Regions Bank 2011 Annual Report Download - page 44

(ii) prohibits incentive-based compensation arrangements for executive officers, employees, directors or principal
shareholders that could lead to a material financial loss for the institution. The proposed rule requires covered
institutions to establish policies and procedures for monitoring and evaluating their compensation practices.
Institutions with consolidated assets of $50 billion or more, such as Regions, are subject to additional restrictions
on compensation arrangements for their executive officers and any other persons indentified by the institution’s
board of directors as having the ability to expose the institution to substantial losses. The comment period ended
on May 31, 2011. These regulations may become effective before the end of 2012. If the regulations are adopted
in the form initially proposed, they will impose limitations on the manner in which we may structure
compensation for our executives.
The scope and content of the U.S. banking regulators’ policies on incentive compensation are continuing to
develop. It cannot be determined at this time whether a final rule will be adopted and whether compliance with
such a final rule will adversely affect the ability of Regions and its subsidiaries to hire, retain and motivate their
key employees.
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 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
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