January 23, 2017 8:00 am

By Cody Roberts, CRCM

If you look at enforcement actions, you will see topics noted like BSA/AML, real estate lending and flood, capital adequacy, loan quality, UDAAP, and cybersecurity. The Bank Bribery Act will likely not be seen in such actions.  But this law is still in effect—and relevant.

What is the Bank Bribery Act?

The Bank Bribery Act, 18 USC 215, has been amended several times, including substantial revisions in 1984 and 1985. Included in the law is a requirement that the federal banking supervisory agencies issue guidelines for their respective institutions. The guidelines are substantially the same across the agencies and are intended to assist employees, officers, directors, agents and attorneys of institutions in complying with the law.

The Bank Bribery Act, 18 USC 215, as summarized:

  • States that it is illegal for anyone to corruptly give, offer, or promise anything of value to any person, with intent to influence or reward an officer, director, employee, agent, or attorney of a financial institution in connection with any business or transaction of such institution.
  • States that it is illegal for an officer, director, employee, agent, or attorney of a financial institution, to corruptly solicit or demand for the benefit of any person, or corruptly accept or agree to accept, anything of value from any person, intending to be influenced or rewarded in connection with any business or transaction of such institution.
  • Sets out fines and prison sentences for violating the law.
  • Clarifies that the law does not apply to bona fide salary, wages, fees, or other compensation paid, or expenses paid or reimbursed, in the usual course of business.

Guidelines for Compliance with the Federal Bank Bribery Law

Unlike the Pirate’s Code, which is more what you’d call “guidelines” than actual rules, the Guidelines for Compliance with the Federal Bank Bribery Law are more like actual rules.

The Guidelines, as summarized, “encourage” financial institutions to:

  • Adopt internal codes of conduct or written policies, to include:
    • Provisions that explain the general prohibitions of the bank bribery law;
    • Prohibitions against any institution official (1) soliciting for themselves or for a third party (other than the institution itself) anything of value from anyone in return for any business, service or confidential information of the institution and (2) accepting anything of value (other than bona fide salary, wages and fees referred to in 18 U.S.C. 215(c)) from anyone in connection with the business of the institution, either before or after a transaction is discussed or consummated;
    • A process designed to alert institution officials about the bank bribery statute, as well as to establish and enforce written policies on acceptable business practices;
    • Appropriate exceptions, as specified in the Guidelines, to the general prohibition of accepting something of value in connection with institution business;
    • A case-by-case approval process for other circumstances in which an institution official accepts something of value in connection with institution business, provided that such approval is made in writing on the basis of a full written disclosure of all relevant facts and is consistent with the bank bribery statute;
    • A requirement that an institution official disclose to an appropriately designated official of the institution any offer or receipt of something of value from a customer beyond what is authorized in the institution’s code of conduct or written policy, and the institution keeps contemporaneous written reports of such disclosures;
    • Management review of the disclosures to determine that what is accepted is reasonable and does not pose a threat to the integrity of the institution;
    • A prohibition against institution officials self-dealing or otherwise trading on their positions with the institution or accepting from one doing or seeking to do business with the institution a business opportunity not available to other persons or that is made available because of such official’s position with the institution; and
    • A requirement that institution officials disclose all potential conflicts of interest, including those in which they have been inadvertently placed due to either business or personal relationships with customers, suppliers, business associates, or competitors of the institution
  • Maintain a copy of any code of conduct or written policy it establishes for its institution officials, including any modifications; and
  • Require from institution officials a written acknowledgement of, and agreement to comply with, the code or policy, initially and upon any subsequent material change to the code or policy.

Are you in compliance with the Bank Bribery Act and the Guidelines? American Bank System’s CompliancePro can help you evaluate your institution’s compliance – call us at 800-522-4990 for a free demonstration.