©THESTAR 2024/2025 ALL RIGHTS RESERVED 12:43 PM.
FDIC TE - Section 1.1 Basic Examination
Concepts and Guidelines. Exam Questions
With Correct Answers 100% Verified.
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
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 expand the institution's
1
, ©THESTAR 2024/2025 ALL RIGHTS RESERVED 12:43 PM.
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;
• 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
How many months should a limited scope exam be scheduled after an enforcement action? -
Answer✔6 months
De Novo - Answer✔Newly chartered Insured Institutions
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FDIC TE - Section 1.1 Basic Examination
Concepts and Guidelines. Exam Questions
With Correct Answers 100% Verified.
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
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 expand the institution's
1
, ©THESTAR 2024/2025 ALL RIGHTS RESERVED 12:43 PM.
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;
• 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
How many months should a limited scope exam be scheduled after an enforcement action? -
Answer✔6 months
De Novo - Answer✔Newly chartered Insured Institutions
2
