FDIC bank examinations are not always effective in identifying risks to customers and banks that participate in government-guaranteed loan programs, the Office of Inspector General determined in a report released today. The watchdog agency recently evaluated the effectiveness of FDIC examinations in addressing risks related to government-guaranteed loans. “These risks, if left unmitigated, can impact the safety and soundness of the bank, leading to deterioration or failure,” the agency said.
OIG found FDIC’s bank examinations lacking in several areas. Among other things, the report noted that the agency’s guidance differed from that of other federal bank regulators, it did not provide adequate training to examination personnel on lending programs, nor did it effectively share information externally and internally to enhance risk oversight of participating banks.
OIG made 19 recommendations to improve the FDIC’s supervision of the programs, including better training for agency personnel, collecting better data on guaranteed lending activities, and development of guidance to facilitate information sharing with other agencies. The FDIC concurred with 13 recommendations and partially concurred with the remaining six recommendations, offering what OIG said were acceptable alternative actions.