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Examiners Will Be Focusing on Your Institution’s Riskiest Areas. Do You Know What They Are?


In the FFIEC Press Release, dated 11/27/2018, the Federal Financial Institutions Examination Council (FFIEC) provided a more formal idea of what a “risk-based exam” looks like and the factors that will help define the scope of the exam in its second update of the Exam Modernization Project released late last month.

After reviewing the risk-based exam principles and processes at the Fed, FDIC, OCC, NCUA and the State Liaison Committee, the FFIEC noted key principles including:

  • Recognizing there are financial institutions, or areas within institutions, that present low risk, and in those cases, minimum examination procedures are generally sufficient to assess the institution’s condition and risks.
  • Allocating more examination resources to higher risk areas and fewer resources to lower risk areas.
  • Considering the financial institution’s ability to identify and control risks when risk-focusing examinations.
  • Following up between examinations on institutions’ actions taken to address areas in need of improvement.

To help make sure examiners shape exams around risk-based examination principles, the agencies said examiner guidance will be reinforced or clarified.


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