As part of an ongoing review of the safety and soundness exam process, the Federal Financial Institutions Examination Council today issued a second update on progress made to date. The update focuses on regulators’ work to tailor examinations based on the risk profiles of individual institutions.
After reviewing and comparing current principles and process for tailoring community bank examinations based on risk profile, the agencies committed to issuing reinforcing and clarifying guidance where necessary. This guidance would help ensure that examiners consider the unique risk profile, complexity and business model of the bank when developing an examination plan; analyze existing information to identify areas of higher and lower risk; and appropriately tailor document requests based on risk profile, among other things.
The American Bankers Association has been engaged throughout the exam modernization effort, facilitating calls between community bankers and the FFIEC regulatory staff to discuss ways to improve the exam process, streamline exam reports and make the Uniform Bank Performance Report more accessible and informative. The association will continue to engage with regulators and provide feedback on how to reduce the exam burden for banks.