Which of the following bank policies does NOT comply with the Interagency Policy Statement on the Retail Sales of Nondeposit Investments?
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A. B. C. D.D
The Interagency Policy Statement on the Retail Sales of Nondeposit Investments is a regulatory guidance issued jointly by various regulatory agencies such as the Federal Reserve, FDIC, and OCC. The purpose of this policy statement is to provide guidance to banks and their employees regarding the sale of nondeposit investment products to customers.
Option A does not comply with the Interagency Policy Statement on the Retail Sales of Nondeposit Investments. According to the policy statement, bank employees should not receive compensation based solely on the volume of sales achieved. Instead, employee compensation should be based on the quality of service provided and the suitability of the investment product for the customer's needs. If employees are incentivized solely based on the volume of sales, there is a risk that they may prioritize their personal gain over the customer's best interest, leading to unsuitable recommendations.
Option B complies with the policy statement as it requires all employees to provide the bank's required disclosures to customers before the purchase of a nondeposit investment product. These disclosures include information about the risks associated with the investment, fees and charges, and the fact that the investment is not FDIC insured.
Option C also complies with the policy statement as it prohibits tellers from discussing nondeposit investment products with customers. Teller roles are typically focused on handling routine transactions such as deposits and withdrawals, and they may not have the necessary knowledge or training to provide investment advice.
Option D does not comply with the policy statement as it incentivizes tellers and new accounts personnel to refer customers to the nondeposit investment department. The policy statement prohibits the use of referral fees or other incentives that may influence employees to make unsuitable recommendations.
In conclusion, Option A does not comply with the Interagency Policy Statement on the Retail Sales of Nondeposit Investments, while Options B, C, and D comply with different aspects of the policy statement.