Law is a system that can give a person rights, restrictions, and forbid a person from many different acts. Laws are to protect communities in many different forms. It was designed to protect our rights as Americans. It is also set to protect people as consumers and business owners alike. Although, many people refer to law as a restriction it is also a protection for many people. The most known way law is a protection is for consumers and business owners. It protects consumers from false advertising, which protects the health or well-being of a consumer. It protects business owners in some situations by allowing business owners to own their business separate from their personal finances. I am currently employed with Southwest Securities, FSB. Southwest Securities is a full service bank and investment firm. Over the most recent years banking has been under the gun for many changes in the law and also regulations for protection of consumers and banks around the country.
Currently my bank is operating under a cease-and-desist order that is allowing us to make changes on our policies to better the company. Southwest Securities FSB, as mentioned is a full service bank for customers. There are many regulations to follow in banking. Regulation E protects the bank and consumer on electronic funds transfers which includes ATM, debit cards, bill payment, and online banking transfers. Any transaction that is considered “electronic” and requires no paper is covered by this regulation. When a customer comes in to open an account they are given a disclosure that covers this regulation and outlines the companies policies for this regulation.
The most common regulation that is used the most is regulation CC. This regulation is known as the funds availability policy. This policy protects our banking customers and our bank. This allows the bank to place a hold on a check that is a large amount, a check that is forged, or a check we believe is no good for any reason. This policy protects the consumer from immediately using funds on a check that may bounce or be returned. This also protects the bank from having to pay for an overdraft on a customer’s account. If the bank doesn’t place a hold on the account then the bank may end up covering the costs to put the customer’s account back in the positive. The cease-and- desist order that was put on our bank is an order that was issued from the Federal Deposit Insurance Corporation (FDIC).
We were placed under this cease-and-desist order because we had many loans that were not being paid off and the bank was taking a large loss on these loans. The FDIC ordered our bank to follow certain rules and meet certain requirements for them to “lift” the order. One of the many changes the bank made was we changed our Board of Directors. The new Board of Directors has changed many policies and has worked closely to meet regulators requests. We have part of the order lifted already but we are restricted on the types of loans that we can originate at this time.
With continued efforts, improvements on policies and ensuring we are following all banking laws closely the bank will be able to lend money again in the near future. These regulations listed above are just the beginning of laws that apply to banking but they are the ones that are referred to daily in my job duties. The law is not used just to protect businesses and consumers. It is also used to protect us as citizens. For instance, a person who feels they were wronged by another person or has a debt due to them from someone else may file in civil court.