FDIC TE - Section 1.1 Basic Examination Concepts and Guidelines Practice Questions and Answers 100% Pass

FDIC TE - Section 1.1 Basic Examination Concepts and Guidelines Practice Questions and Answers 100% Pass Why does the FDIC conduct bank exams? - ANSWER-Ensure public confidence in the banking system and to protect the DIF Section 10(b) and (c) of the FDI Act - ANSWER-Empowers examiners to make a thorough examination of a bank's affairs UFIRS stands for what? - ANSWER-Uniform Financial Institutions Rating System FFIEC stands for what? - ANSWER-Federal Financial Institutions Examination Council 6 Areas Composite Ratings are Based on - ANSWER-CAMELS - Capital, Asset Quality, Management, Earnings sufficiency, Liquidity Position, SMR Copyright ©EMILLYCHARLOTE 2025 ACADEMIC YEAR, ALL RIGHTS RESERVED. Page 2/10 Can banks disclose the ratings or any part of the ROE? - ANSWER-No, not without prior consent of the regulator Specialty Exam Areas - ANSWER-Bank Secrecy Act (BSA), IT, Trust, Government Security Dealers, Municipal Security Dealers, and Registered Transfer Agent Management Disclosure of Ratings - ANSWER-The EIC should discuss tentative ratings with management near the end of the exam, stating that their ratings are tentative and subject to the review and final approval by the regional director Part 309 of the FDIC Rules and Regs - ANSWER-Examination findings, including the composite and component ratings, are subject to confidentiality rules Examination letter should notify management of what? - ANSWER- should notify management that the institution's composite rating was tentatively downgraded and convey the expectation that management stabilize the institution's risk profile and strengthen its financial condition. The letter should notify management that actions taken to materially Copyright ©EMILLYCHARLOTE 2025 ACADEMIC YEAR, ALL RIGHTS RESERVED. Page 3/10 expand the institution's balance sheet or risk profile are inconsistent with supervisory expectations. The letter should also inform management they are required to obtain a non-objection from the regional director before engaging in any transactions that would materially change the institution's balance sheet composition, such as significantly increasing total assets or volatile funding sources. If practical, state banking departments should be included as a joint issuer of examination letters relating to FDIC-supervised examinations. Section 337.12 of the FDIC Rules and Regulations implements Section 10(d) of the FDI Act and governs what? - ANSWER-Exam frequency, 12 months unless conditions are met Bank conditions to met in order to extend exams to every 18 months - ANSWER-•The bank has total assets of less than $3 billion; •The bank is well capitalized as defined in Section324.403(b)(1) of the FDIC Rules and Regulations; • The bank was assigned a management component rating of 1 or 2 at the most recent FDIC or applicable state examination; Copyright ©EMILLYCHARLOTE 2025 ACADEMIC YEAR, ALL RIGHTS RESERVED. Page 4/10 • The bank was assigned a composite rating of 1 or 2 at the most recent FDIC or applicable state examination; •The bank currently is not subject to a formal enforcement proceeding or order by the FDIC, OCC, or Federal Reserve System; and •No person acquired control of the bank during the preceding 12-month period in which a full-scope, onsite examination would have been required but for the above noted exceptions. End of an Exam is defined as what? - ANSWER-Earlier of the date he EIC submits the report for review or 60 calendar days from the exam start date Specialty Exam Frequency Intervals - ANSWER-Governed by RMS policy, usually should be conducted concurrently with RMS exams Risk Focused Supervision - ANSWER-Focusing resources on a bank's high risk areas Minimum Requirements of a full scope exam - ANSWER-procedures necessary to complete the mandatory pages of the ROE and evaluate all components of the UFIRS rating system Copyright ©EMILLYCHARLOTE 2025 ACADEMIC YEAR, ALL RIGHTS RESERVED. Page 5/10 How many months should a limited scope exam be scheduled after an enforcement action? - ANSWER-6 months De Novo - ANSWER-Newly chartered Insured Institutions De Novo Exam and Visitation Cycle - ANSWER-6 month visitations and 12 month full scope exam. For the first 3 years it should be yearly. The exception is if it's a subsidiary of a multi-bank holding company that is in satisfactory condition. De Novo Business plans - ANSWER-Set the stage for how the de novo will operate. If there are changes the bank should submit them to the regional office. When should an exam take place after change of ownership