Agencies | Online Services | Policies
Text Box: Bankers’ preparation is key to successful examination Text Box: The Banker’s Advocate

Page 2
Text Box: June 30, 2004 Text Box: although, of course, plans can change before the team shows up on the bank’s doorstep. Open and ongoing lines of communication are critical in the process, even before the examination begins. The bank should begin preparing for an examination by having a meeting of all the top people in the institution and/or department heads. At this time, the bank president should make the assignments and compile a “To Do” list that includes responsibility delegated for each item requested in the pre-examination packet. The ease – or difficulty – of an examination is often dependent on the amount of preparation completed before the examiners Text Box: EDITOR’S NOTE: Wilks Marshall, an assistant chief examiner at the Bank Department, prepared the following piece. Wilks has been involved in the bank examination process for 23 years. When you, the bank president, receive a pre-examination letter and packet from the Bank Department, the very first thing you should do is call the Examiner in Charge (EIC) to begin a dialog. This first call can be for nothing more than just “touching base.” The discussion might cover new developments at the bank, in its market area and in the local economy. The EIC can tell you how many examiners to expect Text Box: arrive. That is the primary reason a pre-examination packet is sent. A bank president handing off the packet to someone else without later following up is not considered adequate preparation. The president must ensure all pre-examination items have been thoroughly addressed in a timely manner. All reports and materials compiled in response to the pre-examination packet should be accurate. During that first telephone call, the EIC can help you prioritize items requested in the packet, if necessary. All examinations that go smoothly and within schedule have one important thing in common – the bank is Text Box: See PREPARE, Page 3 Text Box: State bank examiners (from left) David Raymond, Evelyn Miles, Trey Clark and Kelly Victory perform various tasks during a recent examination. Text Box: HOT TOPIC Continued from Page 1

quantitative limits and clearer qualitative standards, is discussed in a Federal Reserve release at:

http://www.federalreserve.

gov/boarddocs/press/bcreg

/2004/20040506/default.ht

m

Deadline for comments is July 11, 2004.  The proposal would not affect how BHCs account for trust preferred securities on their regulatory reports filed with the Federal Reserve.  BHCs are to follow GAAP in accounting for these instruments for regulatory reporting purposes.  However, line item changes may occur.

Regulation W, which comprehensively implements Sections 23A and 23B of the Federal Reserve Act, became effective April 1, 2003.  Each institution is responsible for providing its officers and other employees enough information about Regulation W to know when a transaction may be considered a transaction with an affiliate and the procedures necessary for compliance.  Review SR 03-2 at the following web site:

http://www.federalreserve.gov/

boarddocs/

SRLETTERS/2003/

sr0302.htm

 

Comments or questions may be directed to the author at:        bhc@banking.state.ar.us

 

State Bank Department