The federal banking agencies
will accept and rely on state reports of examination in all cases
in which it is determined that state examinations enable the federal
banking agencies to effectively carry out their supervisory responsibilities.
The following criteria may be considered, in whole or in part, by
a federal banking agency when determining the acceptability of a state
report of examination under section 10(d) of the Federal Deposit Insurance
Act:
- The completeness of the state examination report.
The state report of examination of a state-chartered, insured depository
institution or a state-chartered branch or agency of a foreign bank
should contain sufficient information to permit a reviewer to make
an independent determination on the overall condition of the institution
as well as each component factor and composite rating assigned under
the Uniform Financial Institutions Rating System used for insured
depository institutions and commonly referred to as the CAMEL rating
system or the ROCA rating system used for branches and agencies of
foreign banks.
- The adequacy of documentation maintained routinely
by state examiners to support observations made in examination reports.
- The ability over time of a state banking department
to achieve examination objectives. At a minimum, the federal banking
agencies will consider the adequacy of state budgeting, examiner staffing
and training, and the overall review and follow-up examination process
of a state banking department. Accreditation of a state banking department
by the Conference of State Bank Supervisors is among the factors that
also will be considered.
- The adequacy of any formal or informal arrangement
or working agreement between a state banking department and a federal
banking agency.
The federal banking agencies, as part of their routine
review of state examination reports, will assess the quality
and scope of the reports to determine whether they continue to meet
the above general criteria. The federal banking agencies retain the
option in cases in which a state examination report appears insufficient
or the condition of an insured institution, as indicated in the examination
report or other sources, appears to be seriously deteriorating, to
conduct a follow-up examination.
The appropriate federal banking agency and state banking
department will continue to share, discuss, and work to resolve any
problems or concerns regarding the acceptability of each other’s work
or the operation of these guidelines and the alternating examination
program, as well as other issues of mutual interest.
Issued by the Federal Financial Institutions Examination Council
June 22, 1995 (SR-95-40).
