Risk Management Manual of Examination Policies - FDIC

REPORT OF EXAMINATION INSTRUCTIONS Section 16.1
PURPOSE
RISK MANAGEMENT ASSESSMENT
This page is used to concisely detail risk management deficiencies, recommendations, and related management
responses that do not rise to the level of significance to be detailed on the ECC page, but are material enough to
include within the Report. Significance can be determined by how relevant each deficiency and recommendation is
in relation to supporting/justifying the CAMELS component ratings assigned.
GENERAL
Each question can be answered three ways: “Yes,” “No,” or “Generally, yes.” In 1- and 2-rated institutions, it is
expected that most answers will either be “Yes” or “Generally, yes.”
“Yes” answers require no further narrative.
“Generally, yes” answers may be appropriate when risk management weaknesses are identified or apparent
violations are cited that do not rise to the level of significance to be addressed on the ECC page. Comments
regarding these items should be concise and include management’s response.
“No” answers will primarily be supported by commentary on the ECC page, not with commentary on the RMA
page. (The RMA page comment would simply highlight the weakness and refer the reader to the ECC page.)
Note that in some cases, coverage of related matters will be split between the ECC and RMA pages. Example: A
bank’s Loan Policy is inadequate for several primary reasons. In addition, a number of less significant policyrelated
weaknesses are identified that, alone, would not justify considering the Policy inadequate. In this scenario,
an appropriate RMA Question #2 response is detailed below.
No. As indicated on the Examination Comments and Conclusions (ECC) page, underwriting and
credit administration relating to acquisition and development lending are deficient. Additionally,
the Loan Policy could be strengthened by:
• Addressing minimum documentation requirements relating to home lending;
• Developing minimum liquidity and net worth requirements for unsecured lending; and,
• Modifying accounts receivable lending guidance to be consistent with actual practices.
President Smith agreed to modify the Loan Policy.
RISK MANAGEMENT QUESTIONS
Note: The listings shown under each question are for illustrative purposes only and are not all-inclusive.
DSC Risk Management Manual of Examination Policies 16.1-11 Report of Examination Instructions (12-04)
Federal Deposit Insurance Corporation