Compliance champions

All smiles—Nekoosa Port Edwards State Bank’s compliance committee members participate in a compliance training session led by president Robb Sigler. (l-r) Patty Heeg, Mert Scheffler, Alex Marriott, Don Minarcin, Sandi Walker, Megan Grossklaus, Robb Sigler, Mary Frick and Jay Grode.

Nekoosa Port Edwards State Bank is setting the bar for compliance among community banks. Here’s a look at how and why it does it, and the unexpected benefits of making compliance a core part of its company culture.

By Andrea Lahouze

any community banks see regulation as something done to you—a burden of restrictions with which you must comply.
So what happens when a bank chooses to embrace and become an expert in those regulations instead?

Robb Sigler, president of Nekoosa Port Edwards State Bank in Nekoosa, Wis., can tell you. Sigler has worked for the $218 million-asset community bank for 30 years and has been president since 1995, when he took the helm after his father, LeRoy W. Sigler, retired.

The bank’s commitment to create a culture of compliance throughout the entire bank began after an overzealous examiner had excesssive criticisms. Since then, the bank has documented every compliance interaction, which had been done in the past, but not memorialized.

“It was no longer sufficient to check a box. Compliance had to be understood throughout the bank,” says Mary Frick, who serves as one of the community bank’s assistant vice presidents and is also a certified community bank internal auditor.

Management began by developing three compliance committees, addressing loans, deposits and IT. Each committee holds weekly meetings with employee representation from every department in the bank. Meeting information is then distributed to each of Nekoosa Port Edwards State Bank’s 33 employees. For key compliance regulations, the bank’s compliance officer holds quarterly training sessions using ICBA’s Community Banker University offering for its employees and board members.

From these meetings, the bank also maintains an Excel matrix of information that serves as an ongoing “playbook” for answers to compliance conundrums staff members have faced. The searchable matrix allows employees to see topics and case studies that have been discussed in reference to each congressional act.

Sigler says it’s the bank’s response to how hard it can be to get clear answers to compliance questions, even by the regulators themselves, who have occasionally advised him to hire an attorney in order to reach a conclusion.

“Everybody in the world who gives us information is afraid to come to a conclusion,” Sigler explains. “What this has done for us is it’s documented that we really care, we really wrestled with it, we called the ICBA, we called our attorneys, and this is the conclusion we came up with.”

Time consuming? Yes, but certainly better than a penalty or other punitive regulatory actions, Sigler estimates. Dedicated weekly meetings are also less disruptive to the bank’s operations than a sudden need to respond to an audit.

Wider benefits
From these meetings and resulting playbook has also grown a culture of empowerment, where all employees have the resources to find the compliance answers they seek, instead of a just a few key people.

“Employees are eager to enhance their knowledge and really research compliance topics that impact their area so they have a true understanding of why we are subject to various regulations,” Sigler says. He adds that this understanding also helps staff provide clear and definitive answers to customers when compliance questions do arise.

“For a rural bank, dishonesty is the kiss of death. So your integrity is not based on regulatory FDIC compliance. Your ability to survive in the environment is predicated on your integrity right from the start.”
—Robb Sigler, Nekoosa Port Edwards State Bank

The bank’s focus on compliance has even had a surprising team-building effect on its employees. “To tell you the truth, I hate [compliance],” Sigler admits. “But it’s brought us all together. Employees can now see what the other parts of the bank are going through, where bottlenecks start, so it’s really opened up great communication bank-wide. It’s just brought us a lot closer, with a lot more respect for each individual in the bank.”

In the end, Sigler still considers his true accountability-holders to be his customers and neighbors—not the regulatory environment. “We all have to have high integrity, because customers are our next-door neighbors and the people we sit next to in church,” he says. “For a rural bank, dishonesty is the kiss of death. So your integrity is not based on regulatory FDIC compliance. Your ability to survive in the environment is predicated on your integrity right from the start.”

Andrea Lahouze
is deputy editor of Independent Banker.