Interagency Agreement Governing FDIC Special Examination Activities Summary

On January 29, the FDIC Board unanimously approved an interagency agreement to provide expanded examination authority for the FDIC. The agreement is titled “Coordination of Expanded Supervisory Information Sharing and Special Examinations” and was negotiated between the FDIC, OCC, Federal Reserve Board, and the OTS. The agreement describes the circumstances under which the FDIC will conduct examinations of insured depository institutions not directly supervised by the FDIC. The agreement also implements an information sharing and examination protocol for banking organizations posing a risk to the deposit insurance funds. Another component of the agreement focuses primarily on large depository institutions.

Further details of the agreement are described below:

• The agreement enables the FDIC to examine an insured depository institution if the institution
   

  > Has a CAMELS composite rating of 3, 4, or 5; OR
  > Is undercapitalized as defined under Prompt Corrective Action.

• The FDIC may seek participation in examinations or meetings with senior bank management of institutions that exhibit material deteriorating conditions or other adverse developments regardless of current rating or capital level
• The OCC, FRB and OTS will provide the FDIC with access to supervisory information such as risk assessments, reports of examination and supervisory plans for institutions that represent a heightened risk to the deposit insurance funds. The FDIC will reciprocate by providing the OCC, FRB and OTS with access to the same types of supervisory information.
• The FDIC, OCC, OTS and FRB will conduct quarterly meetings to discuss supervisory matters relating to depository institutions that represent a heightened risk to the deposit insurance funds.
• Particular attention will be focused on “Large” institutions (i.e. institutions in the OCC’s “Large Bank Program,” the FRB’s “Large Complex Banking Organization Program,” or one of several large thrifts identified by the OTS).
• The FDIC will assign a dedicated examiner to each of the eight largest banking organizations.

The federal agencies contacted CSBS to share updates with the State Banking Departments as the agreement was being developed. Also, the FDIC and FRB plan to coordinate this new policy agreement with the State Bank Departments. Contact Montrice Yakimov or Michael Carrier in the CSBS Regulatory Division for further details. They can be reached at 202-296-2840.