October 21, 2020

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FFIEC Adopts Policy Statement Updating the Uniform Report of Examination

The Federal Financial Institutions Examination Council (FFIEC)—the interagency body tasked with setting uniform principles and standards for the examination of financial institutions by federal regulators, including the Consumer Financial Protection Bureau—has adopted a Policy Statement designed to streamline the information presented in examination reports (“ROE”). While the agencies represented by the FFIEC will make any individual adjustments deemed necessary for their existing ROE guidance, financial institutions should be aware of the new format outlined in the Policy Statement which sets forth minimum expectations for what should be included in all ROEs.

In the Policy Statement, the FFIEC explicitly rescinds and replaces the 1993 Interagency Policy Statement on the Uniform Core Report of Examination. The Policy Statement is the latest in a series of FFIEC announcements related to their Examination Modernization Project which was launched to identify and assess ways to improve the effectiveness, efficiency and quality of examination processes, particularly through the use of technology, and to reduce unnecessary regulatory burden on community financial institutions. The Policy Statement list of minimum expectation for ROEs includes:

  • Identifying information about the institution and agency;
  • A statement on the confidentiality of information;
  • Conclusions presented in the order of importance;
  • A brief narrative on the financial institution’s condition and risk profile, including assigned regulatory component and composite ratings;
  • A discussion of the adequacy of the financial institution’s risk management practices;
  • Prominent notice of any issues of supervisory concern or warranting corrective action; and
  • Signatures of the board of directors acknowledging receipt and review.

As with the recent FFIEC’s guidance regarding Home Mortgage Disclosure Act rules (as discussed in our prior blog post), the Policy Statement is an important resource for financial institutions interacting with the FFIEC member agencies.

Copyright © by Ballard Spahr LLPNational Law Review, Volume IX, Number 70

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About this Author

Elanor Mangin, Ballard Spahr Law Firm, Philadelphia, Finance and Litigation Law Attorney
Associate

Elanor A. Mulhern handles complex commercial litigation with an emphasis on consumer finance litigation and defending individual and class action lawsuits brought by consumers in the area of data and privacy security. In addition, Elanor has experience in civil ligation related to patents, trademark, copyright, and contract litigation. In 2014, she participated in a multimillion dollar federal court trial disputing the reasonable royalty rates on standards essential patents.  

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