GENERAL POLICY STATEMENT
It is the policy of the Community West Bancshares (Company) to conduct its business
in accordance with the highest ethical standards in order to merit and maintain
the complete confidence and trust of its customers and the public in general. Staff
members must conduct their personal affairs and manage their business transactions
in a manner which does not result in adverse comments or criticism from the public
or in any way damage the Company’s reputation as a responsible financial services
organization. This policy addresses both relationships, which may present legal
and ethical concerns and sets forth a code of conduct to guide staff members. The
term "staff member" refers to all officers and employees of the Company.
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Compliance with Laws & Regulations
It is the policy of the Company to fully comply with the spirit and intent of all
applicable laws and regulations. The Company expects its staff members to use good
judgment and high ethical standards and to refrain from any form of illegal, dishonest
or unethical conduct.
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Administration of the Code of Conduct
It is the responsibility of each staff member to be familiar with the Company’s
Code of Personal and Business Conduct. Supervising officers are expected to make
every reasonable effort to ensure that their subordinate staff continue to comply
with the provisions of the Code.
Senior management shall administer the Code, determine matters of interpretation
and coordinate periodic changes to the Code. Audit, examination and Human Resource
procedures shall accomplish the continued implementation of the Code.
Staff members are encouraged to seek the advice of the appropriate supervisor regarding
questions of interpretation and of the applicability of the provisions of the Code
to a particular situation.
All staff shall sign a written acknowledgement of receipt of a copy of the Company’s
Code of Conduct and of any subsequent changes thereto.
Staff members who violate the provisions of the Code of Personal and Business Conduct
may be subject to immediate dismissal.
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I. CONFLICTS OF INTEREST
Policy
A conflict of interest is defined as a staff member’s involvement in outside activities
which might either conflict with the staff member’s duty to the Company or adversely
affect the staff member’s judgment in the performance of his/her responsibilities.
It is the Company’s policy that staff members do not engage in personal conduct,
which will conflict with the interests of the Company. All staff members are required
to disclose any potential conflict of interest, including one in which they have
been inadvertently placed as a result of a business or personal relationship with
a customer, supplier, business associate or competitor of the Company, on the Company’s
form, Disclosure of Potential Conflict of Interest. This form is submitted to the
employee’s supervisor. Existing written records of all such disclosures are retained
by the Company.
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Acceptance of Gifts
Staff members and their immediate families shall not solicit, accept or retain a
benefit for themselves or for any third party from any customer of the Company,
any individual or organization doing or seeking to do business with the Company,
or from any other individual or organization based on a banking relationship other
than normal authorized compensation, with the intent to be influenced or rewarded
in connection with any business or transaction of the Company. In this context,
a benefit is regarded as any type of gift, gratuity, favor, service, loan, legacy
(except from a relative), fee or compensation, or anything of monetary value.
Specific exceptions to this prohibition are made if there is no, and there appears
to be no, reasonable likelihood of improper influence in the staff member’s performance
of duties on behalf of the Company. The personal benefit, however, must be one of
the following:
Normal business courtesies, such as a meal, refreshment or entertainment of reasonable
value, involving no more than ordinary amenities, in the course of a meeting or
other occasion, the purpose of which is to hold bona fide business discussions.
Non-cash gifts of reasonable value (under $100) such as received at holiday time
or special occasions, such as a new job, promotion, wedding, or retirement which
represent expression of friendship.
Gifts based upon obvious family or personal relationships when the circumstances
make it clear that it is those relationships, rather than the business of the Company,
which are the motivating factors.
Unsolicited advertising and promotional material of nominal value, such as pens,
pencils, note pads, key chains and calendars.
Awards given by charitable, educational, civic, or religious organizations for meritorious
contributions or service.
Loans from other banks or financial institutions on customary terms to finance proper
and usual activities, such as home mortgage loans, except where prohibited by law.
Discounts or rebates on merchandise or services that do not exceed those available
to other customers. Any personal benefit received, other than the exceptions noted
above, is to be reported by the employee to his/her supervisor in a memorandum format
to be maintained in the personnel file. The supervisor will review the situation
and instruct the staff member as to the appropriate action. Existing written records
of all such disclosures are retained by the Company.
It is important to recognize that federal law makes it a crime for any officer,
director or employee of a federally insured bank or bank holding company, directly
or indirectly, to ask, solicit, accept, receive or agree to receive anything of
value, for himself or for any other person or entity, for or in connection with
any transaction or business of the Company. Until recently, this federal law only
applied to bribes to procure or attempt to procure a loan. However, the recent amendment
to this federal bribery statute eliminates the necessity of showing that the staff
member received the payment in exchange for making a loan. The penalty for violating
this law is a fine, imprisonment, or both. Any offer of such an improper payment
should be immediately reported to the staff member’s supervisor.
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Political Contributions
It is the policy of the Company to strictly comply with all applicable federal and
state political campaign laws.
Under federal law, a national bank is prohibited from making a contribution or expenditure
in connection with any federal or state election to any political office, or in
connection with any primary election or political convention or caucus held to select
candidates for political office. Other corporations are prohibited from making any
contribution or expenditure in connection with any federal election or campaign.
In accordance with federal law, no staff member shall make any direct or indirect
contribution of funds or other property of the Company in connection with the election
of a candidate to any political office. For these purposes, use of the corporate
facilities and equipment for political activities is deemed to be a contribution.
Loans to candidates for political office or to a political committee are not prohibited
so long as the loan is made in the ordinary course of business and meets the Company’s
usual credit criteria and approval procedures for the particular type of loan.
The Company’s policy regarding corporate political contributions is not intended
to discourage staff members from making personal contributions to candidates or
political parties of their choice.
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Outside Employment
The Company discourages staff members from holding outside employment. In those
cases where it is justified, written approval from the Human Resources Department
is required. No outside employment or activity will be approved which might subject
the Company to criticism or which will encroach upon regular working hours, interfere
with regular duties, or necessitate such long hours as to affect the member’s productivity.
Business Unit Managers and the Human Resource Department Director will be particularly
concerned about outside work requests that:
Reduce the employee’s efficiency in working for the Company. Involve working for
any competing financial institution such as another bank, a savings and loan association,
or a credit union, or for any organization deemed to do a significant amount of
business with the Company, such as major contractors, suppliers, and customers;
or, may adversely affect the Company’s image in its market. All employees who accept
outside employment are not eligible for paid sick leave or personal absence when
the absence is to be used for work on the outside job or is the result of an injury
sustained on the second job. Fraudulent use of sick or personal absences will be
subject to disciplinary action, up to termination.
Outside Activities. The Company encourages individual participation in civic activities.
Normally, voluntary efforts must take place outside of regular business hours. If
voluntary efforts require business time, the staff member should obtain prior approval.
The Community Service Form (found on the intranet) for volunteering time should
be submitted to the HR Department for record keeping purposes.
Staff members are not to act, without prior written approval of management, as executor,
administrator, trustee, guardian or conservator, or in any other fiduciary capacity,
whether or not it is related to the business of the Company. Approval, except in
unusual cases, will normally be granted to act as fiduciary for a family member.
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Personal Finances
Personal finances should be managed in a manner consistent with employment in a
financial institution. Staff members and their immediate families should borrow
only from reputable organizations that regularly lend money and such borrowings
must carry the prevailing rate of interest and not involve favored treatment of
any kind. Borrowing from relatives is not subject to restriction. Staff members
are not permitted to borrow money from their co-workers, but should discuss any
financial emergency with the Human Resource Department.
Staff members should not sign on customers’ accounts, act as deputy or co-renter
of customers’ safe deposit boxes, or otherwise represent customers. This does not
include customers related to the staff member by blood or marriage.
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Personal Investment Activity
While the Company does not intend to unreasonably limit staff members in their personal
investment activities, it is Company policy that no staff member enter into investment
transactions which would create, or give the appearance of creating, a conflict
of interest between the staff member and the Company or between the Company and
any customer.
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Lending Practices
It is the policy of the Company to maintain prudent lending services to adequately
supply the credit needs of its customers. Any rate concessions shall be based solely
upon a borrower’s creditworthiness and overall business relationship with the Company.
Staff members are not in any way to represent or exercise authority on behalf of
the Company, grant direct or indirect accommodations or make credit recommendations
with respect to: members of their families; any individual or organization to which
the staff member or his or her immediate family is indebted; or any organization
to which the staff member, or his/her immediate family, is associated or in which
a material financial interest is held.
Federal law prohibits any director, officer or employee of the Company from granting
any loan or gratuity to any public bank examiner or assistant bank examiner, who
examines the Company or has authority to examine the Company.
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Giving Advice to Customers
Employees may occasionally be asked by customers to comment upon the legality of
a particular transaction. Since the Company cannot practice law or give legal or
tax advice, employees must exercise care in discussing transactions with customers
and nothing should be said that might be interpreted as the giving of legal or tax
advice.
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Financial Speculation
Employees should not speculate in securities or real estate in anticipation of realizing
a profit where the information, which prompted the purchase, was gained by reason
of their employment in the Company.
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Fees for Negotiation of Loans
It is considered a felony under existing laws for any director, officer or employee
of a bank to ask for or receive from a customer any money, property or thing of
value for their personal benefit or advantage for procuring or trying to obtain
loans from such bank for anyone. Specifically, the California Financial Code provides:
"Any director, officer or employee of a bank...who asks for, or receives, or consents,
or agrees to receive any commission, or gratuity or any money, property, or thing
of value for his own personal benefit or personal advantage for procuring or endeavoring
to procure for any person any loan from such bank, or the purchase of or discount
of any not, draft, check, bill of exchange, or other obligation by such bank, or
for permitting any person to overdraw any account with such bank, is guilty of felony."
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II. CONFIDENTIALITY
Officers, Employees, Independent Contractors, and other as-needed employees of the
Company are in daily contact with and have access to confidential and privileged
information about depositors, borrowers, stockholders, Directors, Officers and other
employees.
In holding such a position of trust, it is imperative that such information never
be divulged or otherwise improperly used by employees. Release of any such information
will result in immediate termination of employment and/or contractual agreement.
Customer Information
Safeguarding all personal and financial information concerning the Company’s customers
is essential in maintaining the public trust. It is the policy of the Company that
such confidential information acquired by an employee or agent through his/her employment
or contract must be held in the strictest confidence. Such information is to be
held for Company purposes only and not as a basis for personal gain by any employee
and/or contractor. Aside from routine credit inquiries, information regarding a
customer may be released to private persons, organizations or governmental bodies
that request it, generally ONLY with the written consent of the customer involved
or upon receipt of legal process, such as a subpoena or court order. Confidential
customer information should never be discussed with anyone outside the Company,
and only with those within the Company who have a legitimate business need to know.
Confidential customer information should never be discussed in public places, even
within the Company’s offices. Staff members should be sensitive to the risk of inadvertent
disclosure resulting from open doors, speakerphones, and cellular phones and when
transmitting confidential information by fax or other electronic media.
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Information Regarding the Company
Financial or other Information regarding the Company is not to be released to any
outside person or organization unless it has been published in reports to shareholders,
or otherwise made available to the public through authorized news releases. All
news media inquiries must be referred to the President. The Company expects every
employee to treat information concerning the Company and its personnel with the
same confidentiality as information concerning customers of the Company and to observe,
with respect to the Company, the same guidelines set forth in the paragraph above.
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Material Inside Information
The disclosure of "material inside information" subjects employees, agents, and
contractors of the Company, and third parties to whom the information is communicated
to severe penalties under federal and state securities laws. Information is "material"
when there is a significant likelihood that a reasonable investor would think the
information is important in making an investment decision. Information is "inside"
when it has not been disseminated to the public at large. Any employee, agent or
contractor possessing such material inside information must not trade in or recommend
the purchase or sale of the securities involved until the information is actually
disseminated to the public. See Section III below regarding "Insider Trading."
Lending personnel must not disclose confidential information on existing or proposed
loan customers to investment personnel.
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III. INSIDER TRADING
Employees and directors of the Company are frequently entrusted with possession
of confidential and highly sensitive information concerning the Company, its clients
or other businesses with which the Company has material contractual relationships
or with which the Company may be in the process of negotiating material transactions
(“Confidential Parties”). As long as an employee or director of the Company is aware
of material non-public information relating to the Company, any of its clients or
any Confidential Party, it is the Company’s policy that such employee or director
may not buy or sell the securities of the Company, the client or the Confidential
Party, as applicable, regardless of how that information was obtained.
Equally important, the employee or director must maintain such information in the
strictest confidences.
An employee or director of the Company must also not permit any member of his/her
immediate family or anyone acting on his/her behalf, or anyone to whom he/she has
disclosed such information, to purchase or sell such securities.
After the information has been publicly disclosed through appropriate channels,
employees and directors of the Company should nevertheless allow a reasonable time
to elapse (usually three business days) before trading in the security, to allow
for broad public dissemination and evaluation of the information.
The Board of Directors has implemented an Insider Trading Policy, which states:
- The officers, directors, and employees of this corporation are prohibited from engaging
in any transaction in the securities of this corporation while in the possession
of material, non-public information concerning the corporation
- The directors and officers of the corporation and any employee of this corporation
so designated by the Board of Directors or the Chief Executive Officer (a "Designated
Employee") are prohibited from engaging in any transaction in the securities of
this corporation during the period starting 15 business days before the last day
of each fiscal quarter and ending on the close of trading on the second full trading
day after earnings for this corporation are publicly announced.
In view of the foregoing, it is the policy of the Company that employees and directors
of the Company must not purchase or sell securities of the Company, any client of
the Company or any Confidential Party, if the employee or director has, or believes
he/she may have, material non-public information relating to the Company, such client
or such Confidential Party, as applicable. All inquiries in this regard, including,
without limitation, inquiries as to whether information is material non-public information
or whether a company or person is a client of the Company of a Confidential Party,
should be directed to the President and CEO.
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IV. PRIVACY
In order to assure access at all times to Company property, and because employees
may not always be available to produce various documents, records, files or other
items in their possession in the ordinary course of business, the Company reserves
the right to conduct a routine inspection or search of the Company’s premises at
any time, without the consent of the employee.
The Company’s premises include all locations owned or leased by the Company or under
the control of the Company, including office space, parking lots, closets, storage
areas and lockers. Company property includes all tangible and intangible personal
property of the Company, including, without limitation, all furniture, equipment,
file cabinets, computer hardware and software, licenses and copyrights. The foregoing
includes all communications and transmissions of any kind, including all information
stored on any hardware, software, electronic disk, voice mail, email, and all other
electronic communication media.
Routine searches and inspections may include an employee’s office, desk, file cabinets,
closet, locker, computer files, whether contained on a hard drive or floppy disk,
including past and present email communications, and similar places where Company
property may be located, whether or not such places are locked.
All system pass codes must be available to the Company at all times. Employees may
not use pass codes that are unknown to the Company. Employees are prohibited from
using the code of another employee to gain access to that individual’s email, voice
mail or computer system.
Employees are prohibited from using the Company’s information systems in any way
that might be considered disruptive or offensive to others, including customers
and vendors. Personal or inappropriate use of the Company’s information systems
may result in disciplinary action, up to and including termination. Inappropriate
transmission includes, but is not limited to, sexually explicit messages, offensive
language and ethnic, racial and gender-specific slurs.
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V. MISCELLANEOUS GUIDELINES FOR CONDUCT
Dealings with Competitors
The policy of the Company is to require staff members to observe fair and ethical
conduct in dealing with the Company’s competitors. The making of disparaging remarks
regarding the Company’s competitors is considered to be inappropriate and unethical.
The Company’s strategy is to emphasize the quality and competence of its staff and
services. Staff members are prohibited from involving the Company in arrangements
with its competitors which provide for the setting or controlling of rates, prices
or marketing policies.
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Exclusive Dealings & Tying Arrangements
It is the policy of the Company that it does not condition the sale of services
to a customer upon the condition that the customer must purchase other services
from the Company or upon the condition that the customer is prohibited from dealing
with other suppliers of such services.
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Dealings with Auditors
Staff members are required to fully cooperate with audits conducted by the Company’s
internal audit staff or external auditing firm. Questions raised by the auditors
must be responded to honestly and no adverse information may be concealed.
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Falsification of Books & Records
It is the policy of the Company to maintain records and accounts, which accurately
reflect its assets, liabilities, receipts and disbursements. The falsification of
any books, records or documents of the Company is grounds for dismissal.
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