Community West Bancshares
CODE OF ETHICS: PERFORMANCE & CONDUCT Home  
DEFINITIONS USED IN THIS CODE
  • Company: Community West Bancshares and/or all direct and indirect subsidiaries currently existing or hereafter formed or acquired.
  • Director: Includes all members of the Boards of Directors of the Company and its banking and corporate subsidiaries, and also includes any members of the board or managers of any subsidiaries organized as limited liability companies.
  • Staff members: Includes all Employees and Officers of the Company and its banking and nonbanking subsidiaries.
  • Immediate Family: Includes father, mother, spouse, civil union partner, children, siblings and in-laws of a staff member. These may be blood, step or adoptive relationships.

GENERAL STATEMENT

The Company conducts 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 relationships which may present legal and ethical concerns and sets forth a code of conduct to guide employees.
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.

The nature of the Company’s business requires careful observance of applicable laws and regulations to ensure full, fair, accurate, timely, and understandable disclosure in reports and documents.
Administration of the Code of Conduct
It is the responsibility of each staff member to be familiar with the Company’s Code of 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 of Conduct.

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 of Conduct.

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.

Staff members who violate the provisions of the Code of Conduct may be subject to immediate dismissal.
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I. CONFLICTS OF INTEREST

Policy
The Company recognizes a staff member’s right to engage in lawful outside conduct during non-working hours away from our premises. However, a conflict of interest occurs when the private interests (or the private interests of the staff member’s immediate family members) interfere with the member’s job responsibilities. Staff members must not place themselves or the Company in a position of conflict. All staff members are required to disclose in writing to the Human Resources Director 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. Existing written records of all such disclosures are retained by the Company. If the lawful off-duty activities create a conflict of interest or prevent the staff member from successfully performing their job duties, the Company will ask the staff member to choose between terminating the off-duty conduct and resigning from their position with us.
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Acceptance of Gifts
Staff members and their immediate family may not give or accept cash or gifts, loans, expensive entertainment or anything else that might be expected to influence your conduct with our customers and clients or their families, 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, or in connection with any business or transaction of the Company, business associates, vendors or other persons providing goods or services to us, or other staff members or independent contractors of our Company.

Specific exceptions to this prohibition are made if there is no reasonable likelihood of improper influence or appearance of potential influence in the employee’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 those received at holiday time, special occasions, a new job, promotion, wedding, or retirement, which represent an 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 staff member to his/her supervisor/manager in a memorandum format to be maintained in the personnel file. The supervisor/manager 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 staff member or director 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 themselves or for any other person or entity, for or in connection with any transaction or business of the Company.
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Political Contributions
The Company will 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. In accordance with applicable 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. 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. However, it must be clear at all times that such participation is done as an individual and not as a representative of the Company.

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.

Before becoming a candidate or appointee to a public office, staff members must notify the Human Resources Department to discuss appropriate steps to avoid conflicts or perceptions of conflicts of interest.
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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 Resources 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
1. The Company maintains prudent lending services to adequately supply the credit needs of its customers. Any rate concessions shall be based solely on a borrower’s creditworthiness and overall business relationship with the Company.

2. Staff members may not 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/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.

3. Federal law prohibits any director or staff member 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.

4. Staff members may not exercise authority over any transactions on their own personal loan or deposit accounts.
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Giving Advice to Customers
Staff members 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, staff members 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
Staff members 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 or staff member of the Company 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 note, 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."

The Company prohibits any staff member from paying to any person, business, or organization any money, property or any form of compensation in return for referring business (loans, deposits, etc.) to the Company.

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II. CONFIDENTIALITY

Staff members, and others who serve 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 staff members. Release of any such information will result in immediate termination of employment and/or contractual agreement.

The Company also use resources to develop confidential information and trade secrets that are essential to the Company, clients and staff members. Confidential information and trade secrets are developed by staff members as part of their job duties and responsibilities. Because protecting confidential information and trade secrets is important to the Company, staff members are required to sign a Confidential Information Agreement as a condition of employment.

Confidential or trade secret information includes financial data, product information, the names and contact information for customers, vendors and other potential customers, technological data, marketing information, and other details of our business. This information may be contained in our written materials or in the Company’s electronic databases.

Staff members must take great care to protect the trade secrets and other confidential information. Staff members may not disclose any trade secrets or confidential information to third parties, either during or after your employment. Staff members must store all confidential and trade secret information in a manner that protects and maintains the confidentiality of that information.

Customer Information
Safeguarding all customer information and all customer financial information (“Confidential Information”) concerning the Company’s customers is essential in maintaining the public trust. Such Confidential Information acquired by a staff member 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 staff members and/or contractors. 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/CEO. The Company expects every staff member 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 above.
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Material Inside Information
The disclosure of “material inside information” subjects staff members, agents, contractors or the Company, as well as 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 staff member, 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. Lending personnel must not disclose confidential information on existing or proposed loan customers to investment personnel.
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III. INSIDER TRADING

Staff members 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 a staff member 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 staff member 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 staff member or director must maintain such information in the strictest confidences. A staff member or director of the Company must also not permit any member of their 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, staff members 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:
  1. 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

  2. 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 announced publicly.

In view of the foregoing, it is the policy of the Company that staff members 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. TECHNOLOGY AND COMMUNICATIONS SYSTEMS

The Company’s technology and communication services, equipment and content (“Communications System”) include mail, electronic mail ("e-mail"), facsimiles, telephones, voicemail, personal computers, computer networks, on-line services, Internet connections, computer files, video equipment and tapes, tape recorders and recordings, dictation machines, pagers, cellular phones, PDAs, smart phones, text messages, Internet posts, bulletin boards and any similar communications or equipment. As technology progresses, there will no doubt be additions.

The Communications System is the Company’s property. Staff members have no personal rights and no right of privacy in any use of the Communications System. Every staff member’s use of the Communications System, including all content created or stored on it will be monitored.

When using our Communications System, staff members must comply with the following guidelines:
  • The use of the Communications System is only for business purposes. Personal use of the Communications System is not permitted, and not to expect privacy with regard to any unauthorized personal use.
  • Sending or receiving personal mail or e-mail with our Communications System is not permitted.
  • Using our Communications System to harass others, to gossip or bully others, or to send anonymous communications is not permitted.
  • Telling outside parties that your voicemail or email is private or confidential is not permitted, since it may be accessed by the Company or by other employees as necessary.
  • Installing or downloading any software, Internet add-in, toolbar, software update or other addition to our Communications System is not permitted without the advance approval of the IT Department.
  • Sending or downloading Company information or property to staff member’s personal e-mail or other outside location including an external drive or storage device is not permitted except as required in your job duties.
  • The Company may access any staff member’s use of the Communications System at any time;
  • Access another staff member’s use of our Communications System without that person’s advance permission to do so is not permitted.
  • The Company has access to staff member’s use of the Communications System at all times, and use of personal passwords does not prevent the Company from doing so. If personal passwords are implemented, disclosure to the IT Department is required. Disclosing personal passwords to any other staff member without the prior approval of the IT Department is not permitted.
In addition to any disciplinary action that may be imposed, the Company may also advise law enforcement authorities of any illegal use of the Company’s Communications System.
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V. MISCELLANEOUS MISCONDUCT

Dealings with Competitors
Staff members must 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 members 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
The Company 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
The Company maintains 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 immediate termination.
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