The Federal Financial Institutions Examination Council (FFIEC) released its second update on its Examination Modernization Project this week, following one from March of this year. According to the FFIEC, further action and additional updates may be needed as the project progresses.
The most recent update provides common risk tailoring principles and practices used by federal regulators, NCUA, Federal Reserve Board, Federal Deposit Insurance Corp. and Office of the Comptroller of the Currency, as well as FFIEC’s State Liaison Committee when risk tailoring examinations.
Common risk tailoring principles and practices include:
Federal and state regulators will clarify if needed, any issued guidance with examination staff. At the beginning of the examination, examiners should reach out to the credit union’s management to discuss the examination plan and rationale for the tailored risk focus areas.
Based on the principles of the Examination Modernization Project examiners, if they haven’t done so already, will: