ABA Encourages FDIC to Maintain Exam Flexibility

The American Bankers Association encouraged the FDIC today to maintain flexibility as it thinks about how best to conduct exams post-pandemic. The association said the FDIC should allow banks to opt for a fully onsite, hybrid or fully offsite exam, “with the proper balance of offsite and onsite work dictated by banker and examiner needs and preferences.”

The fully remote exams necessitated by the pandemic were viewed by bankers as generally positive, ABA said, adding that many banks reported that pre-examination preparations and in-exam data, loan file and policy reviews worked well remotely. However, there is concern among bankers, ABA added, that fully remote examinations may diminish existing relationships, “eventually making the examination process less efficient.” Bankers noted issues with an over-reliance on email that created logistical inefficiencies and amplified smaller, routine matters, ABA said.

The association recommended that the FDIC improve the remote examination process by, among other things, encouraging examiners to establish a formal work plan of what can or should be done virtually, with frequent videoconference check-ins. ABA also urged the FDIC to create finite timeframes for the duration of remote exams and modernize examiner training for a remote environment.