If Only We Knew...

One by one, we've been making contact and holding conversations with examiners from all the authorities-FDIC, Fed, OTS, and OCC. What we are learning disturbs us.

Each one of them seems to be concentrating on something different-depending on the day and the area! For instance, the OCC may be looking for details in compliance on the Community Reinvestment Act, while OTS may be concentrating on compliance in Bank Secrecy. Fed examiners could be giving close scrutiny to Reg. D while FDIC may be hunting for Bank Protection Act violations. In a different part of the country, all of these concentrations might be reversed.

In the meantime, one of the examiners not only did not check out BPA compliance, she didn't even know the regulation had been changed. Another asked me for a good contact in Treasury where he could get answers to his questions about Currency Transaction Reports. He was not sure of his understanding.

We are trying to determine the "hot" areas in the coming year, and will continue our dialogue with various examiners, but would like to pass on a few things we've learned along the way.

Examiners who have not spent years in banking before joining one of the agencies are at a disadvantage. Those who have been in banking may have been in specialized areas, and are unfamiliar with other areas they are expected to examine. And please also take into consideration that they spend a lot of time on the road and in the field. They could be months behind in their reading and updates-and, as you know, the regulations change frequently. There is a strong possibility that you, the experienced banker, are more up-to-date and much surer of your ground than the examiner. This, in some instances, can make the examiner insecure and defensive.

Don't assume the examiner knows as much as you do about all the details he or she has to check. But by the same token, don't "show up" the individual. Simply communicate with a "Well, the way I understand it is..."- "However, that may have changed. The last thing I got on that is here..."

Not only will you eliminate the possibility of being written up and having to explain something that has been targeted in error, you will also have assisted the examiner. They're grateful for this kind of treatment.

As far as the "hot" areas go, they're hard to pin down. It is the lucky financial institution that has a hard working compliance person who keeps current in all the areas important to the examiners. The monetary penalties are so severe now that no banker can ignore any compliance issues.

We'll keep plugging away and keep you as up-to-date as we can. In the meantime, work with your examiners. It's worth the effort.

Copyright © 1991 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 2, No. 10, 11/91