1. April 17, 2014 THE NEW REGULATORY LANDSCAPE: LEADERSHIP—THE KEY TO SUCCESS SAMUEL P. GOLDEN MANAGING DIRECTOR AND CO-CEO ALVAREZ & MARSAL FINANCIAL INDUSTRY ADVISORY SERVICES, LLC DISCUSSION MATERIALS FOR:

2. © Copyright 2012. Alvarez & Marsal Holdings, LLC. All rights reserved. ALVAREZ & MARSAL®, ® and A&M® are trademarks of Alvarez & Marsal Holdings, LLC. THE NEW REGULATORY LANDSCAPE I.New Rules II.Supervisors under Scrutiny III.Heightened Expectations for Enterprise Risk Management (ERM) IV.Consumer Financial Protection Bureau (CFPB) – Finding Its Way V.An Unprecedented Focus on Compliance VI.Increased Attention to Anti-Money Laundering (AML) Laws VII.Summary

3. NEW RULES 2 Dodd-Frank Financial Stability Oversight Council (“FSOC”) Created OTS Eliminated Increased OCC, FDIC, and Fed Roles Systemically Important Financial Institutions (SIFIs) New CFPB Regulations - (ATR, QM and QRM) Fannie & Freddie Conservatorship Secondary Mortgage Market Reform Large Settlements & “Put-backs” Securitization Reforms Scrutiny of Credit Rating Agencies OTC Derivative Swaps Clearing & Trading Regulations Volcker Rule Significant Increases in Regulation and Oversight

4. SUPERVISORS UNDER SCRUTINY 3  Money Laundering Enforcement  HSBC, Standard Chartered, etc.  Servicer Reviews  London Whale Case (JPM)  Consumer Compliance (UDAAP, Fair Lending, Debt Collection, Over-Draft Protection, NSF Fees, etc.)  Leadership changes and internal reviews  A diminished role for judgment – Regulators have little incentive to take risk  As the number of appeals fielded by the OCC’s Ombudsman increases, published resolution standards are challenged

5. HEIGHTENED EXPECTATIONS FOR ERM 4  Increased Board Responsibilities  ERM – No true threshold on an institution’s size  Capital Planning, Stress Testing, Recovery and Resolution Plans – Not just for the big banks  Increased reliance on quantitative analysis and stress tests  Risk Identification, Risk Assessments, Risk Tolerance, MIS, Independent/Systematic Testing, Validation and Oversight, and Board Reporting – The Key Ingredients for Effectiveness  Business units must act as the “First Line of Defense”  Document, Document, Document – Tell your story

6. CFPB - - FINDING ITS WAY 5 Guidance and examination procedures Role of enforcement attorneys Examination report processing times Staffing and turnover Mix between bank and non-bank examinations Inconsistent levels of expertise and experience throughout “The Bureau”

7. AN UNPRECEDENTED FOCUS ON COMPLIANCE 6  Compliance Risk Assessment  Pre-Paid Cards, Overdrafts, NSF Fees, Debt Collection  Unfair or Deceptive or Abusive Acts or Practices (UDAAP)  Fair Debt Collection Practices  Residential Lending  Fair Lending – Treatment of Disability Income  HMDA – New Reporting Requirements  CRA – Evolving Consideration of Performance Context  Vendor Management  Customer Complaint Management  Recent Enforcement Actions  Business Units Must be Involved – They are the First Line of Defense

8. INCREASED ATTENTION TO AML LAWS 7  The “Bar Continues to Rise”  Recent Enforcement Actions Increased Regulatory Enforcement Scrutiny BSA Risk Assessment Wire Transfers Privately Owned ATMs Money Service Businesses E-Money BSA/AML Automated Tools BankIssueAgencyFine/ActionDate Saddle River Valley BankBSAFinCEN$8.2 millionSept 2013 TIAA-CREF Trust Co., FSBBSAOCCCease & DesistJune 2013 Bank of Tokyo-Mitsubishi UFJAMLNew York State$250 millionJune 2013 HSBC Bank USABSA and AMLFinCEN, OCC, Fed Reserve and USDJ $500mm; $500mm; $165mm and $1.256 billion Dec 2012

9. SUMMARY 8 1.The “Bar Continues to Rise” – Be Prepared 2.Regulatory burden may be high – But the cost of remediating MRAs is much higher 3.Document, Document, Document – tell your story 4.Plan for examinations by doing examiners’ work for them 5.Pick your battles during and after examinations 6.Regulators have little incentive to take risk 7.Learn from the mistakes of others 8.Communicate, communicate and keep communicating 9.Strengthen and sustain your regulatory relationships – Trust is the key The Cost of Non-Compliance Has Never Been Higher!

10. www.alvarezandmarsal.com © Copyright 2013. Alvarez & Marsal Holdings, LLC. All rights reserved. ALVAREZ & MARSAL®, ® and A&M® are trademarks of Alvarez & Marsal Holdings, LLC.