Compliance & Risk Management in Banking: Legal Considerations

Banking is highly regulated for a reason. Financial institutions hold and manage other people’s money. There must be regulations in place to protect customers and investors. However, compliance can leave you in a maze of regulations and rules where one mistake could result in significant legal and financial problems. Our South Carolina business attorneys discuss compliance and risk management in banking, including strategies for reducing the risk of non-compliance. 

What Is Compliance Risk Management in Banking?

Compliance risks are a concern for any organization, especially for highly regulated businesses like banking. Banks must comply with a host of regulations set by the OCC (Office of the Comptroller of the Currency), the FDIC (Federal Deposit Insurance Corp.), and other regulatory agencies. 

Compliance risk management is the process of identifying and assessing risks related to compliance with industry standards and regulations. It includes the policies and procedures in place to monitor risks and compliance to ensure that a financial institution remains compliant. There should also be a procedure to assess the liability and losses a bank might face for non-compliance. 

The steps involved in compliance risk management for banks include:

Assessing Current Framework

Analyze the systems and processes you use to ensure compliance with regulations and standards. A robust framework for compliance risk management is essential. It should provide a structure to adequately control and monitor compliance risks. Assessing the strength of your current framework identifies areas that need to be improved to reduce risks.

Perform a Risk Assessment

Determine the types of compliance risk to the bank. Formulating a risk matrix is one of the best ways to understand the types of risks the bank faces and the likelihood and impact of each risk. An area that many banks overlook is cyber security compliance. Policies must be in place for effective measures that deal with cyber threats and risks. 

Pinpoint Gaps in Compliance

Identify areas where gaps exist in compliance. Immediately place practices and procedures to fill these gaps to ensure compliance with industry requirements and regulations or modify existing policies to address the compliance gaps. 

Foster a Culture of Compliance

Hold security training programs to ensure employees are aware of the policies and procedures for compliance. Ensure employees are comfortable taking an active role in compliance risk management, including reporting potential compliance risks. As part of the compliance management framework, implement clear responsibilities within the bank and install procedures for accountability.

Remain Current on Changes to Banking Regulations

Changes in regulations and compliance can create legal issues if you are not aware of the changes. Work with legal counsel to ensure you have a procedure in place to receive information about changes and implement new standards and policies to ensure compliance with the changes. 

Learn More About Compliance and Risk Management From Our South Carolina Business Attorneys

All businesses face issues with compliance and risk management. At Willcox, Buyck & Williams, P.A., our lawyers assist companies and business owners in implementing strategies and policies to ensure compliance and lower risks. We also help you navigate legal issues related to these matters. Call today to schedule a consultation with one of our South Carolina business attorneys.

Should Your Business Accept Bitcoin?


In 2009 when Bitcoin was first invented and introduced, very few people knew about it or understood it. However, Bitcoin has increased in popularity over the past few years with more and more companies agreeing to accept the digital currency as one of their forms of payment. However, should your business begin accepting Bitcoin for payment of services or goods? Our South Carolina business and commercial lawyers can help you determine the best choice for your business.

What is Bitcoin?

Bitcoin is a form of digital currency used to pay for goods and services over the internet. In addition to accepting Bitcoin as a form of payment, you can also acquire the digital currency in other ways. “Mining” is a popular way to obtain the currency. Special software is used to solve a key that opens or verifies transactions. For finding the key, you receive 25 Bitcoins. In addition to mining for Bitcoin or accepting them as payment, you can also purchase them from a Bitcoin exchange.

Bitcoins increased in value rapidly making them appealing for investors. However, cryptocurrency has its risks, and some individuals lose money instead of making money by dealing in Bitcoin.

What are the Benefits and Risks of Accepting Bitcoin for Payment?

Some companies may be comfortable accepting Bitcoin for payment, but it may not be a prudent choice for your company. However, some of the benefits of cryptocurrency can make it an appealing option. For instance, you do not need to pay a fee to accept Bitcoin as payment. Credit card transactions, bank wires, and other financial transactions can require a processing fee that can be expensive. Furthermore, transactions involving cryptocurrency are typically faster than other forms of payment. Payments cannot be disputed like credit card payments or PayPal payments, and you are not required to meet the strict Payment Card Industry security standards.

However, using Bitcoin has several risks. Cryptocurrency is not regulated; therefore, any disputes or issues may be very difficult to resolve. Bitcoin has increased in value in the past, but as we have witnessed, the value of cryptocurrency is not guaranteed. Compared to the dollar, Bitcoin is unstable and subject to market volatility. There is no insurance guarantee when accepting Bitcoin as payment and your online  “wallet” used to hold your cryptocurrency is vulnerable to hacking. Just like cash, if your Bitcoin is stolen, it is gone forever.

Protect Your Business

If you decide to accept Bitcoin as payment for goods and services, you need to take precautions to reduce any risk. For example, you should not accumulate large sums of Bitcoin in your virtual wallet. Cashing in the cryptocurrency through an exchange and placing the funds in a federally insured bank can reduce the risk of losing money because of breaches.

It may be tempting to hold the Bitcoin because it may increase in value; however, if your wallet is hacked, you could lose hundreds of thousands of dollars depending on the amount of Bitcoin in your account.

Consult a South Carolina Business Attorney Regarding  Bitcoins and Other Cryptocurrency

Our South Carolina business attorneys can review the pros and cons of Bitcoin as a form of payment in further detail during a consultation. Contact our South Carolina banking lawyers at Willcox, Buyck & Williams, P.A. For many businesses, the risks of accepting cryptocurrency for payment outweigh the potential benefits, but it cannot hurt to discuss the matter with an experienced business attorney.

7 Things to Watch Out for in SC Commercial Loans


You may need a commercial loan to provide funds for operating costs for your company, a construction project, or capital expenditures. Commercial loans include real estate loans and business loans secured by personal property. If you are a lender or a borrower in a commercial loan transaction, you need experienced South Carolina banking lawyers working for you to protect your interests.

Below are several things that you may not know about commercial loans in South  Carolina.

1. Other collateral may be required to secure a commercial loan.

In addition to real estate, a commercial lender may require additional collateral to secure the loan. Examples of assets that may be used to secure a commercial loan include equipment, fixtures, accounts receivable, general intangibles, inventory, bank or trade accounts, and supplies.

2. You may be required to assign rents and leases as part of the commercial loan.

If you intend to develop the commercial property to rent or lease to other parties, you may be required to assign those rental and lease agreements to the commercial lender to secure the loan. In the event you default on the commercial loan, the lender can collect the rent and lease payments.

3. An environmental indemnity agreement may be required.

Depending on the type of business that is expected to be operated on the commercial property, the lender may require an environmental indemnity agreement. An environmental indemnity agreement holds the lender harmless for losses or claims arising from environmental contamination.

4. Personal guarantees may be required as part of the commercial loan.

In addition to requiring collateral to secure a commercial loan, the lender may also require personal guarantees from owners, partners, investors, members, or shareholders of the company. A personal guaranty is a promise to pay the debt owed on the commercial loan if the borrower defaults on the loan. The commercial lender can pursue legal remedies against guarantors if they do not pay the debt, including collection against the guarantor’s assets.

5. An assignment of a construction contract and related documents may be required for the commercial loan.

If you intend to use the commercial loan to finance a construction project, a commercial lender may require an assignment of the construction contract and related agreements and contracts. The assignment allows the lender to continue the construction if you default on the loan to protect its investment in the property.

6. Some commercial loans include a prepayment premium or penalty.

Some commercial lenders use a prepayment penalty or premium to compensate the lender for the loss of the anticipated revenue stream if a loan is paid in full before the maturity date. A prepayment penalty can add a significant amount to the payoff of the commercial loan, depending on the terms and the timing of the payoff.

7. When real estate is used as collateral, an attorney must handle the loan closing.

In South Carolina, if a real estate mortgage is being used to secure real property as part of the commercial loan, an attorney licensed to practice law in South Carolina must handle the loan closing.

Contact Our South Carolina Banking Lawyers if You Have Questions

If you have questions about a commercial loan, contact our South Carolina banking lawyers at Willcox, Buyck & Williams, P.A. We can assist you with all matters related to commercial lending.