Pub. 10 2019 Issue 1

www.wvbankers.org 6 West Virginia Banker Regulatory Feedback Initiative – Allow Your Voice to be Heard A MESSAGE FROM THE CHIEF EXECUTIVE By Sally Cline I f you are like most bankers, you have probably wondered if your bank is receiving the same treatment from your banking regulator as the bank down the street. Inconsistency is among the top concerns of bankers regarding bank examinations and visita- tions. Given the avalanche of new rules and requirements imposed on banks, identifying inconsistencies in how bank- ing regulations are being enforced has never been more important. Discrep- ancies could exist between different banking agencies, geographic regions or examiners within the same agency. To address these concerns, the Coalition of Bankers Associations created the Reg- ulatory Feedback Initiative (RFI) in 2011 that allows bankers to anonymously pro- vide an assessment of their most recent examination or visitation via an electronic post exam survey. Survey results are then aggregated and analyzed on a national level. The goals of the RFI are to: • Bring much needed transparency to the examination process; • Identify disconnects in the enforce- ment of bank regulations; • Expose unfair treatment by field examiners; • Provide state association advocates with empirical data to identify inconsistencies and to lobby for change; and • Generate custom reports to help member banks prepare for exami- nations. The RFI data is helping, mostly because regulators react to hard data, not to examination war stories from a single banker or to one or two anecdotes from a banking association representative. A number of years ago, the RFI data re- vealed that one region within a federal banking agency was taking an inappro- priately harsh view during Fair Lending examinations. The Coalition of Bankers Associations used the RFI data to meet with senior staff in Washington, D.C. and quickly fixed this outlier treatment. More recently, the RFI data highlighted increased discrepancies over examiner application of Appraisal and Evaluation Guidelines (FIL-82-2010) and Guidance for Managing Third-Party Risk (FIL- 44-2008) and whether they are to be applied as guidelines or requirements. The Coalition of Bankers Associations forged a partnership with FinPro in 2015 to assist in tracking and analyzing the data generated by the RFI to help banks prepare for their examinations. See page 22 for the Fall 2018 report that captures the current regulatory environment based upon results of the post exam survey. As you will see, RFI reports are a great way to learn about hot button examination issues from your peers. The more data that can be collected, the more helpful the RFI reports will be to prepare for an upcom- ing examination. The RFI uses a special website to gather banker input about recent examina- tions through online surveys a t www. allbankers.org. The surveys are brief, secure and completely confidential. The average survey completion time is less than 15 minutes, and the surveys are anonymous and cannot be tracked back to you or your institution. WVBankers is currently not an active participant in the RFI, but I would like to change that. We have a tremendous opportunity in Washington to improve the regulatory environment for banks across the country and the information provided by the RFI can play a critical role. To that point, FDIC Chairman Jelena McWilliams recently mentioned the RFI in one of her presentations and indicated that her agency needs spe- cific feedback to help accomplish her goals. One of Chairman McWilliams’ top priorities is to make sure enforce- ment is harmonized internally (within the regions) and between the agencies. My goal is for every bank to complete a survey after every safety and soundness and compliance examination or visitation to help us identify inconsistencies from agency to agency or region to region. Even if your examination went well, the Coalition of Bankers Associations needs your feedback to compare against what might be happening with other agencies or in other regions of the country. When sufficient data has been gathered from the survey, participating banks may also request a report fromWVBankers that summarizes the feedback of similarly situated West Virginia banks (based on asset size, primary federal regulator, re- gion, etc.), which can serve as a powerful resource in your exam preparation efforts. The regulatory environment is one of the biggest challenges you face today. Bank regulators have tremendous pow- er, there are few checks and balances on that power, and the confidential nature of bank examinations makes it hard to hold anyone accountable. That is why WVBankers has joined forces with bankers associations across the country to offer the Regulatory Feedback Ini- tiative. I hope that you will participate so that we can collectively improve the regulatory environment for all. 