POR IMMEDIATE RELEASE PR-73-88 (4-11-88)
FDIC CHAIRMAN SEIDMAN PROPOSES NEW APPROACH
TO COOPERATIVE STATE-FEDERAL EXAMINATION PROGRAM
Federal Deposit Insurance Corporation Chairman L. William Seidman
today told the Conference of State Bank Supervisors that broader
acceptance and use of state bank examinations would build upon existing
cooperative programs while helping the FDIC achieve its goal of more
frequent on-site examinations of institutions demonstrating deteriorating
trends.
"Our goal is to conduct on-site examinations of all state nonmember
banks rated 3, 4, and 5 at least annually, and 1 and 2 rated banks at
least every two years. As it relates to 1, 2, and 3 rated banks, our
proposal would envision treating many examinations conducted by state
examiners as our own," Mr. Seidman said. "Where state examinations are
accepted as our own, FDIC presence in these banks for full-scope
examinations would be delayed."
Mr. Seidman estimated that reliance on state examinations could
extend the period between full scope FDIC examinations up to two years for
1 and 2 rated banks, and an additional one year for 3 rated institutions.
The specific arrangements would depend upon examination schedules
developed jointly by each state and the appropriate FDIC examination
personnel.
"This is an informal process not based on set rules. It emphasizes
results," Mr. Seidman said. "The FDIC has general guidelines that will
guide us as we talk with you— but we will be dealing with each state on
the basis of its own situation."
-more-
FEDERAL DEPOSIT INSURANCE CORPORATION, 550 Seventeenth St., N.W., Washington, D.C. 20429 • 202-898-6996
FDIC CHAIRMAN SEIDMAN PROPOSES NEW APPROACH
TO COOPERATIVE STATE-FEDERAL EXAMINATION PROGRAM
Federal Deposit Insurance Corporation Chairman L. William Seidman
today told the Conference of State Bank Supervisors that broader
acceptance and use of state bank examinations would build upon existing
cooperative programs while helping the FDIC achieve its goal of more
frequent on-site examinations of institutions demonstrating deteriorating
trends.
"Our goal is to conduct on-site examinations of all state nonmember
banks rated 3, 4, and 5 at least annually, and 1 and 2 rated banks at
least every two years. As it relates to 1, 2, and 3 rated banks, our
proposal would envision treating many examinations conducted by state
examiners as our own," Mr. Seidman said. "Where state examinations are
accepted as our own, FDIC presence in these banks for full-scope
examinations would be delayed."
Mr. Seidman estimated that reliance on state examinations could
extend the period between full scope FDIC examinations up to two years for
1 and 2 rated banks, and an additional one year for 3 rated institutions.
The specific arrangements would depend upon examination schedules
developed jointly by each state and the appropriate FDIC examination
personnel.
"This is an informal process not based on set rules. It emphasizes
results," Mr. Seidman said. "The FDIC has general guidelines that will
guide us as we talk with you— but we will be dealing with each state on
the basis of its own situation."
-more-
FEDERAL DEPOSIT INSURANCE CORPORATION, 550 Seventeenth St., N.W., Washington, D.C. 20429 • 202-898-6996