Upcoming Events

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Remote Deposit Capture
"Call The Fed" Audio-Conference
February 27, 2008, 2:00-3:00 PacificTime

What does remote deposit capture (RDC) have in common with the telegraph, telephone, fax machine, e-mail, and text messaging?  They were all new or modified forms of delivery systems.  Each one improved on the timeliness, flexibility, and capacity of transferring information.  RDC provides banks and/or customers with a means to electronically transmit a check for processing instead of physically transporting the check by hand, courier or mail.

Many institutions either have implemented an RDC solution or are considering RDC solutions to enhance customer convenience, shorten clearing and settlement times, increase operational efficiency and improve access to customer market shares beyond branch and ATM networks.  While there are many potential benefits, RDC may also present potential risk exposures to the institution that require further analysis.

Senior Manager George Mori will share his views on the inherent risks and control practices to consider in managing RDC for your organization.  Poor planning, management and implementation of RDC could result in:

• Reputational risk from customer dissatisfaction or information security breaches;
• Financial losses from fraud, errors, and credit risk; and
• Legal risk from noncompliance with regulations and/or industry standards.  

• Presentation materials (PDF - 155KB)
  
• Media-On-Demand audio presentation of the event
  (Flash Player required) (SWF - 137KB)

Consumer Compliance Hot Topics
"Call The Fed" Audio Conference
November 28, 2007, 2:00-3:00 p.m. Pacific time

Consumer protection is hot! With consumer issues in the forefront of the news these days, compliance with consumer laws and regulations is subject to a higher level of scrutiny than ever. As regulators, we regularly see a variety of issues that provide compliance challenges for bankers. With that in mind, this session covered a few topics that we've encountered in the Twelfth District that you want to be aware of. These included:

• Flood insurance -  A perennial challenge, flood insurance violations show no signs of subsiding and the Agencies continue to assess civil money penalties. We focused on the issue of flood insurance and "blanket" or "gap" insurance policies. Does your bank utilize a bank-owned blanket policy to force place flood insurance? If so, you'll want to be sure to hear about the compliance issues associated with this practice.
• CRA - The proposed interagency Q&A contains some guidance that will have a significant impact on banks subject to the Intermediate Small Bank test. Learn all about the proposed Q&A guidance and get tips on managing your institution's CRA program.
• Fair Lending - Does your institution engage in indirect auto lending? Do you think you're the creditor? Are you sure? If you answered yes to any of these questions, you won't want to miss this presentation on indirect auto lending so that you can steer clear of fair lending woes.

This session was lead by management from the Reserve Bank's Consumer Compliance examination unit, including Compliance Managers Stephen DeLay, John Byrd, and Cecilia Knowles. It was geared primarily to compliance staff and CRA Officers.

Materials

• Presentation materials (PDF - 376KB)
• Media-On-Demand audio presentation of the event
  (Internet Explorer required)
  • Windows Media version (streaming 140K)
    Please note: the file will be fully interactive only after the it has finished downloading, which may take up to five minutes.

How confident are you of the amount of loan loss allowance at your bank and the rationale to support them? Do you know the common pitfalls and misperceptions that bankers have about the allowance? Are you looking for ways to strengthen the governance of your ALLL program? What are the risks associated with not complying with GAAP and supervisory guidance?

Senior Banking Analyst Walter Yao shared his observations on the common pitfalls, misperceptions, and sound practices regarding various aspects of the loan loss allowance. He discussed the interagency policy statement on the Allowance for Loan and Lease Losses issued by the regulatory agencies on December 13, 2006, which replaces and revises the 1993 statement and lays out supervisory expectations for banking institutions' loan loss allowance practices. In addition, he addressed some of the most frequently asked questions related to the allowance and answer your questions.

The session is geared primarily toward Chief Credit Officers/Chief Financial Officers and their staff, and also might be of interest to other senior management and directors.

This is a 30 to 35 minute presentation followed by Q&A.

Materials:

• Presentation materials (PDF - 324KB)
• Allowance for Loan and Lease Losses Job Aid (PDF - 70KB)
• Media-On-Demand audio presentation of the event
  (Internet Explorer required)
  • Windows Media version (streaming 140K)
    Please note: the file will be fully interactive only after the it has finished downloading, which may take up to five minutes.

Financial institutions play an important role in providing credit for business and real estate development. However, the level of Commercial Real Estate (CRE) concentrations has increased significantly in recent years and history has shown that CRE markets can experience fairly rapid changes. The ability of institutions to withstand difficult market conditions will depend heavily on the adequacy of their risk management practices and capital. Accordingly, the Federal Reserve and other banking regulatory agencies recently issued interagency guidance to remind institutions that strong risk management practices and appropriate levels of capital are important elements of a sound CRE lending program.

Credit Risk Coordinator John Kandaris discussed the interagency guidance and the supervisory expectations for managing CRE concentration risks. John addressed some of the misconceptions about the guidance and shared examples of the range of risk management practices currently in place.

This session is geared primarily towards chief credit officers and risk management staff, and might also be of interest to bank management and directors.

Materials:

• Presentation materials (PDF - 150KB)
• SR 07-1 "Interagency Guidance on Concentrations in Commercial Real Estate"
• Media-On-Demand audio presentation of the event
  (Internet Explorer required)
  • Windows Media version (streaming 140K)
    Please note: the file will be fully interactive only after the it has finished downloading, which may take up to five minutes.

The Home Mortgage Disclosure Act: Tips From the Field for Getting the Data Right
"Call The Fed" Audio Conference
November 29, 2006, 2:00-3:00 PST

Home Mortgage Disclosure Act (HMDA) data is used to evaluate both banks' fair lending and Community Reinvestment Act performance. Submitting inaccurate data can result in costly and time-consuming resubmissions and possibly even the imposition of civil money penalties. Accordingly, it's essential that the data be accurate. For this "Call the Fed" audio-conference, Ariane Smith, Compliance Risk Coordinator, discussed key elements of HMDA compliance. The session addressed regulatory requirements and common violations and provided best practices to help ensure that the data is right the first time, every time. Ariane also discussed ways to use the data to evaluate a bank's own lending performance.

This session was geared primarily toward lending and fair lending compliance staff and CRA Officers.

Materials:

• Presentation materials (PDF - 176KB)
• Media-On-Demand audio presentation of the event
  (Internet Explorer required)
  • Windows Media version (streaming 110K)
    Please note: the file will be fully interactive only after the it has finished downloading, which may take up to five minutes.

Are you sure that it is your bank customer communicating with your bank or could someone be impersonating your customer? In these busy times, more bank customers than ever before are using online banking and telephone banking services for their retail and commercial transactions. As information technology (IT) rapidly advances, IT controls have to regularly evolve to remain effective. Are your e-banking controls still sufficient to protect the confidentiality of your customers’ information and to ensure the integrity of customer transactions?

For the August "Call the Fed" Audio-Conference, Operations Risk Coordinator George Mori will discuss SR letter 05-19, "Interagency Guidance on Authentication in an Internet Banking Environment." Updated guidance was needed because single-factor authentication exploitations frequently are used to commit account fraud and identity theft, and could be used for money laundering. Institutions are expected to comply by year-end 2006.

The presentation will discuss the need for risk-based assessments, customer awareness, and reliable security measures to protect customers accessing bank services remotely. The objective is to appropriately authenticate customers conducting high-risk transactions. Although the updated guidance focuses on risks and risk management techniques for internet banking, the principles are applicable to all forms of electronic banking, including telephone banking.

This presentation is primarily geared toward bank information security officers, chief information officers, and senior management.

Materials:

• Presentation materials (PDF- 231)
• Media-On-Demand audio presentation of the event
  (Internet Explorer required)
  • Windows Media version (streaming 110K)
    Please note: the file will be fully interactive only after the it has finished downloading, which may take up to five minutes.
• Link to SR 05-19: "Interagency Guidance on Authentication in an Internet Banking Environment" (off-site)
• FFIEC Frequently Asked Questions on Authentication (PDF - 25KB)

For the May "Call the Fed" audio conference, Rick Miller, Discount Officer and Director of Credit and Risk Management, will discuss the role of the discount window under the primary credit facility introduced in 2003. Primary credit established the discount window as a contingent funding source for financial institutions of all sizes and brought the discount window back to its historic roots as a tool to advance monetary policy goals. Since the introduction of primary credit, the Federal Reserve continues to face the challenge of changing long held views by some bankers and regulators that borrowing from the Fed is in some way a negative reflection on the borrowing institution. This "stigma" is a relic from the decades-long role of the Federal Reserve as the "lender of last resort."

This session will be geared primarily towards CFO's, funding managers, and senior federal and state bank examiners.

Materials:

• Media-On-Demand audio presentation of the event
  (Internet Explorer required)
  • Windows Media version (streaming 110K)
  
  Please note: the file will be fully interactive only after it has finished downloading, which may take up to five minutes.
• Presentation slides (PDF - 52KB)

For the March "Call the Fed" Audio-Conference, Dan Fineman, Senior Financial Analyst, will discuss foreign financial institutions' rapidly growing investments in Asian banks. Dan will offer his views on the boom in offshore investment in Chinese banks and comment on prospects for cross-border investments of banks in India, Japan, Korea and Taiwan. The session will bring you up-to-date on relevant developments in Asian banking, and aid you in making strategic decisions in the region

This session will be geared primarily toward senior bank executives and account officers with international business clients.

Materials:

• Media-On-Demand audio presentation of the event (Internet Explorer required)
  • Windows Media version (streaming 110K)
• Presentation slides (PDF - 147KB)

Flood insurance violations are not just a compliance risk, they can affect the bottom line since they expose a bank to the possible imposition of civil money penalties. For this "Call the Fed" Audio-Conference, Ariane Smith, Compliance Risk Coordinator, will discuss the key elements of flood insurance compliance. The session will address regulatory requirements and common violations and provide best practices to help you maintain a strong program. This session will be geared primarily toward lending compliance staff.

Materials:

• Presentation slides (Updated on 11/25/05)
  (PDF - 365KB)

BSA/AML: Examination Findings & Expectations
"Call the Fed" Audio Conference
September 14, 2005, 2:00-3:00 PDT

For this "Call the Fed" audio conference, Mary Hammond, BSA/AML Program Coordinator, will address some of the key elements of an effective BSA/AML compliance program and will provide insight into the examination process, including highlights of the new Interagency BSA/AML Examination Manual. The presentation will also give examples of best practices and common weaknesses noted during recent examinations. This presentation will be geared primarily towards BSA compliance staff. However senior banking executives may also find the information to be beneficial.

Materials:

• Media-on-Demand audio & video presentation of the event(Internet Explorer required)
• Presentation slides (PDF - 147KB)

Interest Rate Risk Management: What Examiners Expect
"Call the Fed" Audio Conference
June 21, 2005, 2:00 - 3:00 PST

For this "Call the Fed" Audio Conference John Robeson, Market and Liquidity Risk Coordinator, addressed examiners' risk management expectations with regard to IRR management and some typical "red flags" that examiners see that may result in examination criticism. The conference included a presentation covering the current rate environment and risks.

Materials:

• Presentation slides (PDF - 182KB).
• Streaming audio file of the conference
  (you must have RealPlayer installed to hear the conference)

New Bank Holding Company Rating System
"Call the Fed" Audio Conference
February 24, 2005, 2:00 - 3:00 PST

At this "Call the Fed" audio conference, Teresa Curran, David Reiser, and Ken Szyndel introduced the new Federal Reserve BHC rating system—"RFI/C (D)".

Materials:

• Presentation slides (PDF - 97KB)
• Streaming audio file of the conference
  (you must have RealPlayer installed to hear the conference)
• Prepared remarks to accompany slides (PDF - 142KB)
• Background Information: SR Letter 04-18; Press Release; Rating System Website