In today’s political climate, smart banks take a proactive approach to educating officers, employees and board members about political activity compliance. Just as a bank’s code of conduct addresses sexual harassment, privacy of customer information and customer relations, a bank’s code of conduct should address the dos and don’ts of political activity.
Since 1911, New Jersey banks have been subject to the regulated industry ban. The ban prohibits banks and their majority shareholders from making political contributions. Despite this prohibition, invitations for political fundraisers are likely crossing the desks of bank officers, employees and board members on a regular basis. Because these individuals have a First Amendment right to participate in the political process and may not be aware of the nuances of the regulated industry ban and pay-to-play restrictions, banks need to put protocols in place to assist compliance with the law.
Originally published in New Jersey Banker - Spring 2014.
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