FFIEC issues final update for Examination Modernization Project

Bank Regulatory Federal Issues Agency Rule-Making & Guidance FFIEC Examination Community Banks Supervision

On January 21, the Federal Financial Institutions Examination Council (FFIEC) issued a statement presenting the results of the final phase of its Examination Modernization Project. The project, which was initiated to identify and assess measures to improve the community bank safety and soundness examination process, sought feedback on examination processes from select supervised institutions and examiners. FFIEC released previous project updates, which focused on meaningful supervisory burden reduction and tailoring examination plans and procedures based on risk (covered by InfoBytes here). The final phase addressed feedback related to examination requests and authentication requirements for FFIEC members’ supervision systems. Identified best practices include that: (i) information requests should be risk-focused and relevant to an examination; (ii) supervised institutions should be allowed sufficient time to produce requested information; (iii) examiners should coordinate information requests among the exam team to avoid duplication and redundancy; (iv) requests should be made through an institution’s designated regulatory examination point-of-contact; and (v) requests should be clearly articulated in writing. With respect to feedback received related to authentication requirements, FFIEC noted that its Task Force on Supervision has approved a common authentication solution to allow member agencies and supervised institutions “to securely authenticate to supervision systems, while eliminating the need for multiple credentials to access regulator systems.”