FFIEC update on exam modernization project

The members of the Federal Financial Institutions Examination Council (FFIEC) have announced an update on the FFIEC's Examination Modernization Project, undertaken as a follow-up to the review of regulations under the Economic Growth and Regulatory Paperwork Reduction Act (EGRPRA). The agencies plan to focus initial efforts on four areas that have the potential for the most meaningful supervisory burden reduction:

• Highlight and reinforce regulator communication objectives before, during, and after examinations;
• Leverage technology and shift, as appropriate, examination work from onsite to offsite;
• Continue to tailor examinations based on risk; and
• Improve electronic file transfer systems to facilitate the secure exchange of information between institutions and supervisory offices or examiners.

The Examination Modernization Project is expected to be a long-term endeavor and other areas of improvement may emerge. As a first step, and to address the first theme, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, and the State Liaison Committee have each committed to issue reinforcing and clarifying guidance to examination staff about the importance of being clear and transparent to community bankers during examination processes.