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Managing Merger & Acquisition Compliance The Compliance Officer’s Role in Mergers and Acquisitions

2017 GBA Advanced Compliance School

May 12, 2017

Louvera Walden, CRCM

Assistant Director Southeast Region

Risk, Information Security and Compliance Solutions

Managing Merger & Acquisition Compliance

• What exactly did we purchase?

– Bank

– Branch(s) of bank

– Failed bank

• Where are they located?

– Same state

– Different state

• How big are they?

• What products do they offer?

• When will this acquisition be final?

• When will the conversion take place?

2

Managing Merger and Acquisition Compliance

• Interim Procedures

– Consolidating cash transactions for CTRs

– Cashing “on-us” checks for both banks

• Within 60 days of Acquisition Date

– Notify FEMA of any change in servicer of a loan

– Transfer MLO registrations to acquiring bank

• ASAP

– Review vendor list and contracts

– Review contracts for cancellation procedures

3

Deposit Compliance • FDIC Insurance • Reg. DD • Reg. GG • Reg. CC • Reg. E • Escheatment • Garnishment • RFPA

Managing Mergers and Acquisitions Compliance

5

• FDIC Insurance Coverage

– Determine which depositors of both banks will be impacted.

– Customers and bank have 6 months to retitle accounts to ensure

maximum FDIC coverage.

– Send letter to impacted customers.

– Ensure that all customers opening new accounts with either

bank are informed that they are now insured as one institution.

– Have new customers sign acknowledgement.

• Reg. GG

– Review procedures

– Review certification documents

– Are accounts noted in some way on the system?

• New Accounts

– Determine how new accounts will be handled:

Will the purchased bank begin to sell acquiring bank products and

services with same terms as acquiring bank?

Will the purchased bank continue to sell purchased banks’ products and

services with same terms as acquiring bank?

– Provide Conversion booklets or Change in Terms notices with all new accounts

opened at least 30 days prior to conversion date.

Consider changing new CD terms and conditions to match acquiring

bank’s CD products immediately.

• Disclosures

– Review copy of all deposit compliance disclosures and review for

differences.

– Review procedure manual for deposit account compliance.

Deposit Compliance

Deposit Compliance in Mergers and Acquisitions

• Reg. CC

– Cut off time

– Hold notices

– Who handles

• Reg. E

– What products are offered by purchased bank?

Payroll cards

Gift cards

Overdraft coverage

Internet banking

Mobile banking

– How are error resolutions handled?

– Will combined bank become remittance transfer provider?

6

Deposit Compliance in Mergers and Acquisitions

• Reg. D

– Are accounts closed or changed?

– Are transactions reviewed on a monthly cycle or statement

cycle?

– Review samples of customer notifications

• Escheatment

– Who handles?

– What are dormant account procedures?

– Are fees charged for inactive or dormant accounts?

– Are records properly retained?

• Garnishment

– Are there policy/procedures for garnishment of federal benefits?

– Are records properly retained?

• RFPA

– Review RFPA log

– Are there procedures?

7

Loan Compliance • Products • Flood Insurance • HMDA • ECOA • RESPA • TILA • Reg. O • UDAAP • Safe Act • Military Lending and

SCRA • Consumer Leasing • Dealer Loans • FDCPA • Credit Cards

Loan Compliance in Mergers and Acquisitions

• Products

– What loan products does the purchased bank offer?

Consumer

Commercial

Mortgage

Qualified Mortgages

ARMs

HELOCs

Open-end credit not secured by RE

Dealer loans

Consumer leasing

Credit cards

• Review Disclosures, Policies, and Procedures for

Each Product

9


• Flood Insurance

– What vendor is used for SHFD?

– Is a vendor used for follow-up and force-placement?

– Does bank fall under small lender exemption?

– What method is used to determine RCV?

• HMDA

– Is this a HMDA reportable bank?

– What software is used?

• ECOA

– Are loan denials/withdrawals centralized?

– Does purchased bank have 2nd review process in place?


• RESPA

– Are there affiliated business arrangements?

– Send Transfer of Servicing notices

– Review list of settlement services providers

– Review escrow processes

10


• Truth in Lending

– Sample consumer loans to verify APR and finance charge

– Review list of all fees charged on consumer credit

– Review list of any loan rescinded by customer

– Review all initial disclosures

• Military Lending Act and SCRA

– Review list of all military customers of acquired bank

– Review policies and procedures

• Reg. O

– Review list of executive officers and board members

– Review copy of call provisions used

– List of outstanding loans as of acquisition date

• UDAAP

– Determine co-signer liability notification process

– Determine complaint management policy/procedure

– Review compliant log

– Review any outstanding complaints

• Consumer Leasing

– Review lease disclosures for each type of lease

• Dealer Loans

– Review policy/procedures

– Review list of dealers and dealer contracts

• Credit Card

– Does purchased bank offer directly or through a vendor?

– Review policy/procedures/disclosures

– Review vendor contract (if applicable)

• Fair Debt Collection Practices Act

– Does purchased bank collect debt for 3rd parties?

– Is debt collection handled by a third party?

– Review policy/procedures/contracts

11

Other Bank Products

• Non-Deposit Investment Products

– Does the bank have employee that sell NDIPs?

– Is employee a joint employee?

– Are these products offered via a joint marketing agreement with

a 3rd party?

– Review agreement, disclosures, and signage

– What products are sold?

Investments?

Insurance?

• Affiliated Company

– Does bank or bank holding company own any affiliated business

– i.e. investment company, Insurance company, mortgage

company?

– Review policy/procedures/disclosures for each

12

Operational Compliance • BSA

• FCRA

• Privacy

• CRA

• Marketing and E-

Banking

Operational Compliance in Mergers and Acquisitions

• BSA, AML, CIP, OFAC

– Does purchased bank use software to aid with this compliance?

– Review purchased bank’s CIP to determine if match to acquiring

bank

– Train purchased bank staff on acquiring bank’s CIP

– Review list of high risk entities

– Review SARs

– Review exemption list

– Review risk assessment, policy, procedures

• FCRA

– Review procedures for reporting to credit bureaus

– Review procedures for correcting inaccurate reports

– Review ID theft procedures/red flags/address discrepancy

– Update combined bank ID theft risk assessment and red flags

procedures

• Privacy

– Review privacy notice

– If opt out allowed, obtain list of all customers who opted out of

sharing

– Determine if there are any changes in affiliates

– Determine if there are any changes in privacy policy/notice


– Update Board approved privacy notice

– Send updated notice to customers

• CRA

– Review purchased bank policy/procedures/public file

– Update bank assessment area

– Update bank public file and lobby notices

– Perform combined bank loan portfolio analysis

– Obtain list of all community development loans

14

Operational Compliance in Mergers and Acquisitions

• Marketing/E-Banking

– Review purchased bank’s internet site

– Determine when sites will be merged

– Review social media sites and policy

– Review marketing and e-banking policy and procedures

15

Compliance Management in Mergers and Acquisition

16

Compliance Management in Mergers and Acquisition

• Review purchased bank’s compliance program

– Policy

– Procedures

– Monitoring

– Risk assessment

– Training

– Examination reports

– Audit reports

– Board reports

• Where are weaknesses?

• What vendors are used?

• Identify training needs

• Update combined bank risk assessment/program

17

Managing Merger and Acquisition Compliance

18

Thank You

Louvera Walden, CRCM

[email protected]

229.921.3381

419 Walden Managing MA Compliance Compliance Merger Acquisition Project Checklist

PRIMARY DEPARTMENT(S) IMPACTED,

AREAS OF RESP TARGET DATE ISSUE PRIORITY ASSIGNED STATUS

COMPLETION

DATE

IDENTIFY KEY DATES

Executive Management (All) Define Acquisition / Merger Date High

Executive Management (All) Define Conversion Date (for all systems) High

Executive Management (All) Define any system collapse dates High

DAY 1 ACQUISITION DAY 1 (Pre Conversion) I

Management (All) DAY 1

Bank Name: Change all existing forms / disclosures to XXX name

(acquired bank systems) High

DAY 1 Address: Determine Address for Forms Medium

DAY 1 Bank Regulator: Change Regulatory Name on any forms High

Marketing, E Banking, Compliance DAY 1 Website: Welcome Banner Message Medium

Marketing, Compliance DAY 1 Welcome Letter: Introduction Only Low

Management (All) DAY 2

Obtain list of all vendors and obtain copy of all contracts. Send letters

to vendors indicating when contracts will be cancelled. medium

Interim Procedures (before conversion)

Operations, BSA Officer, Compliance DAY 1 Consolidating Cash Transactions for CTRs High

Operations, Compliance DAY 1 Cashing "ON-US" Checks for both banks High

Deposit Insurance

Marketing Pre Conversion Welcome letter indicating combined deposit base Low

Branch Administration, Compliance

Pre Conversion

FDIC acknowledgment to be signed for new deposit accounts to

acknowledge that existing and acquired entities are insured as one

institution

medium

Pre Conversion

FDIC insurance notice to be signed when deposit accounts at are

opened- both signatures required on a joint account

medium

Marketing, Compliance Pre-Conversion

Obtain Compliance Approval on all Customer Correspondence,

Disclosures, Fees, Signage prior to implementation High

Marketing, Compliance

Determine which depositors of both banks will be impacted by FDIC

insurance limit. Send letter informing of 6 month grace period. high

DEPOSITS

Deposit Operations Pre Conversion What software will be used as of merger for deposit documentation Medium

Deposit Operations Pre Conversion Product Mapping / Conversion. Determine Product Changes High

Deposit Operations, Compliance

Pre Conversion

Obtain copies of all Deposit disclosures and customer

communications - i.e. excessive withdrawal letters, reg. e error

resolution letters, etc. high


Pre Conversion

Prepare Change of Terms notices to be provided to all new accounts

opened 30 days or less prior to conversion date. OR Medium

Pre Conversion

Reprogram purchased bank systems to offer acquiring bank products

and to conform with acquiring bank policies prior to conversion date.

Medium

Disclosures (DD)

Deposit Operations Pre Conversion Fee Schedules (2) High

Deposit Operations Pre Conversion Changes to disclosures - internet, tele banking, etc. Medium

Deposit Operations

Pre Conversion

Certificate of Deposit - maturity notices, will they be changing or

remaining the same

Medium

Deposit Operations

Pre Conversion

Product types, how is interest paid (collected balance, average

collected)? How are fees accessed? Medium

Deposit Operations Pre Conversion CD types and notification requirements? Medium

Deposit Operations, Compliance Pre Conversion Review / Compare Disclosures Medium

Page 1




COMPLETION

DATE

Deposit Operations, Management Pre Conversion

If purchasing failed bank, will CD interest rates remain the same? If

not, send notice to customers informing of change and providing

opportunity to withdraw funds without penalty prior to conversion. High

Reg. GG - Prohibition on Funding of Unlawful Internet Gambling

Deposit Operations, Compliance Pre Conversion Obtain Policy and Procedures

Deposit Operations, Compliance Pre Conversion Review Certification documents

Regulation CC - Funds Availability

Deposit Operations Pre Conversion Determine Funds Availability Cut Off Times High

Deposit Operations Pre Conversion Recommend statement message on cutoff times Medium

Branch Administration Pre Conversion Amend lobby signs as necessary Medium

Deposit Operations Pre Conversion

Do they have procedures in place to put extended holds? If so, who

performs? Medium

Deposit Operations

Pre Conversion

Determine if purchased bank customers receive paid checks with

periodic account statements. If acquiring bank also sends paid

checks with statements, send substitute check disclosure. medium

Regulation E- Electronic Funds Transfer

Deposit Operations

Pre Conversion

REG E- any changes to telephone banking, internet, etc - product or

access

Low

Deposit Operations

Pre Conversion

Notification requirements/disclosures (initial disclosures, account &

merchant agreements) Medium


Pre Conversion

Determine Error Resolution procedures & process (form letters used &

resolution log) Medium


Pre Conversion

Determine if OD product is offered, if yes, determine opt in procedure,

review disclosures Medium


Pre Conversion

Determine if payroll account cards are offered, if yes, determine

proceudres, review disclosures Medium


Pre Conversion

Determine if gift cards, prepaid accounts are offered, if yes determine

procedures, review disclosures Medium


Pre Conversion

Determine if combined bank will meet definition of remittance transfer

provider. If yes, implement disclosures and procedures. Medium

Reg D - Excess MMA/Savings Transactions

Deposit Operations Pre-Conversion Both banks on monthly or statement cycle? Medium

Deposit Operations Pre-Conversion Amend Reg DD disclosure if necessary Medium

Deposit Operations Pre-Conversion Send notice to affected accounts 30 days prior Medium

Deposit Operations Pre-Conversion

What types of reports are used for tracking third party checks, POS

and preauthorized transactions? Medium


What are the customer notification procedures when over limit - obtain

samples of customer notification? Medium


Does the bank have procedures in place to close or change account

type - when required? Low

Escheat

Deposit Operations Pre-Conversion Obtain procedure/process Medium

Deposit Operations Pre-Conversion Record Retention Medium

Garnishment

Deposit Operations Pre-Conversion Obtain procedure/process Medium

Pre-Conversion Record Retention Medium

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COMPLETION

DATE

Right to Financial Privacy Act

Deposit Operations Pre-Conversion Obtain Procedure/Process low

Deposit Operations Pre-Conversion Review sample of requests/request log low

Deposit Operations, Compliance Pre-Conversion


Disclosures, Fees, Signage prior to implementation Medium

LOANS

Loan Operations

Pre-Conversion

What software will be used as of merger for loan origination, loan

documentation Medium

Loan Operations Pre-Conversion Product Mapping / Conversion. Determine Product Changes High

Loan Operations

Pre-Conversion

Identify any products sold in conjuction with consumer loans, i.e. credit

life Medium

Flood Insurance

Loan Operations Pre-Conversion Duplication of vendors for determination? Low

Loan Operations Pre-Conversion Update vendor info for CD Medium

Compliance Pre-Conversion Perform a flood review of acquired entites High

Loan Operations Pre-Conversion Method used to determine the flood zone, vendor process Medium

Loan Operations Pre-Conversion Life of loan tracking process Medium

Loan Operations Pre-Conversion Force placement procedures/process Medium

Loan Operations, Compliance

Pre-Conversion

Determine if combined bank falls under small lender exemption for

escrowing flood insurance. Medium

Loan Operations

Pre-Conversion

Notify Administrator of FEMA (or all flood insurance agents used by

customers) of any change in the servicer of a loan within 60 days after

the effective date of the change. Medium

HMDA

Compliance, Loan Operations Pre-Conversion Determine HMDA Reporting System (2 systems) High

Compliance, Loan Operations Pre-Conversion Back up prior and current year HMDA data HighPre-Conversion Print current HMDA LAR prior to integration and merger Medium

Pre-Conversion

HMDA - Determine separate or combined LAR; Determine if

considered a "purchase", Change acquiring entity Respondent ID Medium

Compliance, Loan Operations Pre-Conversion

Obtain Principal Balance at Acqusition, List of Loans Acquired (Failed

Banks) for HMDA LAR Purchase Coding High

Compliance Calendar Year Perform a data validation of acquiring entity HMDA-LAR Medium

Compliance Pre-Conversion Perform a data scrub of all "Purchased Loans" Medium

Compliance Pre-Conversion Identify HMDA Staffing for Data Scrubs, Data Validations Medium

CRA Officer, Branch Administration Pre-Conversion Update HMDA lobby notices Low

Loan Operations, Compliance Pre-Conversion

Does the Bank have a home improvement product (classified on call

report)? Low

Loan Operations, Compliance Pre-Conversion

Does the Bank have written procedures to explain the HMDA reporting

process? Low

Loan Operations, Compliance Pre-Conversion Retention of records and loan files Medium

Loan Operations, Compliance Pre-Conversion Does the Bank report Home Equity Lines of Credit? Low

Reg O / Insider Lending

REG O Officer Pre-Conversion Reg O Insider Lending (additions, reporting) high

REG O Officer Pre-Conversion Affiliate officers now meet definition of EO per Reg O? high

REG O Officer Pre-Conversion Ownership of reporting requirements high

REG O Officer Pre-Conversion Obtain updated list of Exec Officers and Board members high

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COMPLETION

DATE

REG O Officer Day 1 - 30 Obtain copy of policies for: Reg. O., Employee loans and Overdrafts high

REG O Officer Pre-Conversion List of insiders and correspondents high

REG O Officer Pre-Conversion Copy of their call provision Low

REG O Officer Pre-Conversion Statement of Interest Review Low

REG O Officer Pre-Conversion List of outstandings as of acquisition date Low

REG O Officer

Pre-Conversion

FFIEC survey form (or other form used to ascertain executive officer

indebtedness to correspondents) Medium

Loan Documentation

Loan Operations/Administration Pre-Conversion Update affiliated business arrangements disclosure Low

Loan Operations/Administration Pre-Conversion HELOC 15 year examples updated Low

ECOALoan Operations/Administration Pre-Conversion Centrallize loan denials / withdrawals for record retention purposes LowLoan Operations/Administration Pre-Conversion Determine whether a 2nd review process is in place High

Loan Operations/Administration Pre-Conversion

Loan products, description and underwriting guidelines, does the bank

use credit scoring? Medium

Loan Operations/Administration Pre-Conversion Procedures to comply with the regulation Low

Loan Operations/Administration Pre-Conversion Copy of adverse action notices, applications, etc Medium

Loan Operations/Administration Pre-Conversion Notice of right to copy of appraisal Medium

Loan Operations/Administration Pre-Conversion Retention requirements Medium

RESPA

Loan Operations/Administration Pre-Conversion Distribution of Affiliated Business Arrangement form to BB offices mediumLoan Operations/Administration Pre-Conversion Develop revised Affiliated Business Arrangement Notice LowLoan Operations/Administration Pre-Conversion Procedures, forms & notification, evidence of compliance Low


Transfer of Servicing – notification requirement that servicing of the

loan will be transferred medium

Loan Operations/Administration Pre-Conversion Initial and annual escrow statements High

Loan Operations/Administration Pre-Conversion List of settlement service providers medium

Loan Operations/Administration Pre-Conversion List of any affiliated business arrangements (legal, title, appraiser) High

TILA

Loans, Compliance

Pre-Conversion

Determine whether any allowable change in terms will occur (fees,

terms, rates)

High

Loan Operations/Administration Pre-Conversion Provide Change in Terms Notice High

Compliance Pre-Conversion

Perform APR/Finance Charge Sampling of Consumer and/or

Mortgage Loans (bank may be subject to restitution) High


List of all types of consumer credit offered and the terms applicable to

each, including fees. Medium

Compliance Pre-Conversion Identify tools used to calculate the annual percentage rate disclosures Low


Identify any recent loans where the consumer waived the right to

rescind Low

Loans, Compliance Pre-Conversion

Obtain a copy of initial disclosure statements for open-end loan

products, including home equity lines of credit Medium

Loans, Compliance Pre-Conversion Obtain copy of all loan documents and disclosures Medium

Loans, Compliance Pre-Conversion


Disclosures, Fees, Signage prior to implementation High

UDAAP

Loan Operations/Administration Pre-Conversion Cosigner liability notification process Low

Page 4




COMPLETION

DATE


Determine Complaint Management process/policy. Review any

outstanding complaints. Medium

Safe Act

Human Resources, Compliance Pre-Conversion Obtain list of all Mortgage Loan Originators High

Human Resources, Compliance Pre-Conversion

Transfer MLO registration to acquiring bank within 60 days of date of

merger. High

Human Resources, Compliance Pre-Conversion Update acquiring bank MLO list. Medium

Military Lending Act and SCRA

Loans, Compliance Pre-Conversion Obtain list of all military customers of acquired bank. Medium

Loans, Compliance Pre-Conversion Obtain policy and procedures for complying with MLA and SCRA Medium

Loans, Compliance Pre-Conversion Review sample of Military Customer's accounts for compliance Medium

Consumer Leasing

Loans Pre-Conversion Consumer lease disclosures for each type of lease – if applicable Low

Dealer Loans

Loans Pre-Conversion Obtain list of dealers and dealer contracts Medium

Loans Pre-Conversion Review contracts Medium

Loans Pre-Conversion Review policies and procedures Medium

Fair Debt Collection Practices Act

Special Assets Pre-Conversion Determine whether debt collection is conducted via third party Medium

Special Assets Day 1 - 30 Obtain Policy, Process & procedures, if applicable Medium

Credit Cards

Loans Pre-Conversion Obtain credit card disclosures and applications Medium

Loans Pre-Conversion Review Policies and Procedures Medium

OVERDRAFT PROTECTION PROGRAMS


Overdraft Program Mapping / Conversion. Determine Product

Changes Medium

Deposit Operations Pre-Conversion Overdraft Medium

Deposit Operations Pre-Conversion Bounce Protection Medium

NON-DEPOSIT INVESTMENT PRODUCTS

Compliance, Operations Pre-conversion Determine if employee or joint employee of bank sells these products.

Compliance, Operations Pre-conversion Obtain copy of marketing agreement.

Compliance, Operations Pre-conversion Review Disclosures and signage.

Compliance, Operations Pre-conversion Obtain list of all products sold.

AFFILIATED COMPANY

Compliance, Operations Pre-conversion

Is there an affiliated business, i.e investment company, insurance

company, mortgage company?

Compliance, Operations Pre-conversion Review policy/procedures/disclosures for each.

BSA/AML/OFAC

Page 5




COMPLETION

DATE

BSA OFFICER

Day 1 - 30

Obtain BSA / AML / OFAC / CIP Policies of acquiring Bank -

Compare to existing Bank - Utilize Policy Checklist to identify

gaps high

BSA OFFICER Day 1 - 30 Obtain prior Examination, Audits, and Independent Testing Reports high

BSA OFFICER Pre-Conversion What software will be used as of merger for BSA Documentation medium

BSA OFFICER Pre-Conversion OFAC methods - data scrubs, account opening, etc. low

BSA OFFICER Pre-Conversion Determine OFAC software low

BSA OFFICER Pre-Conversion CIP Standards - match? low

BSA OFFICER Pre-Conversion High Risk Customer list medium

BSA OFFICER Pre-Conversion Exemption List medium

BSA OFFICER Pre-Conversion SAR filing responsibility high

BSA OFFICER Pre-Conversion Account Closing Responsibility medium

BSA OFFICER Pre-Conversion Combined risk assessment high

BSA OFFICER Pre-Conversion CIP standards- high risk entities medium

BSA OFFICER Pre-Conversion Determine documentary verification high

BSA OFFICER

Pre-Conversion

Prepare list of reports currently used by acquriring entity for AML/ BSA

function and compare to existing reports and disbursement of reports

high

BSA OFFICER Pre-Conversion Compare and Determine CIP Matrices medium

FCRA / IDENTITY THEFT / ADDRESS DISCREPANCIES

Loan, Compliance Pre-Conversion Procedures to report to credit reporting agencies Medium

Loan, Compliance Pre-Conversion Procedures to correct inaccurate information Medium

Identity Theft Officer Day 1 - 30

Identity Theft - Update Identity Theft Risk Assessment (Products),

Procedures High

Identity Theft Officer Pre-Conversion Obtain ID Theft Procedures / Address Discrepancy Procedures Medium

Identity Theft Officer

Information Security highPre-Conversion Two separate bank sytems until when Medium

IT Officer Pre-Conversion Information Security/ Privacy High

IT Officer

PRIVACY / CUSTOMER INFO

Privacy Officer Pre-Conversion Determine any changes in affiliates medium

Privacy Officer

Pre-Conversion

Update privacy notice to include all affiliates and have one corp

privacy notice, including a proposed opt out

medium

Privacy Officer Pre-Conversion Update Board-approved privacy policy High

Privacy Officer

Pre-Conversion

What is the procedure? Do they share information? Obtain copy of

privacy notice. High

Privacy Officer Pre-Conversion

Are there procedures in place to comply with the notification

requirements? medium

Privacy Officer Pre-Conversion

Is there an opt out list maintained? If yes, provide copy of list.

How/who maintains the database, and what is the process? High

Privacy Officer Pre-Conversion Determine Annual Mailing Date medium

CRA High

CRA Officer Pre-Conversion Determine CRA Reporting System (2 systems) Low

CRA Officer Pre-Conversion Print current CRA LAR prior to integration and merger Medium

CRA Officer Pre-Conversion Back up prior and current year CRA data High

CRA Officer Pre-Conversion Analyze CRA Assessment Area High

CRA Officer Pre-Conversion Combined public file Medium

CRA Officer, Branch Administration Pre-Conversion Update CRA lobby notices Medium

Page 6




COMPLETION

DATE

CRA Officer, Management Pre-Conversion Identify Branch Closings, Obtain FDIC Insurance Certificate High

Pre-Conversion Obtain Board Approval of any Revised Assessment Areas High

CRA Officer Pre-Conversion Perform Combined Bank Loan Portfolio Analysis Medium

CRA Officer Pre-Conversion Obtain CRA Performance Evaluation (Regulators Website) High

CRA Officer Day 1 - 30 Get copy of their CRA Policy High

CRA Officer

Pre-Conversion

Is there an appointed CRA Officer/Manager? Community

Development Officer? Medium

CRA Officer

Pre-Conversion

Determine organizational structure of CRA (report to Compliance?;

Lending?) Medium

CRA Officer Pre-Conversion Determine CRA Plans & Goals

CRA Officer Pre-Conversion Their CRA Programs Low

CRA Officer Pre-Conversion Products & Services Low

CRA Officer Pre-Conversion CRA Brochure Low

CRA Officer Pre-Conversion CRA qualified Investment Loans Low

CRA Officer Pre-Conversion CRA-LAR & CDL since last examination Low

CRA Officer Pre-Conversion Any consortium relationship? Low

CRA Officer

Pre-Conversion

Specific affiliations and partnerships; summary of each partnership

agreements; timeframe for each agreement; Low

CRA Officer Pre-Conversion Determine Community Development Loans Low

CRA Officer Pre-Conversion Role and expectation of all personnel; Low

CRA Officer Pre-Conversion Community group affiliations; listing of outreach partners; Low

CRA Officer

Pre-Conversion Determine any past advertising targeted at low & moderate population; Low

CRA Officer Pre-Conversion CRA Committee

CRA Officer Pre-Conversion Purpose of committee Low

CRA Officer Pre-Conversion Review copy of minutes meetings since last examination Low

CRA Officer Pre-Conversion Outreach Programs;

CRA Officer Pre-Conversion Who coordinates participation Low

CRA Officer Pre-Conversion Past seminars and workshops (hosted/participated/attended) Low

CRA Officer

Pre-Conversion Results of this participation; (where held; when; number of attendees) Low

CRA Officer Pre-Conversion Public Files

CRA Officer Pre-Conversion Review copy of public file; Low

CRA Officer Pre-Conversion Any request by public to view public file; Low

CRA Officer Pre-Conversion Location of main and regional files; Low

CRA Officer Pre-Conversion Assessment Areas (maps, listing); Low

CRA Officer Pre-Conversion Branch and Service Directory Low

CRA Officer Pre-Conversion CRA (Internal) Training Module/Program

CRA Officer Pre-Conversion Copy of CRA training material and attendance record Low

CRA Officer Pre-Conversion Determine the extent of Reg. BB training; Low

CRA Officer Pre-Conversion How far along? Low

CRA Officer Pre-Conversion What is needed? Low

CRA Officer Pre-Conversion What training tools and methods are being used (Worknowledge?) Low

MARKETING / E BANKING

Marketing Pre-Conversion Will there be two internet sites as of merger date Medium

Marketing Pre-Conversion Identify any Social Media Sites to change Medium

E-Banking Pre-Conversion Determine internet site collapse date / e-banking impact Medium

Compliance Program Evaluation

Compliance Officer Day 1 - 30

Obtain Policies of acquiring Bank - Compare to existing Bank -

Utilize Policy Checklist to identify gaps High

Page 7




COMPLETION

DATE

Compliance Officer Day 1 - 30 Loan Policy High

Compliance Officer Day 1 - 30 Compliance Policy High

Compliance Officer Day 1 - 30 Fair Lending Policy High

CRA Officer Day 1 - 30 CRA Policy High

Compliance Officer Day 1 - 30 Branch Closing Policy High

Compliance Officer Day 1 - 30 Reg O Policy High

Compliance Officer Day 1 - 30 Privacy Policy High

Compliance Officer Day 1 - 30 Regulation Specific Policies or Compliance Manuals Medium

Compliance Officer Day 1 - 30

Obtain prior Compliance Examination, Compliance Audits,

Compliance Monitoring/Testing Reports High

Compliance Officer Pre-Conversion Obtain Consumer Complaint Log / Records for the past 2 years Medium

Compliance Officer Pre-Conversion Coordinate Compliance Testing of Acquired Entity High

Compliance Officer Pre-Conversion Determine if disclosures are delivered electronically Medium

Compliance Officer Pre-Conversion Review Esign practices, procedures, agreements Medium

Compliance Officer Pre-Conversion Determine method of compliance training and obtain training records Medium

Compliance Officer post -conversion update combined bank risk assessment high

TRAINING (Merger Related)

Compliance Officer Pre-Conversion What vendor is used for training ( if any)?

Compliance Officer Pre-Conversion Obtain all training records

BSA Officer Pre-Conversion BSA, AML, CIP, SAR medium

Privacy Officer Pre-Conversion Privacy mediumIdentity Theft Officer Pre-Conversion Identity Theft mediumCompliance Officer, Loans Pre-Conversion Loan Compliance (HMDA, CRA, ECOA) mediumCompliance Officer, Deposit Operations Pre-Conversion Deposit Compliance (Reg E, Reg CC, Reg D, Reg DD) mediumInformation Security Officer Pre-Conversion Information Security, Security, Clean Desk Policy mediumCompliance Officer Pre-Conversion Reg O Training - Board and & Senior Management (if changes) mediumSecurity Officer Pre-Conversion Record Retention Policy medium

Page 8

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