ABA Bank Compliance - September/October 2012

This could include saving reports and data previously requested by examiners as “templates” for future use.

• Anticipate new requests and create a supplemental list or inventory of information that may be pertinent to the next examination based on the internal monitoring of:

• external feedback, industry developments or emerging issues, such as conducting an internal assessment to “double check” the bank’s CRA assessment area boundaries because of emerging regulator concerns that some banks may be arbitrarily excluding minority-concentrated areas; and

• internal developments, such as delineating the rationale and net customer benefit of new, changed, or discontinued products or services.

■ ■ PRINCIPLE #2: Effective program and exam preparation. Periodically self-assess the effectiveness of the compliance program and make modifications consistent with regulatory expectations. The results can help direct management to material issues, strengths as well as challenges, which can be shared with examiners. Self-assessments are helpful because they document management’s re-evaluation of the organization’s risks and the sufficiency of action taken to address identified issues and recommendations from prior examinations, internal compliance reviews, and audits.

■ ■ PRINCIPLE #3 Effective communication with all stakeholders. Complementing written information with verbal communication is critical to ensuring that examiners gain a sufficient and accurate understanding of the organization. The discussions also provide bank management the opportunity to get the examiner’s perspectives, which may be helpful because it could be based on common practices that have been observed at other institutions. Strategies that have been particularly helpful in providing effective communication “touch points” include:

• an initial call with regulator upon receipt of the information request letter to review expectations and clarify any issues regarding the request and other information about the start-up of the examination;

• a scheduled meeting upon delivery of request letter responses to “walk thru” (at least at a high level) what has been provided. This practice has served to reduce follow-up requests as well as the need to duplicate items previously provided; and

• an onsite orientation meeting (“the meet and greet”) with examiner-in-charge and team to help them acclimate to the organization. Also called the “first day meeting,” it provides a critical opportunity for management to “tell the bank’s story” by providing an overview of the institution’s activities since the previous examination. The meeting also provides a forum for the examiner to share the focus of their review and initial observations based on the pre-examination assessment. Typically, the agenda highlights: