Risk Management Manual of Examination Policies - FDIC

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REPORT OF EXAMINATION INSTRUCTIONS Section 16.1 QUESTION 2 The purpose of the question is to: • Assist in determining compliance with reporting requirements of Section 7(j) of the FDI Act. • Assist in determining or assessing the extent of interbank activity, and assist in understanding relationships between entities and their management teams. • Review insider relationships, when applicable. • Assist in determining or assessing direct or indirect control issues, asset quality, and dividend requirements of other entities. • Generate information necessary for bank correspondence file cross-referencing. This data is used to verify the accuracy of information at other institutions. References: Section 7(j) of the FDI Act Section 23A of the Federal Reserve Board Bank Holding Company Act Banking Act of 1933 (Refer to the Related Organizations section of the Manual) QUESTION 3 The purpose of the question is to: • Determine compliance with applicable laws and regulations. • Assist in reviewing legal lending limits. • Assist in determining asset quality. • Assist in determining concentrations. • Assist in reviewing potential conflicts of interest. • Identify "straw" borrowers, also known as "bogus" or "pass through" borrowers. If loan proceeds went to the benefit of a person other than that named on the note, or otherwise disclosed in bank records, it may be applied to the benefiting parties' aggregate debt for legal lending limit purposes. References: Regulation O of the Federal Reserve Board Part 353 of the FDIC Rules and Regulations Criminal Violations section of the Manual QUESTION 4 The purpose of the question is to: • Determine compliance with applicable laws and regulations. • Assist in reviewing potential conflicts of interest and/or preferential treatment. • Assist in determining the extent of such activities, and assist in better understanding the entities' business relationships with each other. • Assist in reviewing asset quality. • Assist in determining concentrations in this type of lending. • Allow for the appropriate cross-referencing of files and verification of data at other institutions Note: In larger institutions, examiners may want to request only executive officers' extensions of credit. References: Regulation O of the Federal Reserve Board Section 106(b)(2) of the Bank Holding Company Act Part 349 of the FDIC Rules and Regulations (may be violation at other entity) Report of Examination Instructions (12-04) 16.1-52 DSC Risk Management Manual of Examination Policies Federal Deposit Insurance Corporation
REPORT OF EXAMINATION INSTRUCTIONS Section 16.1 QUESTION 5 The purpose of the question is to: Part 337 of the FDIC Rules and Regulations • Determine the extent, and allow for the review, of insider transactions. • Assist in determining that such transactions have not resulted in harm to the institution. Transactions may include arrangements such as equipment leases, leasing of bank premises, and insiders providing institution-related services such as appraisals, IT services, legal services, and insurance. References: Fraud section of the Manual Criminal Violations section of the Manual Management section of the Manual QUESTION 6 The purpose of the question is to: • Assist in reviewing potential conflicts of interest. • Assist in determining if such transactions have an adverse affect on the institution. • Assist in reviewing potential misapplication of funds. • Assist in determining "tying arrangements" that are prohibited under Section 106 of the Bank Holding Company Act of 1956. Reference: Related Organizations section of the Manual QUESTION 7 The purpose of the question is to: • Assist in reviewing potential conflicts of interest. Reference: Transmittal Number 99-029, Complaints Against Accountants QUESTION 8 The purpose of the question is to: • Determine compliance with applicable laws and regulations (regarding "Golden Parachute" payments). • Determine potential abuse resulting from excessive compensation. • Determine potential adverse impact on future profitability. • Assist in checking accuracy of accounting issues and financial statement representation (that is, if the institution has booked appropriate liabilities). This question looks for potential payments that may meet the definition of a golden parachute payment as defined by Section 18(k) of the FDI Act. Such payment may be prohibited should the institution become "troubled.” The information provided by the response to this question may also be used to review for excessive compensation. DSC Risk Management Manual of Examination Policies 16.1-53 Report of Examination Instructions (12-04) Federal Deposit Insurance Corporation
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DSC Risk Management Manual of Exami
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INDEX Section 0.1 Policies, Procedu
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INDEX Section 0.1 Liquidity Managem
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INDEX Section 0.1 Introduction 14.1
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BASIC EXAMINATION CONCEPTS AND GUID
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CAPITAL Section 2.1 INTRODUCTION Pu
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CAPITAL Section 2.1 Interests in As
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CAPITAL Section 2.1 the holder prio
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CAPITAL Section 2.1 • Qualifying
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CAPITAL Section 2.1 application sub
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CAPITAL Section 2.1 may leave the b
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CAPITAL Section 2.1 procedures empl
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CAPITAL Section 2.1 growth and rema
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ASSET QUALITY Section 3.1 INTRODUCT
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LOANS Section 3.2 INTRODUCTION The
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LOANS Section 3.2 Qualifications of
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LOANS Section 3.2 to the ALLL), an
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LOANS Section 3.2 PORTFOLIO COMPOSI
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LOANS Section 3.2 • Require reaso
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LOANS Section 3.2 Internal Controls
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LOANS Section 3.2 continue to suppo
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LOANS Section 3.2 board of director
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LOANS Section 3.2 the institution's
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LOANS Section 3.2 such as for lives
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LOANS Section 3.2 Classification Gu
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LOANS Section 3.2 checks; terms in
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LOANS Section 3.2 • Sublicensee B
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LOANS Section 3.2 similar propertie
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LOANS Section 3.2 policies and proc
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LOANS Section 3.2 Moreover, since t
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LOANS Section 3.2 generally should
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LOANS Section 3.2 exercise control
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LOANS Section 3.2 Problems in this
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LOANS Section 3.2 that reveal other
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LOANS Section 3.2 Other loans of qu
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LOANS Section 3.2 be determined whe
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LOANS Section 3.2 time period elaps
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LOANS Section 3.2 individual apprai
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LOANS Section 3.2 controls over its
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LOANS Section 3.2 consistent with t
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LOANS Section 3.2 such funds, the m
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LOANS Section 3.2 security interest
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LOANS Section 3.2 unambiguous terms
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LOANS Section 3.2 Trustees are sele
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LOANS Section 3.2 be valid but cert
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LOANS Section 3.2 Overview of the S
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LOANS Section 3.2 Although some ins
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LOANS Section 3.2 • Portfolio gro
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LOANS Section 3.2 pricing decisions
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LOANS Section 3.2 trends, condition
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LOANS Section 3.2 provide additiona
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SECURITIES AND DERIVATIVES Section
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CASH AND DUE FROM BANKS Section 3.4
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CASH AND DUE FROM BANKS Section 3.4
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PREMISES AND EQUIPMENT Section 3.5
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PREMISES AND EQUIPMENT Section 3.5
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OTHER REAL ESTATE Section 3.6 Under
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OTHER ASSETS AND LIABILITIES Sectio
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OFF-BALANCE SHEET ACTIVITIES Sectio
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MANAGEMENT Section 4.1 INTRODUCTION
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MANAGEMENT Section 4.1 consequently
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MANAGEMENT Section 4.1 overdue, ren
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MANAGEMENT Section 4.1 money launde
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MANAGEMENT Section 4.1 management l
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MANAGEMENT Section 4.1 • An adequ
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MANAGEMENT Section 4.1 • Troubled
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MANAGEMENT Section 4.1 management i
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INTERNAL ROUTINE AND CONTROLS Secti
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RELATED ORGANIZATIONS Section 4.3
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RELATED ORGANIZATIONS Section 4.3 c
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RELATED ORGANIZATIONS Section 4.3 U
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RELATED ORGANIZATIONS Section 4.3 i
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RELATED ORGANIZATIONS Section 4.3 A
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RELATED ORGANIZATIONS Section 4.3 c
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RELATED ORGANIZATIONS Section 4.3 S
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RELATED ORGANIZATIONS Section 4.3 w
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RELATED ORGANIZATIONS Section 4.3 r
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RELATED ORGANIZATIONS Section 4.3 A
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FIDELITY AND OTHER INDEMNITY PROTEC
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VIOLATIONS OF LAWS AND REGULATIONS
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VIOLATIONS OF LAWS AND REGULATIONS
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MISCELLANEOUS BANKING ACTIVITIES Se
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EARNINGS Section 5.1 structure will
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EARNINGS Section 5.1 demand is low)
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EARNINGS Section 5.1 2. Certain dir
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EARNINGS Section 5.1 capital and al
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LIQUIDITY AND FUNDS MANAGEMENT Sect
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SENSITIVITY TO MARKET RISK Section
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BANK SECRECY ACT, ANTI-MONEY LAUNDE
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BANK FRAUD AND INSIDER ABUSE Sectio
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SUSPICIOUS ACTIVITY AND CRIMINAL VI
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INTERNATIONAL BANKING Section 11.1
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APPLICATIONS Section 12.1 Effective
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APPLICATIONS Section 12.1 for compa
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APPLICATIONS Section 12.1 be tantam
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APPLICATIONS Section 12.1 accept sh
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APPLICATIONS Section 12.1 consideri
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APPLICATIONS Section 12.1 accepted
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APPLICATIONS Section 12.1 The FDIC
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APPLICATIONS Section 12.1 employee
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APPLICATIONS Section 12.1 including
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APPLICATIONS Section 12.1 Branch cl
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APPLICATIONS Section 12.1 its accep
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APPLICATIONS Section 12.1 examinati
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MEMORANDUMS OF UNDERSTANDING Sectio
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CIVIL MONEY PENALTIES Section 14.1
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CMP MATRIX (Continued) Points Sugge
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FORMAL ADMINISTRATIVE ACTIONS Secti
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Page 465 and 466: REPORT OF EXAMINATION INSTRUCTIONS
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Examination Conclusions and Comment
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Examination Conclusions and Comment
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Risk Management Assessment 99999 1.
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Violations of Laws and Regulations
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Information Technology Assessment (
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Fiduciary Activities Assessment (Co
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Comparative Statements of Financial
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Recapitulation of Securities 99999
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Items Subject to Adverse Classifica
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Analysis of Loans Subject to Advers
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Assets with Credit Data or Collater
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Capital Calculations 99999 Tier 1 C
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Comparative Statements of Income an
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Extensions of Credit to Directors/T
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Confidential - Supervisory Section
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In-House Information Technology 999
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Directors/Trustees and Officers 999
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INTERNATIONAL REPORT PAGES AND WORK
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Analysis of the Country Exposure Ma
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International Loans, Acceptances, a
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International Loans, Acceptances, a
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Foreign Exchange Activities 99999 N
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Position Analysis - Other Currencie
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Revaluation and Income/Loss Analysi
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Policy and Procedures 99999 1. (a)
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Policy and Procedures (Continued) 9
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Audit and Internal Controls - Inter
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Parallel-Owned Banking Organization
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REPORT OF INVESTIGATION INSTRUCTION
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FDIC Report of Investigation THIS R
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Description of the Transaction INVE
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FINANCIAL HISTORY AND CONDITION Ass
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FINANCIAL HISTORY AND CONDITION (Co
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ADEQUACY OF THE CAPITAL STRUCTURE G
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ADEQUACY OF THE CAPITAL STRUCTURE (
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FUTURE EARNINGS PROSPECTS Assess th
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FUTURE EARNINGS PROSPECTS (Continue
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GENERAL CHARACTER OF THE MANAGEMENT
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IV. GENERAL CHARACTER OF THE MANAGE
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Interview Comments IV. GENERAL CHAR
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RISK TO THE FUNDS As a general matt
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VI. CONVENIENCE AND NEEDS OF THE CO
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OTHER PERTINENT INFORMATION If appl
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Source: Application for Federal Dep
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Service Continuity & Monitoring OTH
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Risk Management Manual of Examination Policies - FDIC

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