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Exam Response and Enforcement Remediation
Promontory’s team of experts has experience dealing with examination response on both sides of the equation. As former regulators, we know what government agencies expect from organizations, and our experience in the private sector allows us to understand the sensitive concerns of financial institutions.
We are able to:
- Advise, assist and, where possible, accelerate compliance with existing enforcement actions
- Perform "independent assessments" of management and board supervision, enterprise risk management, and any other risk or operating area (credit, compliance, capital markets, etc.), as required by enforcement actions
- Advise and assist independent compliance committees’ supervision of the compliance process for enforcement actions
- Guide and advise in the preparation of action plans to comply with the enforcement action, as well as prepare deliverables such as asset quality improvement plans, problem loan workout plans, capital plans, liquidity plans, policy development, enhanced organizational structures, stress testing regimens, and contingency plans
- Track completion to full compliance within time frames specified in the orders
- Produce documents mandated by regulatory requirements
- Review institutional responses to public and nonpublic enforcement actions
- Develop presentations for management and the board to deliver to regulators
Advise management and boards as to the content and tone of their interactions with regulators at initiation and throughout the enforcement action time frame
- Engage in communication with regulators as appropriate, advising the institution on interpreting "regulator-speak" and supervisory expectations
- Assist with legal services - referral to preferred legal partners
- Provide capital and structured solution services, including referrals to preferred partners for investment banking solutions (capital needs and structured problem asset solutions such as good/bad bank)
- A bank engaged Promontory to respond to a Memorandum of Understanding from the FDIC specifically related to management and the bank’s relationship with its parent. Promontory performed an affiliate risk assessment where it identified and assessed the risks to the bank for the functions provided by the parent company or other affiliates to the bank. This stretched into many of the business and key backroom support functions, and as a result, Promontory recommended many enhancements to the bank’s governance and oversight of the activities performed on its behalf by its parent. Promontory also performed a management review, examining the structure and adequacy of bank management and its ability to act as a stand-alone entity without support from its parent. This included identifying non-bank key management who performed work on behalf of the bank and analyzing the organizational structures and staffing adequacy across the bank.
- Promontory performed a back-end mortgage servicing review in advance of the enforcement actions issued by the regulators to the largest mortgage servicers in early 2011. The purpose was to ensure that the bank’s policies, procedures, and practices for foreclosure and related areas were consistent with regulatory expectations and that management was properly overseeing the risk in this area - identifying, measuring, monitoring, and reporting risk to senior and executive management. Promontory provided an action plan with recommendations around the adequacy of control functions, policies and procedures and the bank’s adherence thereto, vendor management, reporting, and management information systems.