WASHINGTON The Federal Deposit Insurance Corp. began using a streamlined exam report form Wednesday that, it said, will let well-managed, community banks review their results more quickly.
About 2,000 of the 5,700 banks and thrifts supervised by the agency qualify for the Abbreviated Small Bank Report of Examination. The FDIC said the simplified form also will benefit the agency by reducing paperwork and helping examiners spend more time probing higher-risk banks. Onsite exam procedures will not change, however.
A bank qualifies if it has less than $250 million of assets; has a composite Camels rating of 1, the highest possible score; and a 1 or 2 rating for each of the six Camels categories, such as asset quality and management. The bank also must have operated with federal deposit insurance coverage for at least three years and cannot be a niche or specialty institution.
The simplified form includes exam conclusions, assessments of risk management practices, information technology, and Bank Secrecy Act compliance, said Mark S. Schmidt, the agencys associate director of supervision.
Examiners are to write a brief statement on how banks have met each of the Camels requirements, leaving out information such as detailed explanations of capital ratio calculations and trends on loan-loss reserves. All those numbers would do is confirm what we already know, so we are taking them out, Mr. Schmidt said.
Banks balance sheet data and income statements also were eliminated from the simplified form because this information is available elsewhere, such as on banks Internet sites and in call reports, he said.
The changes will cut the number of report pages in half to a maximum of eight. Examiners are expected to spend between one and two days writing the shorter reports, instead of the typical three days, he said.
Charlotte Bahin, director of regulatory affairs for Americas Community Bankers, said the new form is a welcome change, and that roughly 500 of its 1,250 member banks would qualify.
Officials at the Independent Community Bankers of America said their members likewise are in favor of the new form. The bankers believe that a streamlined report will focus better on items of critical importance, said Karen M. Thomas, the groups director of regulatory affairs. For Camel 1-rated banks, the concerns are very minimal anyway.
