Compliance & Regulatory Framework
Monetrek Bank operates under comprehensive regulatory oversight, maintaining the highest standards of compliance, security, and transparency to protect our customers and ensure the integrity of the financial system. Our commitment to regulatory excellence spans federal, state, and international frameworks.
Executive Summary
Monetrek Bank is a federally chartered financial institution committed to maintaining the highest standards of regulatory compliance, operational integrity, and customer protection. Our comprehensive compliance program encompasses federal banking regulations, consumer protection laws, anti-money laundering requirements, data privacy standards, and international regulatory frameworks.
As a FDIC-insured institution, we operate under the direct supervision of federal banking regulators including the Office of the Comptroller of the Currency (OCC), the Federal Reserve System, and the Consumer Financial Protection Bureau (CFPB). Our compliance framework is designed to exceed regulatory minimums and industry best practices.
This document outlines our regulatory framework, compliance procedures, risk management protocols, and ongoing commitment to transparency and accountability in all aspects of our operations.
Regulatory Authorities & Oversight
OCC
Office of the Comptroller of the Currency
Primary federal regulator overseeing our charter, capital adequacy, risk management, and overall safety and soundness.
FDIC
Federal Deposit Insurance Corporation
Provides deposit insurance up to $250,000 per depositor and conducts regular examinations of our financial condition and compliance programs.
CFPB
Consumer Financial Protection Bureau
Regulates consumer financial products and services, ensuring fair treatment and transparency in all customer interactions.
FinCEN
Financial Crimes Enforcement Network
Oversees our anti-money laundering (AML) and Bank Secrecy Act (BSA) compliance programs and suspicious activity reporting.
OFAC
Office of Foreign Assets Control
Administers economic sanctions programs requiring us to screen transactions against prohibited persons and entities lists.
Federal Reserve
Board of Governors
Supervises our holding company structure, capital planning, stress testing, and systemically important financial institution requirements.
Core Compliance Programs
Bank Secrecy Act / Anti-Money Laundering Program
Program Components
- Customer Identification Program (CIP) with enhanced due diligence procedures
- Suspicious Activity Monitoring using advanced AI-powered transaction analysis
- Currency Transaction Reporting (CTR) for transactions over $10,000
- OFAC sanctions screening for all customers and transactions
- Beneficial ownership identification for legal entity customers
Risk Assessment Framework
Customer Risk Factors
Geographic location, business type, transaction patterns, and politically exposed person (PEP) status
Product Risk Assessment
Account types, payment methods, international transfers, and cash-intensive services
Geographic Risk Analysis
High-risk jurisdictions, sanctions programs, and correspondent banking relationships
Consumer Protection & Fair Lending
Fair Lending Laws
- • Equal Credit Opportunity Act (ECOA)
- • Fair Housing Act (FHA)
- • Home Mortgage Disclosure Act (HMDA)
- • Community Reinvestment Act (CRA)
- • Fair Credit Reporting Act (FCRA)
Consumer Disclosure Requirements
- • Truth in Lending Act (TILA)
- • Truth in Savings Act (TISA)
- • Electronic Fund Transfer Act (EFTA)
- • Fair Debt Collection Practices Act
- • Telephone Consumer Protection Act
Privacy & Data Protection
- • Gramm-Leach-Bliley Act (GLBA)
- • Right to Financial Privacy Act
- • California Consumer Privacy Act (CCPA)
- • General Data Protection Regulation (GDPR)
- • New York SHIELD Act
Cybersecurity & Information Security Framework
Regulatory Standards
FFIEC Cybersecurity Assessment Tool
Comprehensive cybersecurity maturity assessment across five domains
NIST Cybersecurity Framework
Identify, Protect, Detect, Respond, and Recover framework implementation
New York State DFS Part 500
Cybersecurity requirements for financial services companies
Security Controls
Risk Management & Corporate Governance
Enterprise Risk Management
Risk Categories
- • Credit Risk - Loan portfolio management and underwriting standards
- • Market Risk - Interest rate, foreign exchange, and commodity exposure
- • Operational Risk - Process failures, fraud, and business disruption
- • Liquidity Risk - Funding and cash flow management
- • Compliance Risk - Regulatory violations and penalties
- • Reputation Risk - Public perception and brand protection
- • Strategic Risk - Business model and competitive positioning
- • Technology Risk - Cybersecurity and system reliability
Risk Assessment Process
Quarterly risk assessments using quantitative modeling, stress testing, and scenario analysis to identify, measure, monitor, and control risk exposures across all business lines.
Board Governance Structure
Board Committees
- • Audit Committee - Financial reporting and internal controls oversight
- • Risk Committee - Enterprise risk management and appetite
- • Compensation Committee - Executive and incentive compensation
- • Nominating Committee - Board composition and succession planning
- • Technology Committee - Digital strategy and cybersecurity
Independence Standards
75% independent directors with expertise in banking, technology, risk management, and regulatory affairs. Annual board effectiveness assessments and continuing education programs.
Three Lines of Defense Model
Business Line Management
Front-line risk identification, assessment, and mitigation. Daily risk management and control activities embedded in business processes.
Risk & Compliance Functions
Independent oversight, policy development, and monitoring. Risk appetite framework and compliance program management.
Internal Audit
Independent assurance and advisory services. Evaluation of risk management effectiveness and control environment adequacy.
Audit & Examination Program
Regulatory Examinations
Safety & Soundness Examinations
Annual comprehensive reviews by OCC examiners covering capital adequacy, asset quality, management, earnings, liquidity, and sensitivity to market risk (CAMELS rating system)
Consumer Compliance Examinations
Biannual reviews of consumer protection laws, fair lending practices, and CRA compliance by CFPB and OCC examination teams
BSA/AML Examinations
Regular assessments of anti-money laundering program effectiveness, suspicious activity monitoring, and sanctions compliance
Information Technology Examinations
Cybersecurity, operational resilience, and technology risk management assessments following FFIEC guidelines
Internal Audit Program
Audit Charter & Independence
Board-approved charter ensuring independence, objectivity, and unrestricted access to all business areas, records, and personnel
Risk-Based Audit Plan
Annual audit plan based on comprehensive risk assessment, regulatory guidance, and emerging threats across all business lines
Audit Frequency & Scope
- • High-risk areas: Quarterly reviews
- • Medium-risk areas: Semi-annual reviews
- • Low-risk areas: Annual reviews
- • Special investigations: As needed
External Audit Coordination
Annual financial statement audits by Big Four accounting firm with quarterly reviews and SOC reporting
Recent Examination Results
Regulatory Reporting & Disclosure Requirements
Federal Banking Reports
Call Reports (FFIEC 031/041)
Quarterly financial condition and income statements
Filed within 30 days of quarter-end
Thrift Financial Reports (TFR)
Detailed balance sheet and income statement data
Quarterly submission to OCC
Community Reinvestment Act (CRA)
Annual lending data and community development activities
Public performance evaluation available
BSA/AML Reporting
Suspicious Activity Reports (SARs)
Filed within 30 days of suspicious activity detection
Average 150-200 SARs filed annually
Currency Transaction Reports (CTRs)
All cash transactions over $10,000
Daily electronic filing to FinCEN
OFAC Sanctions Screening
Real-time screening against prohibited persons lists
Immediate blocking and reporting procedures
Consumer Protection Reports
Home Mortgage Disclosure Act (HMDA)
Annual loan application register and disclosure
Public data available by March 31
Consumer Complaints
Quarterly complaint data submission to CFPB
Response time averaging 3 business days
Fair Lending Monitoring
Statistical analysis for discriminatory lending patterns
Monthly fair lending reports to board
Capital & Liquidity Reporting
Capital Adequacy
Liquidity Coverage
Stress Testing & Scenario Analysis
Dodd-Frank Annual Stress Test submission demonstrating capital adequacy under severely adverse economic scenarios
Comprehensive Capital Analysis and Review ensuring robust capital planning and risk management processes
Quarterly internal stress testing covering credit, market, operational, and liquidity risk scenarios
Compliance Training & Culture
Employee Training Program
New Employee Orientation
40-hour comprehensive compliance training covering all regulatory requirements, policies, and procedures within first 30 days of employment
Annual Recertification
Mandatory annual training updates covering regulatory changes, emerging risks, and best practices with testing and certification requirements
Role-Specific Training
Specialized training for BSA officers, loan officers, customer service representatives, and management based on specific job responsibilities
Continuing Education
Quarterly regulatory updates, industry conference attendance, and professional certification support for compliance professionals
Compliance Culture Metrics
Code of Conduct & Ethics
Integrity
Commitment to honest, ethical conduct in all business relationships and regulatory interactions
Accountability
Personal responsibility for compliance with all applicable laws, regulations, and internal policies
Respect
Fair treatment of customers, colleagues, and stakeholders regardless of background or circumstances
Excellence
Continuous improvement in compliance practices and exceeding regulatory expectations
Emerging Risks & Future Compliance Initiatives
Technology & Digital Risks
Artificial Intelligence Governance
Model risk management framework for AI/ML applications in credit decisions, fraud detection, and customer service
Cloud Security Compliance
Multi-cloud governance framework ensuring data sovereignty, encryption standards, and vendor management
Digital Identity Verification
Enhanced KYC procedures for digital onboarding including biometric authentication and document verification
Quantum Computing Preparedness
Post-quantum cryptography migration planning and quantum-resistant security protocols
Regulatory Evolution
Climate Risk Management
ESG risk assessment integration and climate stress testing as emerging regulatory requirements
Operational Resilience
Business continuity planning, third-party risk management, and critical service recovery capabilities
Open Banking Standards
API security standards, customer consent management, and data sharing protocol compliance
Digital Asset Regulation
Cryptocurrency custody services, stablecoin reserves, and central bank digital currency (CBDC) readiness
2024-2025 Compliance Roadmap
Basel IV Implementation
Capital requirements and risk-weighted assets calculation updates
FIDO2 Authentication
Passwordless authentication and enhanced customer security
Climate Risk Integration
ESG scoring and climate scenario stress testing
AI Governance Framework
Model interpretability and algorithmic bias testing