Thursday, November 29, 2018

Agencies Issue Update on Examination Modernization Project

The Federal Financial Institutions Examination Council (FFIEC) issued a second update on progress made to its Examination Modernization Project.

The update focuses on regulators’ work to tailor examinations based on the risk profiles of individual institutions.

After reviewing and comparing current principles and processes for tailoring community bank and credit union examinations based on risk profile, the agencies committed to issuing reinforcing and clarifying guidance where necessary. This guidance would help ensure that examiners consider the unique risk profile, complexity and business model when developing an examination plan; analyze existing information to identify areas of higher and lower risk; and appropriately tailor document requests based on risk profile, among other things.

Going forward, the issue is how well the regulators execute their plans to tailor examinations to the risk profiles of the individual institutions.

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