Examination Preparation
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Examination Preparation

Representative Engagements

The smartest way to avoid burdensome post-examination requirements is to thoroughly prepare your organization for regulatory scrutiny. That means being on top of your businesses and their attendant risks; understanding existing, new and developing regulatory expectations; and communicating openly with your regulators.

 


That said, you may not always be prepared.  Some institutions may be subjected to new standards by virtue of a change of regulators, while others may be experiencing certain regulatory expectations for the first time by initiating new products and/or business lines or by virtue of an acquisition.  Promontory has the tools to assist you in identifying areas of concern and taking steps to prepare for and ease your examination experience.   When government agencies come knocking, our clients have confidence in the soundness of their policies and practice. Our expertise includes:  

  • Providing a general assessment of a bank's financial, compliance and regulatory risks, including the adequacy of risk management and controls relative to sound industry practice 
  • Assessing institutions' risk management, including capital stress testing programs, policies, and practices 
  • Identifying gaps, strengths and weaknesses, and current and prospective regulatory challenges that concern internal environment, governance and structure, risk management, and independent control functions  
  • Identifying areas of current and emerging risk that may be, or become, the subject of heightened regulatory scrutiny and/or action 
  • Performing targeted or comprehensive CAMELS-style financial, compliance, and regulatory risk assessments that cover “red flags” emanating from: 
    • Asset and revenue growth  
    • Balance sheet and income statement changes  
    • Balance sheet symmetry, liquidity, leverage, and capital  
    • Concentrations, assets or liabilities  
    • Off-balance sheet risk exposures  
    • Risk appetite, risk selection and underwriting  
    • Problem asset identification and management  
    • Audit, credit review and compliance testing findings and responses  
    • Subtle messages contained in Reports of Examination and supervisory letters 
  • Advising and assisting with the preparation and implementation of a framework for improvement, including the development of corrective action plans 
  • Advising and assisting with the development of "self improvement plans" 
  • Assessing management and board supervision structure, plans, and policies  

Representative Engagements

  • Promontory conducted a mock examination for a thrift as it prepared for regulatory supervision switching from the Office of Thrift Supervision to the Office of the Comptroller of the Currency. Promontory provided a general assessment of the condition of the bank and its operations relative to the OCC’s regulatory and supervisory expectations for large national banks relative to both publicly available OCC guidance and Promontory’s knowledge of OCC expectations. The assessment included a gap analysis of the bank’s policies, procedures, programs, corporate governance, reporting, measurement and monitoring of risk, and key internal controls in the areas of credit risk management, compliance, information technology, audit, and balance sheet management. Promontory’s gap analysis resulted in a project plan with approximately 200 issues for management to address in the related areas.   
  • Promontory conducted a high-level mock examination at a subprime auto lending subsidiary of a larger entity as it prepared for its first in-depth examination by the Federal Reserve as a result of a change in regulatory supervision at its holding company level. The mock examination focused on policies, procedures, practices, reporting, and corporate governance as they related to retail credit risk management, BSA/AML, consumer compliance, market risk, and audit. Promontory provided a high-level presentation and action plan to management of the subsidiary and the holding company about the gaps found relative to the Federal Reserve’s regulatory and supervisory expectations for large, complex banking organizations and their subsidiaries.  
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