserve jobs in their communities. Our new program, Jobs for New England, will award up to $5 million in interest-rate subsidies every year through 2018. A maximum of $250,000 in subsidy is available per member each year. At current rates, $250,000 can leverage up to $30 million in one-year advances. To find out more about Jobs for New England, contact Fatima Razzaq at 617-425-9564, or fatima.razzaq@fhlbboston.com. But don’t delay. These funds won’t last forever.

See what your cooperative can do for you!

FHLBBoston Federal Home Loan Bank of Boston • 800 Boylston Street Boston, MA 02199 • www.fhlbboston.com

THANK YOU FOR YOUR CBA FED PAC CONTRIBUTIONS Your strong support of CBA FED PAC allows these resources to be used wisely in conjunction with our federal legislative agenda promoting the banking industry.

Connecticut Bankers Association ctbank.com

2015 CBA FED PAC PARTICIPATING BANKS BBN Chelsea Groton Bank Collinsville Savings Society Darien Rowayton Bank Dime Bank Eastern Savings Bank Essex Savings Bank Fairfield County Bank First County Bank First National Bank of Suffield

Guilford Savings Bank Ion Bank Jewett City Savings Bank Liberty Bank Litchfield Bancorp Milford Bank Naugatuck Valley Savings and Loan Newtown Savings Bank Northwest Community Bank People’s United Bank

Salisbury Bank & Trust Company Savings Institute Bank & Trust Simsbury Bank Stafford Savings Bank Start Community Bank Thomaston Savings Bank Union Savings Bank Webster Bank, N.A. Windsor Federal Savings & Loan

Connecticut Banking Magazine • Third Quarter 2016

Technology Companies are Encroaching Upon Mobile Banking How Community Banks Can Fight Back By Nicole Rovi and Ryan Whalen

he growing customer utilization of mobile technology has driven investments in mobile banking for banks across the country over the last decade. Spending on information technology at banks has increased by over 49 percent over the last five years. These investments have generally been defensive in nature. While some early adopters realized a small increase in customers, community bank utilization typically protected them from losing deposit share to the massive online systems of the big banks. Whether or not to play in mobile banking is now old news; mobile is now a necessary product offering. Designing the perfect mobile banking application is the next market disruptor threatening community banks. Ranging from mobile payments to money transfer applications, technology companies are encroaching on mobile banking and offering more complex services, including small business lending and personal financial management. These applications utilize detailed and clear images and provide the customer with budgeting tools and tips, as well as insight into his or her spending patterns and spending history. Applications developed by technology companies are capturing community banks’ customers because they provide a more interactive and user-friendly experience.

The introduction of Apple Pay, a mobile payment platform which links a consumer’s credit and debit cards to his or her mobile devices, and Mint, a web-based personal financial management tool, have sent shockwaves throughout the banking industry. With the development of more complex banking functions on mobile applications and online, technology companies have become increasingly prevalent throughout the banking industry. Community banks must evaluate their position in the mobile banking space and determine how they can compete with established technology companies that have greater resources, reach and expertise on the mobile platform than most community banks. Like the initial adoption of mobile banking itself, it is imperative that community banks provide their customers with these services before their customers find alternatives.

Expanding Mobile Horizons Most mobile banking applications created by community banks have been designed with simple functions in mind, such as monitoring accounts and paying bills. Consumers are becoming more interested in money management tools on mobile devices, a feature readily available on applications created by technology 10

companies. For example, Mint provides the customer with a simple, interactive process that allows the customer to budget, track spending patterns, view his or her credit score, and other, more complex features. In a recent study conducted by the Aite Group, 86 percent of banks surveyed had the ability to complete bill pay from their mobile platform, while only 49 percent had the tools to help customers with budgeting and 48 percent had the ability to categorize expenses. This is a missed opportunity for community banks, as consumers who value budgeting tools might download one of the many applications available, as opposed to the app of the community bank that they bank with. A 2013 Cisco Customer Experience Report that focused on retail banking showed that customers in the United States are willing to provide more of their private information in exchange for customized banking services. In this case, the bank will miss out on valuable information about their customers’ spending habits and the opportunity to further their relationship with the customer.

Adding On Value Mobile money transfer applications have become popular as a way to con-

Third Quarter 2016 • Connecticut Banking Magazine

nect individuals who bank with different companies for the purposes of mobile payments. Applications such as Venmo that use social networks to connect individuals have become increasingly popular among the younger generations as a more convenient and reliable way to repay others. While many money transfer applications do not allow users to transfer money between their own personal accounts (a function most mobile banking applications provide), it fills a need that mobile banking applications cannot; peer-to-peer transfers, regardless of one’s bank affiliation. Mobile money transfer apps have become a threat to traditional banks as they provide convenient banking services to a larger network of people. Community banks can compete with technology companies by implementing new technology and mobile app add-ons. Relative to banking, there is a distinct difference in generational values. Generation Y (born in the 1980s and 1990s) and Millennials (born between 1990s and early 2000s) value convenience and speed over relationships, while older generations often appreciate the personal touch that is associated with community banks. Banks can make their mobile applications more inclusive to all demographics by utilizing add-ons that incorporate videoconferencing into the bank’s existing mobile app. These add-ons, such as Linqto’s Personal Banker app, give the customer the option to consult a bank employee face-to-face over videoconferencing done within the app, rather than using the traditional help window. Innovative products like this can help bankers bridge the gap between impersonal and relationship banking; ultimately leaving the choice to the consumer. If consumers are unable to find what they need from their bank’s mobile application, it is exceedingly simple to find alternative solutions. Banks need to determine the most pertinent needs of their customers and implement them into their mobile applications so that they can capture valuable information and strengthen customer loyalty, both which will build value for the institution. u

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There’s no such thing as a free lunch. But money, that’s a different story. We’re offering members zero-percent Classic Advances, on a first-come, first-served basis, to create or preserve jobs in their communities. Our new program, Jobs for New England, will award up to $5 million in interest-rate subsidies every year through 2018. A maximum of $250,000 in subsidy is available per member each year. At current rates, $250,000 can leverage up to $30 million in one-year advances. To find out more about Jobs for New England, contact Fatima Razzaq at 617-425-9564, or fatima.razzaq@fhlbboston.com. But don’t delay. Zero-percent funds won’t last forever.

See what your cooperative can do for you!

FHLBBoston

Nicole Rovi and Ryan Whalen are financial analysts in FinPro’s Consulting Division. They may be reached at (908) 604-9336 or nrovi@finpro.us and rwhalen@finpro.us.

Federal Home Loan Bank of Boston • 800 Boylston Street Boston, MA 02199 • www.fhlbboston.com

Connecticut Banking Magazine • Third Quarter 2016

Assess Your Examination Process: Tell Us

the Good, Bad & Ugly!

By Scott Polakoff and Stephen Brown Klinger

ankers operate in a highly-regulated environment, and regulatory examinations are a necessary ingredient for maintaining a safe and sound financial system. As we all know, though, examinations can often go awry for myriad reasons, and recent observations suggest that we are at risk of veering away from the collaborative approach to much more of a regulatory “gotcha” mentality. As you may be aware, the Regulatory Feedback Initiative (RFI) consists of an anonymous electronic survey for bankers to provide an assessment of their most recent examination or visitation. The information is aggregated and analyzed on a national level to improve the regulatory examination process for banks through two fronts: 1. Survey results are communicated to bank regulators on a routine basis when unique examination trends are discovered and 2. Custom bank reports are available to banks to aid them in preparing for an upcoming exam by identifying trending areas of focus or criticism.

Created by the Coalition of Bankers Associations in 2011, banks have provided feedback on over 3,000 examinations. In 2015 FinPro joined this important effort to assist with analyzing the data generated by RFI and provide suggestions for improving the survey. The coalition’s leadership, working closely with FinPro’s advanced analytic group and staff of former senior regulators, has streamlined the survey process and improved the relevance of questions. The enhanced survey that rolled out in May 2016 has cut the number of questions by almost 50 percent, which is projected to reduce the average survey completion time from 27 minutes to less than 15 minutes. While this new platform is very exciting, its usefulness is determined by banker involvement. The survey results truly make a difference, and we wanted to share with you some examples of how the RFI survey provides actionable feedback. Below are three items that, based on the responses generated by banks in the survey, the regulatory agencies should start, stop and continue: Start: Create an appeals process that eliminates any concerns of regulatory retaliation. The Riegle Community Development and Regulatory Improvement Act of 1994 required that all regula12

Third Quarter 2016 • Connecticut Banking Magazine

Safety and Soundness Examination Exam Area

Compliance Examination

% of Institutions Receiving Criticism

Exam Area

% of Institutions Receiving Criticism

Interest rate management approaches

24%

Real Estate Settlement Procedures Act

24%

Credit administration practices

23%

Regulation Z (Truth in Lending Act)

23%

Adversely classified asset levels

21%

Re HMDA/Regulation C

23%

Real Estate appraisal and evaluation processes

20%

Flood Disaster Protection Act

18%

Regulation B (Equal Credit Opportunity Act)

17%

Business Continually Planning

17%

tory agencies construct an appeals process that attempts to remedy contested filings. RFI data shows a high correlation where banks reported being “unsatisfied” or “extremely unsatisfied” with their examination to whether or not the “examination resolved issues and recommended corrective action in a fair and reasonable manner.” Bankers’ comments yearn for a healthy appeals process that is standardized across agencies and void of regulatory retaliation. From an article published in the American Banker on April 8, 2015 titled Fear of Retaliation Stifles Banks’ Appeals to Regulators, FinPro’s suggestions for improvement are simple and easy to implement. First, examination standards and findings should be the same regardless of an FDIC, OCC or FRB examination team. Second, appeals should be reviewed and resolved by an interagency group of senior executives. Third, appeals should have all names and identifiable information redacted before submission to the interagency group. Decisions should be made based on the facts of the case. Stop: Only 25 percent of the banks responding to the RFI agreed that “examiners applied ‘guidance,’ as opposed to enforceable regulation, appropriately” during their examination. The most common divergences in expectations historically surrounded the application of Appraisal and Evaluation Guidelines (FIL-82-2010), but most recently disagreements regarding the Guidance for Managing ThirdParty Risk (FIL-44-2008) have emerged as a trend. Not surprisingly, 51 percent of the bankers who disagreed with the above statement reported their examiner-in-charge had been supervising bank examinations for less than five years. Augmenting the experience of examiners is only one part of the solution though. Some FILs, such as 44-2008, contain language stating the guidance “should not be considered as a set of required procedures.” However, others contain language that is more ambiguous. For example, 82-2010 states that “the guidelines enhance the requirements for collateral valuation methods …” The mention of requirements is understandably confusing. Changes in staffing must be combined with a more clear communication of expectations from the agencies to banks. Continue: The most bipolar results from the current RFI survey data surround exam preparation. Overall, institutions had positive feedback pertaining to the examination staff being “knowledgeable about important issues and regulatory requirements” and “knowledgeable about your institution.” This indicates an adequate level of preparation by staff prior to the examination. However, there have been a significant number of comments pertaining to banks being given short-notice to prepare themselves for the examination.

Examiners should continue to be vigilant in preparing for the examination and be just as pro-active in communicating information about the schedule and timing of the examination as early as possible In combination with providing examiners feedback, the improved survey and greater bank participation allows for better reports to aid bankers in upcoming examinations. Past comments from the survey included requests for information about: • The BSA and IT as growing hot topics • A new focus on detailed policies • The examiner spent 75 percent of their time on interest rate risk • Application of UDAAP specific to my bank • Generally, when the goal posts moved We hear you, and the reports from the new survey will greatly improve your bank’s ability to stay aware of hot topics in preparation for examinations. While it is always incumbent on senior managers and directors to stay educated on current industry issues and regulations, here are the areas of greatest criticism in examinations conducted over the last two years. Bank participation is paramount to the success of the RFI. We encourage all institutions to visit www.allbankers.org to share anonymous information about their last examination. u Scott Polackoff is executive vice president and Stephen Brown Klinger is a director at FinPro Inc.

More information

Please join colleagues across America by participating in the Regulatory Feedback Initiative (RFI). Taking our new, streamlined survey is the only way to make bank exams more transparent and hold examiners to consistent standards. We are asking every bank across the country to complete our new, streamlined survey after each Safety & Soundness Exam and Compliance Exam so that we can track what bank regulators are doing. Contact the CBA at cba@ctbank.com for more information. 13

Connecticut Banking Magazine • Third Quarter 2016

Lisa McDonnell

Peter Gerardi

Debra Telman

Melissa Mednick

Lisa Cole

Elaine Ruffo

Kathleen Katrenya

Frank Fetzer

Denise Goucher

Zuleyma Stryker

Thomas Whitbread

Charles Lomnitzer

Tara Celani

Joe Brancato

Karina Towne

Nicole Chase

Lisa McDonnell of Bankwell was appointed to the Board of Directors of the Fairfield County Sports Commission. Melissa Mednick was promoted to first vice president and Lisa Cole joined as assistant vice president and branch manager. Jamison Flora joined Berkshire Bank – CBT Region as vice president, business banking team leader and SBA liasion. Frank Fetzer joined Chelsea Groton Bank as retail loan originator. Charles Maynard joined Dime Bank as an assistant vice president and branch manager. Denise Goucher celebrated her 40th anniversary with Essex Savings Bank. Fairfield County Bank hired Zuleyma Stryker as assistant vice president of employee relations and staffing and George Bossis as executive vice president of retail lending. Andreas Kapetanopoulos of Farmington Bank was named the 2016 Financial Services Champion of the Year for Connecticut by the Small Business Administration. First County Bank promoted Sheila Content to branch manager.

George Bossis

Andreas Kapetanopoulos

Diane Roveto and Kimberly Anne Curry

Marlene Piche

Ion Bank appointed Robert Cappelletti, James McCowan and Elizabeth Verna to the board of corporators.

Sheila Content

Phaedra Yates

Jennifer Marchand

Mark Perbeck

John Olerio

bank security officer; Debra Telman to branch officer; and hired Kathleen Katrenya as vice president of retail sales and marketing.

Liberty Bank appointed Rosario Pulino to Union Savings Bank promoted Nicole assistant vice president and financial advisor and Chase to assistant vice president and branch Phaedra Yates to corporate secretary. manager; Jennifer Molony to assistant vice president and branch manager; Joe Brancato Peter Gerardi joined Newtown Savings Bank as to vice president and digital product manager; assistant vice president and branch manager. Karina Towne to assistant vice president and retirement center manager; and hired James Cotter joined Salisbury Bank as executive Heidi Capodanno as the director of customer vice president and COO. experience for the innovation center; Hank Millard Jr. as merchant sales and service Elaine Ruffo of Savings Institute Bank & Trust officer of payment services; and Stephanie received Vantis Life’s President’s Council. Ruby and Shannon Mcguill as assistant branch managers and retail banking officers. Marlene Thomas Whitbread of Start Community Bank Piche was inducted to the board of directors was elected to the board of the Greater New and trustee of the regional YMCA of Western Haven Chamber of Commerce. Connecticut. TD Bank, N.A. hired Wanda Viera and Charles Lomnitzer as store managers, and promoted Tara Celani to vice president and retail market manager. Kimberly Anne Curry and Diane Roveto of Thomaston Savings Bank received Vantis Life’s President’s Council. Torrington Savings Bank promoted Jennifer Marchand to vice president and controller; Mark Perbeck to assistant vice president and 14

Webster Bank, N.A. promoted Eric Unger to senior vice president of physical environments; Gabe Rinaldi to senior vice president, project management; Heidi Otton to senior vice president and manager of secondary markets; Karen Guisto-Iavasile was promoted to senior vice president, manager of underwriting and processing; and Frank Castagna to senior vice president and credit executive. John Olerio received a Top Program Manager award from Bank Investment Consultants. u

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Connecticut Banking Magazine • Third Quarter 2016

Bankwell partnered with The Fairfield Museum and History Center.

Bank of America employees volunteered to teach financial education with Junior Achievement.

Bank of America teamed with Knox Parks to plant 20 trees and pick up tree branches for Earth Day.

Connecticut Mutual Holding Co. hosted their 6th Annual Business Breakfast to benefit the United Way.

Bankwell teamed up with the Kiwanis Club to furnish funds and volunteers to fix up a home for HomeFront Inc.

Eastern Savings Bank won the BFS-donated “Drive to 125” $500 charity check for the Center for Hospice Care.

Bankwell sponsored the 11th Annual STAR Walk, 5K Run and Roll.

Bankwell hosted a Shred Day.

Essex Savings Bank presented over $13,000 to the top 10 recipients of this year’s Community Investment balloting initiative.

Berkshire Bank recognized small business week by awarding $17,000 in grants to Small Business Development Centers and SCORE. Berkshire Bank Foundation awarded $55,895 in grants and pledges to 17 non-profit organizations. Berkshire Bank offices closed for a half day for employees to volunteer in the communities they serve.

Bankwell sponsored Trackside Teen Center of Wilton Annual Golf Tournament.

Berkshire Bank Foundation provided $38,000 to New England Habitat for humanity in partnership with NESN.

Essex Savings Bank held its 3rd annual Shred Event. Essex Saving Bank hosted the Down County Division of the Middlesex County Chamber of Commerce. Essex Saving Bank hosted a SCORE Marketing Meeting.

Third Quarter 2016 • Connecticut Banking Magazine

Essex Saving Bank sponsored the YMCA Valley Shore “Healthy and Balanced Kids Day.” First County Bank presented $7,500 sponsorship check to the Norwalk Summer Concert Series.

Fairfield County Bank donated five laptops to the Wooster School Physics Lab.

First County Bank hosted “Lunch and Learn” on building good credit.

Jewett City Saving Bank participated in the Great Strides Walk and raised $1,400 for the Cystic Fibrosis Foundation.

In honor of International Women’s Day, Liberty Bank made a $1,500 donation to the Connecticut Council for Philanthropy.

First County Bank employees volunteered to beautify Glenbook Neighborhood.

Liberty Bank participated in New London’s St. Patrick’s Day parade.

Fairfield County Bank donated $43,000 to four local United Way organizations. The Ion Bank Foundation donated a $1,000 check to Hoops4Life.

Farmington Bank welcomed high school students during their Third Annual Junior Achievement Career Walk. The Ion Bank Foundation awarded $60,000 to 56 local nonprofit organizations.

First County Bank presented at a Women in Business Event, “Hidden Strategies for Business Effectiveness.”

First County Bank participated as a silver sponsor for the Hope in Motion Walk & Run.

Liberty Bank Foundation co-sponsored a career fair for high school students.

Liberty Bank donated kangaroo stuffed animals to the Western Market nonprofit Safe Haven.

Jewett City Savings Bank participated in the 2016 Walk for the Center for Hospice Care and raised $1,450.

Liberty Bank was the lead sponsor for “Men Who Cook.”

Connecticut Banking Magazine • Third Quarter 2016

Liberty Bank sponsored Senator Kevin Kelly’s essay contest titled “Women in History.”

Simsbury Bank was the presenting sponsor of Hill-Stead Museum’s May Market and a patron sponsor of their Benefit Dinner Auction gala.

Newtown Savings Bank raised $6,963 for the American Cancer Society during the Newtown Relay for Life. Simsbury Bank was the presenting sponsor of the Downtown YMCA Mission in Motion Cycle-a-thon.

Simsbury Bank sponsored the Granby Education Foundation’s annual Gran-Bee event. Union Savings Bank participated in a book and school supply drive.

Union Savings Bank accepted the Dedicated Community Partner Award by the Portuguese Cultural Center.

Newtown Savings Bank participated in the United Way of Western Connecticut’s Day of Action.

Simsbury Bank was the platinum sponsor of the “Try Simsbury” – Meadows & Mountain Adventure Triathalon. Simsbury Bank held a free document shred day. Northwest Community Bank presented a $1,000 check to LiveStrong at the Farmington Valley YMCA.

Union Savings Bank sponsored and hosted the Housatonic Resources Recovery Authority’s Recycling Billboard Contest Award Ceremony. Union Savings Bank celebrated their 150th anniversary holding a Birthday Card Design Contest for youngsters to win up to $250.

Salisbury Bank’s 2016 Annual Scholarship Program awarded $2,500 to local students seeking a college degree. Simsbury Bank adopted Tariffville Elementary School for “Junior Achievement in a Day.”

United Bank presented a $10,000 check to Covenant Prep School.

Savings Institute Bank & Trust donated $2,500 to seCTer Project.

Simsbury Bank gave a $2,500 sponsorship to Savings Institute Bank & Trust supported Joshua’s Trust 50th Anniversary with a Gold Sponsorship. Celebrate West Hartford Festival.

United Bank presented a $5,000 check to JDRF.

Third Quarter 2016 â&#x20AC;˘ Connecticut Banking Magazine

United Bank presented a $5,000 check to Amyâ&#x20AC;&#x2122;s Angels.

Webster Bank was a lead sponsor of the UCONN Championship Parade. Webster Bank hosted a student job shadow opportunity.

United Bank presented a $5,000 check to Vernon Historical Society.

United Bank presented a $50,000 check to MARC.

United Bank presented a $10,000 check to the Connecticut Science Center.

United Bank Foundation presented a $100,000 check on behalf of the United Bank Conference to Asnuntuck Community College.

Webster Bank awarded $1,000 each to 80 nonprofit organizations.

Webster Bank teamed up with Goodspeed Musicals to present a program on estate planning and planned giving set to music.

This little piggy had none!

Eight in ten U.S. households 1 do not have a life insurance agent.

Vantis Life helps banks fill the role of life insurance agent for core mass-affluent customers. We are the industry leader in: • Providing a selection of simple products for your core customers • Wholesaling and training support • Agent and customer-facing technology To find out more contact John Richter, National Business Development Director, at 860-298-5477, or jrichter@vantislife.com

Recipient of the 2016 BISA Technology Innovation Award 1

www.vantislife.com/ABLE

Source: LIMRA Insurance Barometer Study