Regions Bank 2009 Annual Report Download - page 31

regulated activities. This supervision generally includes the licensing of insurance brokers and agents and the
regulation of the handling of customer funds held in a fiduciary capacity. Certain of Regions’ insurance company
subsidiaries are subject to extensive regulatory supervision and to insurance laws and regulations requiring,
among other things, maintenance of capital, record keeping, reporting and examinations.
Financial Privacy. The federal banking regulators have adopted rules that limit the ability of banks and
other financial institutions to disclose non-public information about consumers to non-affiliated third parties.
These limitations require disclosure of privacy policies to consumers and, in some circumstances, allow
consumers to prevent disclosure of certain personal information to a non-affiliated third party. These regulations
affect how consumer information is transmitted through diversified financial companies and conveyed to outside
vendors. In addition, consumers may also prevent disclosure of certain information among affiliated companies
that is assembled or used to determine eligibility for a product or service, such as that shown on consumer credit
reports and asset and income information from applications. Consumers also have the option to direct banks and
other financial institutions not to share information about transactions and experiences with affiliated companies
for the purpose of marketing products or services.
Community Reinvestment Act. Regions Bank is subject to the provisions of the CRA. Under the terms of
the CRA, Regions Bank has a continuing and affirmative obligation consistent with safe and sound operation to
help meet the credit needs of its communities, including providing credit to individuals residing in low- and
moderate-income neighborhoods. The CRA does not establish specific lending requirements or programs for
financial institutions nor does it limit an institution’s discretion to develop the types of products and services that
it believes are best suited to its particular community, consistent with the CRA. The CRA requires each
appropriate federal bank regulatory agency, in connection with its examination of a depository institution, to
assess such institution’s record in assessing and meeting the credit needs of the community served by that
institution, including low- and moderate-income neighborhoods. The regulatory agency’s assessment of the
institution’s record is made available to the public. The assessment also is part of the Federal Reserve’s
consideration of applications to acquire, merge or consolidate with another banking institution or its holding
company, to establish a new branch office that will accept deposits or to relocate an office. In the case of a bank
holding company applying for approval to acquire a bank or other bank holding company, the Federal Reserve
will assess the records of each subsidiary depository institution of the applicant bank holding company, and such
records may be the basis for denying the application. Regions Bank received a “satisfactory” CRA rating in its
most recent examination.
USA PATRIOT Act. A major focus of governmental policy relating to financial institutions in recent years
has been aimed at combating money laundering and terrorist financing. The USA PATRIOT Act of 2001 (the
“USA PATRIOT Act”) broadened the application of anti-money laundering regulations to apply to additional
types of financial institutions such as broker-dealers, investment advisors and insurance companies, and
strengthened the ability of the U.S. Government to help prevent, detect and prosecute international money
laundering and the financing of terrorism. The principal provisions of Title III of the USA PATRIOT Act require
that regulated financial institutions, including state member banks: (i) establish an anti-money laundering
program that includes training and audit components; (ii) comply with regulations regarding the verification of
the identity of any person seeking to open an account; (iii) take additional required precautions with non-U.S.
owned accounts; and (iv) perform certain verification and certification of money laundering risk for their foreign
correspondent banking relationships. Failure of a financial institution to comply with the USA PATRIOT Act’s
requirements could have serious legal and reputational consequences for the institution. Regions’ banking,
broker-dealer and insurance subsidiaries have augmented their systems and procedures to meet the requirements
of these regulations and will continue to revise and update their policies, procedures and controls to reflect
changes required by the USA PATRIOT Act and implementing regulations.
Office of Foreign Assets Control Regulation. The United States has imposed economic sanctions that
affect transactions with designated foreign countries, nationals and others. These are typically known as the
“OFAC” rules based on their administration by the U.S. Treasury Department Office of Foreign Assets Control
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