FDIC TE - Section 1.1 Basic Examination Concepts and Guidelines UPDATED
ACTUAL Questions and CORRECT Answers
Why does the FDIC conduct bank exams? Ensure public confidence in the banking system and to protect the DIF
Section 10(b) and (c) of the FDI Act Empowers examiners to make a thorough examination of a bank's affairs
UFIRS stands for what? Uniform Financial Institutions Rating System
FFIEC stands for what? Federal Financial Institutions Examination Council
6 Areas Composite Ratings are Based on CAMELS - Capital, Asset Quality, Management, Earnings sufficiency, Liquidity
Position, SMR
Can banks disclose the ratings or any part of the ROE? No, not without prior consent of the regulator
Specialty Exam Areas Bank Secrecy Act (BSA), IT, Trust, Government Security Dealers, Municipal Security
Dealers, and Registered Transfer Agent
Management Disclosure of Ratings The EIC should discuss tentative ratings with management near the end of the
exam, stating that their ratings are tentative and subject to the review and final
approval by the regional director
Part 309 of the FDIC Rules and Regs Examination findings, including the composite and component ratings, are subject
to confidentiality rules
Examination letter should notify management of what? should notify management that the institution's composite rating was tentatively
downgraded and convey the expectation that management stabilize the
institution's risk profile and strengthen its financial condition. The letter should
notify management that actions taken to materially expand the institution's
balance sheet or risk profile are inconsistent with supervisory expectations. The
letter should also inform management they are required to obtain a non-objection
from the regional director before engaging in any transactions that would
materially change the institution's balance sheet composition, such as significantly
increasing total assets or volatile funding sources. If practical, state banking
departments should be included as a joint issuer of examination letters relating to
FDIC-supervised examinations.
Section 337.12 of the FDIC Rules and Regulations Exam frequency, 12 months unless conditions are met
implements Section 10(d) of the FDI Act and governs
what?
ACTUAL Questions and CORRECT Answers
Why does the FDIC conduct bank exams? Ensure public confidence in the banking system and to protect the DIF
Section 10(b) and (c) of the FDI Act Empowers examiners to make a thorough examination of a bank's affairs
UFIRS stands for what? Uniform Financial Institutions Rating System
FFIEC stands for what? Federal Financial Institutions Examination Council
6 Areas Composite Ratings are Based on CAMELS - Capital, Asset Quality, Management, Earnings sufficiency, Liquidity
Position, SMR
Can banks disclose the ratings or any part of the ROE? No, not without prior consent of the regulator
Specialty Exam Areas Bank Secrecy Act (BSA), IT, Trust, Government Security Dealers, Municipal Security
Dealers, and Registered Transfer Agent
Management Disclosure of Ratings The EIC should discuss tentative ratings with management near the end of the
exam, stating that their ratings are tentative and subject to the review and final
approval by the regional director
Part 309 of the FDIC Rules and Regs Examination findings, including the composite and component ratings, are subject
to confidentiality rules
Examination letter should notify management of what? should notify management that the institution's composite rating was tentatively
downgraded and convey the expectation that management stabilize the
institution's risk profile and strengthen its financial condition. The letter should
notify management that actions taken to materially expand the institution's
balance sheet or risk profile are inconsistent with supervisory expectations. The
letter should also inform management they are required to obtain a non-objection
from the regional director before engaging in any transactions that would
materially change the institution's balance sheet composition, such as significantly
increasing total assets or volatile funding sources. If practical, state banking
departments should be included as a joint issuer of examination letters relating to
FDIC-supervised examinations.
Section 337.12 of the FDIC Rules and Regulations Exam frequency, 12 months unless conditions are met
implements Section 10(d) of the FDI Act and governs
what?
