Federal Financial Institutions Examination Council

A N N U A L R E P O R T 2011

Board of Governors of the Federal Reserve System, Consumer Financial Protection Bureau , Federal Deposit Insurance Corporation, National Credit Union Administration, Office of the Comptroller of the Currency, State Liaison Committee

Federal Financial Institutions Examination Council

A N N U A L R E P O R T 2011

Board of Governors of the Federal Reserve System, Consumer Financial Protection Bureau, Federal Deposit Insurance Corporation, National Credit Union Administration, Office of the Comptroller of the Currency, State Liaison Committee

MEMBERS OF THE COUNCIL

Debbie Matz, Chairman John Walsh, Vice Chairman Daniel K. Tarullo Chairman Acting Comptroller of the Currency Member, Board of Governors of the National Credit Union Administration Office of the Comptroller of the Currency Federal Reserve System

Martin J. Gruenberg Richard Cordray John Munn Acting Chairman Director Director, Nebraska Department of Federal Deposit Insurance Corporation Consumer Financial Protection Bureau Banking & Finance

LETTER OF TRANSMITTAL

Federal Financial Institutions Examination Council Arlington, VA 22226 March 30, 2012

The President of the Senate The Speaker of the House of Representatives

Pursuant to the provisions of section 1006(f) of the Financial Institutions Regulatory and Interest Rate Control Act of 1978 (12 U.S.C. § 3305), I am pleased to submit the 2011 Annual Report of the Federal Financial Institutions Examination Council.

Respectfully,

Debbie Matz Chairman

TABLE OF CONTENTS

vii Message from the Chairman 1 Overview of the Federal Financial Institutions Examination Council Operations 3 Record of Council Activities 7 State Liaison Report 9 Activities of the Interagency Staff Task Forces 23 The Federal Financial Institution Regulatory Agencies and their Supervised Institutions 32 Assets, Liabilities, and Net Worth of U.S. Commercial Banks, Thrift Institutions, and Credit Unions as of December 31, 2011 33 Income and Expenses of U.S. Commercial Banks, Thrift Institutions, and Credit Unions for Twelve Months Ending December 31, 2011 35 Appendix A: Relevant Statutes 41 Appendix B: 2011 Audit Report 51 Appendix C: Maps of Agency Regions and Districts 57 Appendix D: Organizational Listing of Personnel

v

MESSAGE FROM THE CHAIRMAN

I am pleased to report to you as the achieved through the work of the Chairman of the Federal Financial FFIEC task forces, subcommittees, Institutions Examination Council and working groups, include the (FFIEC or Council), the first time in following: almost 25 years the National Credit • Renewed emphasis on the work Union Administration has chaired of the FFIEC Appraisal Sub- the Council. committee (ASC), which saw its FFIEC member agencies include mandate substantially enhanced the Board of Governors of the Fed- as a result of the Dodd-Frank eral Reserve System, the Federal Act. At the direction of the Deposit Insurance Corporation Council principals, member (FDIC), the Office of the Comp- agencies committed to designat- troller of the Currency (OCC), the ing higher level, senior execu- National Credit Union Administra- tive members to serve on the tion (NCUA) and the State Liaison ASC, with the express intention Committee. In 2011, as a part of of providing it with a higher the Dodd-Frank Wall Street Reform level of strategic planning and and Consumer Protection Act of guidance. With the new struc- 2010 (Dodd-Frank Act), the Con- ture in place, the ASC is now sumer Financial Protection Bureau better positioned to implement FFIEC Chairman Debbie Matz (CFPB) was added as a member several new programs and agency to the Council. projects throughout 2012 and beyond: including rulemaking, In 2011, the Council itself experi- establishing an advisory com- enced significant changes. In addi- mittee, and implementing an tion to welcoming CFPB as a new appraiser hotline as required by agency member, a new acting the Dodd-Frank Act. chairman represented FDIC, and OCC absorbed the Office of Thrift • Issued a Supplement to the 2005 Supervision (OTS). These transi- Guidance on Authentication in tions, particularly the departure of an Internet Banking Environ- OTS and the installation of CFPB ment to reinforce the necessary on FFIEC task forces, provided the risk management framework Council with new perspectives and to mitigate ongoing cyber risk. insights, including a heightened Updated the Information Tech- emphasis on financial issues affect- nology Examination Handbook ing American consumers. to address ongoing risk con- cerns in the electronic banking Through the leadership of the area. Council and the supporting efforts of its task forces, we made substan- • Launched the Nationwide tive efforts to apply and imple- Mortgage Licensing System and ment certain provisions of the Registry for federally regulated Dodd-Frank Act, the most com- institutions in accordance with prehensive and significant reform the Secure and Fair Enforce- legislation affecting the financial ment for Mortgage Licensing sector in a generation. This effort Act of 2008 (the SAFE Act). will continue throughout 2012. Released related examination Notable accomplishments in 2011, procedures in late 2011.

vii • Approved an additional senior As we move forward in 2012, As Council Chairman, I remain program administrator posi- FFIEC will continue to empha- committed to advancing the mis- tion for the Examiner Education size collaborative efforts to jointly sion of FFIEC to coordinate regu- Office to continue providing draft and issue guidance and other latory reporting requirements and exceptional specialized exam- important documents to support examination procedures. Our goal iner training. the financial safety and sound- is to help our institutions and U.S. ness of our federally insured consumers achieve financial suc- • Hired a new Executive Secre- institutions as they weather the cess in 2012 and beyond. tary, a critical position for the ongoing financial challenges. Council and its staff. Managed FFIEC encourages and facilitates a seamless transition between open communication and inclu- the incumbent and the new sion among participating agency Executive Secretary. members.

viii OVERVIEW OF THE FEDERAL FINANCIAL INSTITUTIONS EXAMINATION COUNCIL OPERATIONS

The Federal Financial Institu- The Council is responsible for agencies and the former Resolu- tions Examination Council (FFIEC developing uniform reporting tion Trust Corporation; (3) main- or Council) was established on systems for federally supervised taining a national registry of March 10, 1979, pursuant to title X financial institutions, their holding appraisers who are certified and of the Financial Institutions Regu- companies, and the nonfinancial licensed by a state, and are also latory and Interest Rate Control institution subsidiaries of those eligible to perform appraisals in Act of 1978 (FIRIRCA), Public institutions and holding compa- federally related transactions; and Law 95-630. The purpose of title nies. It conducts schools for exam- (4) monitoring the practices, pro- X, cited as the Federal Financial iners employed by the five fed- cedures, activities, and organiza- Institutions Examination Council eral member agencies represented tional structure of the Appraisal Act of 1978, was to create a for- on the Council and makes those Foundation, a nonprofit educa- mal interagency body empowered schools available to employees of tional corporation established to prescribe uniform principles, state agencies that supervise finan- by the appraisal industry in the standards, and report forms for cial institutions. United States. the federal examination of finan- The Council was given additional cial institutions by the Board of statutory responsibilities by sec- The Secure and Fair Enforcement Governors of the Federal Reserve tion 340 of the Housing and Com- for Mortgage Lending Act of 2008 System (FRB), the Federal Deposit munity Development Act of 1980, (SAFE Act), enacted as title V of Insurance Corporation (FDIC), the Public Law 96-399. Among these the Housing and Economic Recov- National Credit Union Adminis- responsibilities are the implemen- ery Act of 2008, established the tration (NCUA), and the Office of tation of a system to facilitate pub- responsibility for the federal bank- the Comptroller of the Currency lic access to data that depository ing agencies, through the FFIEC (OCC) and to make recommenda- institutions must disclose under and in conjunction with the Farm tions to promote uniformity in the the Home Mortgage Disclosure Act Credit Administration (FCA), to supervision of financial institu- of 1975 (HMDA) and the aggre- develop and maintain a system for tions. To encourage the application gation of annual HMDA data, by registering employees of deposi- of uniform examination principles census tract, for each metropolitan tory institutions and certain of and standards by the state and statistical area. their subsidiaries’ loan origina- federal supervisory authorities, tors with the Nationwide Mort- the Council established, in accor- Title XI of the Financial Institutions gage Licensing System and Regis- dance with the requirement of the Reform, Recovery, and Enforce- try (NMLSR). The SAFE Act and statute, an advisory State Liaison ment Act of 1989 established the implementing regulations require Committee (SLC). In accordance Appraisal Subcommittee within certain information about loan with the Financial Services Regu- the Council. The functions of the originators to be furnished to the latory Relief Act of 2006, the Chair subcommittee are (l) monitor- NMLSR information concerning of the State Liaison Committee ing the requirements, including a an employee’s identity, including: was added as a voting member code of professional responsibility, (A) fingerprints for submission to of the Council in October 2006. In established by states for the certi- the Federal Bureau of Investiga- accordance with the Dodd-Frank fication and licensing of individu- tion and any governmental agency Wall Street Reform and Consumer als who are qualified to perform or entity authorized to receive Protection Act of 2010, the Director appraisals in connection with such information for a state and of the Consumer Financial Protec- federally related transactions; national criminal history back- tion Bureau (CFPB) was added as (2) monitoring the appraisal stan- ground check; and (B) personal a voting member of the Council in dards established by the federal history and experience, includ- July 2011, replacing the Director of financial institution regulatory ing authorization for the NMLSR the former Office of Thrift Super- to obtain information related to 1 any administrative, civil, or crimi- vision (OTS). ber of the Council until July 21, 2011, when the functions of the OTS were nal findings by any governmental 1. The Director of OTS was a voting mem- transferred to the OCC. jurisdiction. The NMLSR began

1 accepting registrations on January with one of the following subject vened whenever called by the 31, 2011 and the NMLSR will be matters: Chairman or four or more Council fully operational by December 31, members. The Council’s activities • Consumer Compliance 2012. On July 21, 2011, pursuant to are funded in several ways. Most the Dodd-Frank Act, the author- • Examiner Education of the Council’s funds are derived ity for rulemaking and authority to from assessments on its five fed- develop and maintain the NMLSR • Information Sharing eral member agencies. It receives generally transferred to the CFPB. • Reports tuition fees from non-agency attendees to cover some of the The Council has six members, • Supervision costs associated with its examiner and in 2011 it was comprised of • Surveillance Systems education program. The Council a member of the FRB appointed also receives reimbursement for by the Chairman of the Board, the The Council has a Legal Advisory the services it provides to support Chairman of the FDIC, the Chair- Group (LAG), composed of the preparation of the quarterly Uni- man of the Board of the NCUA, general or chief counsel of each form Bank Performance Report. the Comptroller of the Currency, member to provide support to the Director of the OTS (until July the Council and staff in the sub- In 2011, the FRB continued to pro- 21, 2011), and the Chairman of stantive areas of concern. The vide budget and accounting ser- the SLC. The Director of the CFPB task forces and the LAG provide vices to the Council. The Council joined the council membership research and develop analytical is supported by a small, full-time upon his appointment on January papers and proposals on the issues administrative staff in its opera- 4, 2012. that the Council addresses. In tions office and in its examiner addition, the Council also has an education program, which are There are six staff task forces to Agency Liaison Group, composed located at the FDIC's L. William effectively administer the full spec- of senior officials responsible for Seidman Center in Arlington, Vir- trum of projects in the Council’s coordinating the FFIEC work of ginia. Each Council staff member functional areas, including but their respective agencies’ staff is detailed (some permanently) not limited to researching future members. from one of the five member agen- enhancements for reporting, exam- cies represented on the Council. iner training products, and exam- iner guidance. The task forces are Administration of the Council each comprised of six senior offi- cials, drawn from the five federal The Council holds regular meet- member agencies and a represen- ings at least twice a year. Other tative of the SLC. Each is tasked Council meetings may be con-

2 RECORD OF COUNCIL ACTIVITIES

The Federal Financial Institutions Examination Council in session.

The following section is a chrono- Explanation. The Council has an Explanation. The Council is logical record of the official actions interagency awards program required to approve task orders taken by the FFIEC during 2011 that recognizes individuals of the that exceed a specific dollar pursuant to the Federal Financial member agencies who have pro- amount. Task Order #7 covers Institutions Examination Council vided outstanding service to the funds for CDR enhancements to Act of 1978, as amended, and the Council on interagency projects improve Call Report processing, Home Mortgage Disclosure Act and programs during the previous public data distribution, and Uni- (HMDA). year. form Bank Performance Report processing. Task Order #7 also February 7, 2011 February 7, 2011 includes a reallocation of funds within the budget and a setting Action. Approved the issuance of Action. Approved the Central Data aside of funds for a bonus pay- the Council’s annual interagency Repository (CDR) Steering Com- ment to the contractor should awards. mittee’s Task Order #7. performance goals be met.

3 March 8, 2011 Action. Approved the 2010 annual report of the Council to the Congress. Explanation. The legislation estab- lishing the Council requires that, not later than April l of each year, the Council publish an annual report covering its activities dur- ing the preceding year.

March 8, 2011 Action. Approved the appoint- ment of six task force chairs. Explanation. The chairs for all six standing task forces are approved annually and are drawn from management and staff of the five federal member agencies and rep- resentatives of the State Liaison Chairman Matz engaged in discussions during the September 2011 Council meeting. Committee (SLC).

March 8, 2011 vided outstanding service to the sentatives of the SLC. The Council Council on interagency projects also approves any successors to fill Action. Approved re-appointment and programs during the previous an unexpired term of a departing of At-Large SLC Member, Charles year. task force chair. A. Vice, Kentucky Department of Financial Institutions September 30, 2011 Commissioner. September 2, 2011 Action. Approved a revised Explanation. The Council approves Action. Approved the appointment HMDA-Required Process Cost two of the five SLC members— of a new Executive Secretary, Allocation Model for the 2012 those who are not officially des- Judith E. Dupre. ignated by the Conference of Council budget. Explanation. The Executive Secre- State Banking Supervisors, the Explanation. The Dodd-Frank Act tary role is competitively filled by American Council of State Sav- outlines HMDA responsibilities a candidate from one of the five ings Supervisors, or the National for the newly created Consumer federal member agencies of the Association of State Credit Union Financial Protection Bureau and Council. Supervisors. removes the Office of Thrift Super- vision as a member of the Coun- cil. The cost allocation among the April 11, 2011 September 6, 2011 five federal member agencies of Action. Approved the issuance of Action. Approved the appointment the Council was adjusted to reflect the Council’s annual interagency of a new chair for the Task Force on these changes. awards for three additional Examiner Education. nominations. Explanation. The chairs for all six December 9, 2011 Explanation. The Council has an standing task forces are approved Action. Approved the 2012 Council interagency awards program annually and are drawn from man- budget. that recognizes individuals of the agement and staff of the five fed- member agencies who have pro- eral member agencies and repre- Explanation. The Council is

4 required to approve the annual budget that funds the Council's staff, programs, and activities. The Council is also required to approve new staff positions and for the 2012 budget approved the hiring of a fourth Senior Pro- gram Administrator. This position is needed due to the significant increases in the training offerings and the number of participants in the Examiner Education program over the past several years.

5

STATE LIAISON REPORT

State Liaison Committee (from the left to right) David Cotney (MA), Douglas Foster (TX), Chair John Munn (NE), Harold E. Feeney (TX), and Charles A. Vice (KY).

The State Liaison Committee SLC member may have his or her chair for 12 months. The Council (SLC) consists of five representa- two-year term extended by the elects two of the five members. tives of state regulatory agencies appointing organization for an The American Council of State that supervise financial institu- additional, consecutive two-year Savings Supervisors, the Confer- tions. The representatives are term. Each year, the SLC elects ence of State Bank Supervisors appointed for two-year terms. An one of its members to serve as (CSBS) and the National Associa-

7 tion of State Credit Union Super- visors designate the other three members. The SLC is represented on the Council’s task forces and working groups by state supervisors from around the country. The CSBS provides staff support to the SLC representatives and serves as the primary liaison to the FFIEC staff for all administrative matters. In response to their role on the Council, the SLC meets in per- son before each Council meeting to review the agenda and discuss topics of interest which may come before the Council. The mem- bers of the SLC are an important conduit to their state colleagues to advocate for the actions of the Council.

8 ACTIVITIES OF THE INTERAGENCY STAFF TASK FORCES

Task Force on Home Mortgage Disclosure Act 2011 list and lists from previous Consumer Compliance (HMDA)/CRA Data Collection years can be found on the FFIEC Subcommittee. The task force also Website, along with informa- The Task Force on Consumer creates ad hoc working groups tion about the data sources used Compliance promotes policy coor- to handle particular projects to generate the list of distressed dination, a common supervisory and assignments. The task force or underserved geographies. The approach, and uniform enforce- meets monthly to address and agencies issued the list on June 1, ment of consumer protection laws resolve common issues in com- 2011. and regulations. The task force pliance supervision. While sig- The CRA Subcommittee also identifies and analyzes emerging nificant issues or recommenda- actively explored policies regard- consumer compliance issues and tions are referred to the Council ing CRA consideration for Small develops proposed policies and for action, the Council has dele- Dollar Loan (SDL) programs. The procedures to foster consistency gated to the task force the author- subcommittee collaborated on the among the agencies. Addition- ity to make certain decisions and agencies’ approach to small-dollar ally, the task force reviews legisla- recommendations. tion, regulations, and policies at direct loan programs, partner- the state and federal level that may ships, and other initiatives that have a bearing on the compliance Initiatives Addressed in 2011 help address community credit responsibilities of the member needs in a responsive and sustain- agencies. CRA Subcommittee Activities able manner. The subcommittee will continue to engage in an inter- During 2011, the task force used The CRA Subcommittee has agency effort to support SDL pro- two standing subcommittees to tracked and made publicly avail- grams initiated through commu- help promote its mission: the able the 2011 List of Distressed or nity organization partnerships and Community Reinvestment Act Underserved Non-Metropolitan will continue to engage in research (CRA) Subcommittee and the Middle-Income Geographies. The on the issue, including an analysis of costs and benefits and determin- ing when SDL programs change consumer behavior.

HMDA/CRA Data Collection Subcommittee Activities The HMDA and CRA Data Col- lection Subcommittee benefited from the Data Collection System re-architecture which was com- pleted in 2010. The re-architecture initiative resulted in reduced data reporting and processing costs and enhanced agency access to updated HMDA and CRA data. To reflect the change in costs and agency responsibilities for HMDA data collection, the subcommittee recommended a simplified cost sharing model for HMDA budget- ary responsibilities for 2012. The Task Force on Consumer Compliance meeting. budget was presented to the Coun-

9 cil for approval on September 30, new questions and answers, one ing programs for agency examin- 2011. relating to insurable value and one ers and staff. The task force devel- relating to force placement. The ops programs on its own initiative Regulation Z (Truth in Lending) notice also withdrew one ques- and in response to requests from tion and answer regarding insur- the Council, Council task forces, The task force approved several able value. The agencies also and suggestions brought forth by sets of examination procedures significantly revised two ques- Examiner Education Office (EEO) related to Regulation Z. tions and answers regarding force staff. Each fall, task force staff pre- placement of flood insurance, and pares a training calendar based on On January 13, 2011, the task proposed to revise a previously demand from the federal member force voted to adopt Regulation finalized question and answer. agencies and state financial insti- Z Examination Procedures revi- Comments on these three revised tution regulators. The task force sions to reflect the rule changes questions and answers were due staff schedules, delivers, and eval- required by the Helping Families December 1, 2011. uates training programs through- Save Their Homes Act and Mort- out the year. In 2011, the number gage Disclosure Improvement of people who attended task force- Act. Model Privacy Notice Examination Procedures sponsored training totaled 3,164 (see the table on page 12 for details On March 10, 2011, the task force On June 9, 2011, the task force voted to adopt Regulation Z of participation by program and approved Model Privacy Notice agency). Examination Procedures revisions Examination Procedures. The to reflect rule changes required procedures address the Gramm- by changes in the Truth in Lend- Leach-Bliley Act’s provisions Initiatives Addressed in 2011 ing Act related to loan originator regarding the treatment by finan- compensation, appraisals, and cial institutions of nonpublic The Task Force on Examiner Edu- escrow accounts. personal information about con- cation has continued to ensure that the FFIEC’s educational pro- On September 30, 2011, the task sumers and the implementing reg- grams meet the needs of agency force adopted by notational vote ulations published by the federal personnel, are cost–effective, and two changes to the Regulation Z banking agencies and NCUA. are widely available. The task Examinations Procedures. First, force meets monthly with the EEO threshold adjustments were made SAFE Act Examination Procedures staff to discuss emerging topics, to to reflect exemption changes that In July 2010, the federal finan- review feedback from each course became effective in June 2011. Sec- cial agencies issued final rules and conference, and to develop a ond, technical clarifications were to implement the registration framework for future courses and added to reflect changes from of mortgage loan originators conferences. The solid partnership the Credit Card Accountability employed by banks and credit between the task force principals Responsibility and Disclosure Act unions and their subsidiaries as and the EEO staff promotes open of 2009. required by the SAFE Act. On and regular communication that October 14, 2011, the task force continues to result in high-quality, Interagency Questions & Answers approved a set of standard exami- well-received training. Regarding Flood Insurance nation procedures for compliance Specific accomplishments dur- In 2009, the FFIEC agencies, along with the SAFE Act. ing 2011 included 15 sessions of with the FCA, proposed and solic- two new courses—(1) Structured ited public comments on addi- Finance and (2) Distressed Com- tional questions and answers Task Force on mercial Real Estate. These courses regarding insurable value and Examiner Education have been added to the 2012 train- force placement issues. During ing calendar with a combined total 2010, the task force completed its The Task Force on Examiner Edu- of 19 sessions. Also since 1999, the review of the comments. After cation is responsible for overseeing FFIEC has provided training and approval by the task force and the FFIEC’s examiner education reference information to examin- agencies, a notice and request for program on behalf of the Coun- ers and the industry via the FFIEC comment was published in the cil. The task force promotes inter- InfoBase, a browser-based product Federal Register on October 17, agency education through timely, available through the FFIEC Web- 2011. The notice finalized two cost-efficient, state-of-the-art train- site. The Task Force on Examiner

10 Task Force on Information Sharing The Task Force on Information Sharing promotes the sharing of electronic information among the FFIEC agencies in support of the supervision, regulation, and deposit insurance responsibilities of financial institution regulators. The task force provides a forum for FFIEC member agencies to dis- cuss and address issues affecting the quality, consistency, efficiency, and security of interagency infor- mation sharing. Significant mat- ters are referred, with recommen- dations, to the Council for action, and the task force has delegated Task Force on Examiner Education meeting. authority from the Council to take certain actions. Education approves the develop- are available online at www.ffiec. To the extent possible, the agen- ment and maintenance of the Info- gov/exam/education.htm. cies build on each other’s infor- Base product. The InfoBase content mation databases to minimize Additionally, a printed copy of the is created and updated by mem- duplication of effort and promote 2012 course catalogue and sched- bers of the Task Force on Super- consistency. The agencies par- ule are available from the EEO. To vision’s Information Technology ticipate in a program to share, obtain a copy, contact (IT) Subcommittee and the Bank in accordance with agency pol- Secrecy Act/Anti-Money Launder- Karen K. Smith, Manager icy, electronic versions of their ing (BSA/AML) Working Group. FFIEC Examiner Education Office reports of examination, inspection In 2011, the EEO staff in conjunc- 3501 Fairfax Drive reports, and other communica- tion with the IT Subcommittee Room B-3030 tions with financial institutions. continued to coordinate revisions Arlington, VA 22226-3550 The agencies also provide each to the IT Examination Handbook other with access to their orga- InfoBase. Additionally, the EEO Phone: (703) 516-5588 nizations’ structure, as well as staff in conjunction with the BSA/ AML Working Group continued to update the BSA/AML Examination Manual InfoBase.

Facilities The FFIEC rents office space, class- rooms, and lodging facilities at the FDIC’s Seidman Center in Arlington, Virginia. This facil- ity offers convenient access to two auditoriums and numerous classrooms.

Course Catalogue and Schedule Steve Gulbrandsen instructing financial institution examiners during FFIEC’s Commercial Real The course catalogue and schedule Estate Analysis course.

11 financial and supervisory infor- munications and documents criti- the task force receives demonstra- mation on their regulated entities. cal to information sharing. tions and reports on agency, finan- The task force and its working cial industry, and other FFIEC ini- groups use a collaborative web- The task force has established tiatives pertaining to technology site to share information among three working groups to address development; including the pro- the FFIEC agencies. The task technology development issues, to duction and development status force maintains a “Data Exchange perform interagency reconciliation of the interagency Central Data Summary” listing the data files of financial institution structure Repository. exchanged among the FFIEC data, and to develop interagency agencies and a repository of com- identity management. In addition,

2011 FFIEC Training by Agency and Sponsored—Actual, as of December 31, 2011

FRB FDIC State State Event Name FRB Sponsored FDIC Sponsored NCUA OCC OTS FCA FHFB Other Total

Advanced BSA/AML Conference 22 13 34 7 6 11 6 0 0 6 105 Advanced Cash Flow Concepts & Analysis: Beyond 21 11 57 0 12 26 7 4 1 5 144 Advanced Commercial Credit Analysis 13 8 43 12 11 25 6 3 1 1 123 Anti-Money Laundering Workshop 11 10 44 6 5 0 0 0 0 4 80 Advanced Fraud Investigation Techniques for Examiners 6 9 8 0 8 3 1 1 0 0 36

Asset Management Forum 22 10 44 15 4 8 15 0 0 0 118 Capital Markets Conference 22 20 91 13 20 20 6 4 4 27 227 Capital Markets Specialists Conference 17 3 78 7 8 18 18 19 8 2 178 Cash Flow Construction and Analysis 15 15 55 15 22 46 3 3 0 2 176 Commercial Real Estate 48 19 278 47 33 46 20 2 3 2 498

Community Financial Institutions Lending Forum 18 13 42 5 16 11 3 6 0 1 115 Distressed Commercial Real Estate Analysis 19 7 130 16 8 16 4 0 3 0 203 Financial Crimes Seminar 12 25 83 6 15 9 9 3 1 3 166 Fraud Identification On-line Training 0 0 21 0 3 2 1 0 0 0 27 Information Technology Symposium 0 0 0 0 0 0 0 0 0 0 0

Fundamentals of Fraud 0 0 7 5 9 14 2 1 0 1 39 Information Technology Conference 35 6 41 6 14 52 0 5 4 0 163 Instructor Training School 30 0 0 0 1 1 0 2 0 3 37 International Banking School 1 4 9 0 1 4 1 0 1 1 22 International Banking (Self-study) 6 0 9 0 0 6 0 0 0 1 22

Payments Systems Risk Conference 24 6 21 10 5 24 0 0 1 2 93 Real Estate Appraisal Review School II 15 11 42 0 3 0 0 2 0 3 76 Real Estate Appraisal Review I (On-line) 2 0 45 0 6 0 0 0 0 0 53 Supervisory Updates & Emerging Issues 50 33 151 23 15 39 7 6 9 3 336 Structured Finance: Investment Analysis & Risk Management 21 7 56 0 3 5 4 0 1 0 97 Testifying School 0 0 19 1 1 9 0 0 0 0 30

Grand Total 430 230 1,408 194 229 395 113 61 37 67 3,164 Percentage 13.59 7.27 44.50 6.13 7.24 12.48 3.57 1.93 1.17 2.12 100

Combined Agency and Sponsored Percentage 20.86 NA 50.63 NA 7.24 12.48 3.57 1.93 1.17 2.12 100

12 Initiatives Addressed in 2011 Technology Issues The mission of the task force is to identify and implement technolo- gies to make the sharing of inter- agency data more efficient and to accommodate changes in agency databases and technologies. The task force’s Technology Working Group (TWG) meets monthly to develop technological solutions that enhance data sharing and to coordinate the automated trans- fer of data files between the FFIEC agencies. The group tracks weekly developments to provide timely resolutions of data exchange issues. Task Force on Information Sharing meeting. The TWG continues to develop necessary links and processes to Reconciliation Working Group efforts needed to meet these chal- exchange electronic documents, (SDRWG) continued to recon- lenges going forward. develop an inventory of future cile structure data about finan- technology projects, and upload cial institutions regulated by information to the collaborative FFIEC agencies to ensure that the Task Force on Reports website where documents and crit- information the agencies report ical materials pertaining to inter- is consistent and accurate. The The law establishing the Council agency information exchanges are SDRWG’s quarterly reconcile- and defining its functions requires stored. TWG efforts addressed in ments have greatly resolved struc- the Council to develop uniform 2011 include: ture data discrepancies among reporting systems for federally • Shared National Credit (SNC) the agencies. In 2011, the group supervised financial institutions Modernization—Agencies imple- focused on the reconciliation dur- and their holding companies and mented additional SNC sche- ing the change of supervisory subsidiaries. To meet this objec- mas as the application provided authority from the OTS for state tive, the Council established the more functionality. chartered thrifts to the FDIC and Task Force on Reports. The task federally chartered thrifts to the force helps to develop inter- • National Information Center (NIC) OCC. agency uniformity in the report- 2.0—Agencies implemented two ing of periodic information that is releases in April and December needed for effective supervision Identity Management resulting in NIC 2.0 becoming and other public policy purposes. the system of record. The Identity Management Work- As a consequence, the task force is • Office of Thrift Supervision Disso- ing Group continued with its concerned with issues such as the lution—Agencies updated their efforts to begin developing an development and interpretation of systems to address transitioning Identity Management technol- reporting instructions—including of supervisory authority over ogy framework within the FFIEC responding to inquiries about the state chartered thrifts to the agencies. These continuing efforts instructions from reporting insti- FDIC, federally chartered thrifts are based on a 2010 white paper tutions and the public, the appli- to the OCC and savings and developed and presented to the cation of accounting standards to loan holding companies to the agencies’ Chief Information Offi- specific transactions, the develop- FRB. cers. This document discussed ment and application of process- the new information challenges ing standards, the monitoring of data quality, and the assessment of Structure Data Reconciliation presented by the recent financial reforms, and sought a consensus reporting burden. In addition, the The task force’s Structure Data on the scope and urgency of the task force works with other orga-

13 nizations, including the Securities and Exchange Commission, the Financial Accounting Standards Board (FASB), and the Ameri- can Institute of Certified Public Accountants. The task force is also responsible for any special proj- ects related to these subjects that the Council may assign. To help the task force carry out its responsibilities, working groups are organized as needed to handle specialized or technical account- ing, reporting, instructional, and processing matters. In this regard, the task force has established a Central Data Repository (CDR) Steering Committee to make busi- ness decisions needed to ensure the continued success of the CDR system, monitor its ongoing per- formance, and report on its sta- tus. The CDR is a secure shared Task Force on Reports meeting. database for collecting, manag- ing, validating, and distributing data reported in the quarterly (PRA) from the U.S. Office of Man- revisions relating to construction Consolidated Reports of Condi- agement and Budget (OMB), the loans. The Office of Thrift Supervi- tion and Income (Call Report) FDIC, the FRB, and the OCC (col- sion (OTS) implemented several of filed by insured banks and, begin- lectively, the banking agencies) the same reporting changes in the ning in 2012, savings associations. implemented several revisions to Thrift Financial Report (TFR) filed The CDR also processes and dis- the Call Report in March 2011. by savings associations. tributes the Uniform Bank Per- The revisions, which had initially formance Report (UBPR) under been issued for public comment TFR-to-Call Report Conversion the oversight of the Task Force on in September 2010, were made to Surveillance Systems. assist the banking agencies and After careful review, the banking state supervisors in gaining a agencies and the OTS (collectively, better understanding of banks’ the agencies) concluded in late Initiatives Addressed in 2011 credit and liquidity risk exposures. 2010 that having common financial The reporting changes included reports and reporting processes Reporting Requirements for the additional data on troubled among all FDIC-insured banks Consolidated Reports of Condition debt restructurings, commer- and savings institutions would be and Income cial mortgage-backed securities, more efficient than maintaining The task force conducted monthly deposits maturing within one the TFR as a separate report solely interagency conference calls dur- year, loans and other real estate for savings associations after the ing 2011 to discuss Call Report covered by FDIC loss-sharing abolition of the OTS and the trans- instructional matters and related agreements, bank-owned life fer of its functions to the banking accounting issues to reach uni- insurance, and trust depart- agencies on July 21, 2011. Com- form interagency positions on ment collective investment funds; mon reporting also would lead these issues. new data on auto loans, deposits to more uniform comparisons of obtained through deposit listing financial condition, performance, services, and assets and liabili- and trends among institutions. For March 2011 Call Report Revisions ties of consolidated variable inter- these reasons, the agencies agreed After receiving approval under est entities and captive insurance to propose requiring savings asso- the Paperwork Reduction Act subsidiaries; and instructional ciations to begin filing the Call

14 Report in place of the TFR effective force approved the inclusion of a approved an initial PRA Federal March 31, 2012. Following task number of reporting and instruc- Register notice soliciting comment force approval, the agencies jointly tional revisions in a proposal to for 60 days on proposed report- published an initial PRA Federal be issued for comment. The pro- ing changes to the Call Report, the Register notice in February 2011 posed new data items, which are TFR, and the Report of Assets and requesting comment on the pro- focused primarily on larger insti- Liabilities of U.S. Branches and posed migration of savings asso- tutions, would help the banking Agencies of Foreign Banks (FFIEC ciations from the TFR to the Call agencies and state supervisors bet- 002 report) that would provide the Report. After considering the eight ter understand these institutions’ information needed to implement comments received on the pro- lending activities and credit-risk the redefined assessment base and posal, the agencies agreed to pro- exposures by providing informa- the revised large institution assess- ceed with the TFR-to-Call Report tion on selected loan origination ment system beginning with the conversion for savings associations activity, the composition of the second quarter 2011 reports. The in March 2012, but to allow indi- loan loss allowance, mortgage notice was published in March vidual institutions to elect to begin loan representation and warranty 2011. Because of unanticipated filing the Call Report in either Sep- reserves, and past due and nonac- comments from large institutions tember or December 2011. Follow- crual purchased credit-impaired about the subprime and leveraged ing task force approval, the agen- loans. These proposed revisions loan definitions in the revised cies jointly published a final PRA would take effect in June 2012. assessment system for such insti- Federal Register notice on this Two other proposed changes tutions and the challenges in conversion in July 2011. The final would be made in March 2012 in operationalizing their reporting notice also addressed the elimi- connection with the initial filing of under the new definitions, a tran- nation of the TFR’s interest rate the Call Report by savings associa- sitional approach was developed risk schedule and the OTS Inter- tions: new items for reporting on for reporting these loans until est Rate Risk Model after the fil- Qualified Thrift Lender compli- October 1, 2011. The agencies then ing of the year-end 2011 TFR. OMB ance and revisions to certain items requested and received emergency approved this reporting change used to calculate the leverage ratio clearance under the PRA from for savings associations in August denominator. In November 2011, OMB in June 2011 rather than con- 2011. The OTS issued a CEO Let- the banking agencies published an tinuing the normal clearance pro- ter in July 2011 to notify savings initial PRA Federal Register notice cess for the assessment-related associations about their migration requesting comment for 60 days reporting changes. The use of to the Call Report and the agencies on the proposed 2012 Call Report emergency clearance procedures have since conducted or partici- revisions. The comment period was intended to provide certainty pated in various outreach activi- closed in January 2012 and the to institutions on a timely basis ties to assist savings associations in task force will review and consider concerning the initial collection preparing to file Call Reports. the comments received to deter- of the new assessment data as of mine how to finalize the proposal. the June 30, 2011, report date as 2012 Call Report Revisions called for under the FDIC’s final Assessment-Related Reporting rule. In the second quarter of 2011, Changes the task force began evaluating Upon OMB’s emergency approval several recommendations from The FDIC adopted a final rule in of the assessment-related report- the banking agencies for poten- February 2011 that redefined the ing changes, which extended only tial Call Report revisions to be deposit insurance assessment base through the December 31, 2011, implemented in 2012. As the task for all insured depository institu- report date, the task force began force considered the purposes for tions as required by the Dodd- the normal PRA clearance pro- which the banking agencies and Frank Act. The final rule, which cess anew. Following task force state supervisors would use the took effect in the second quar- approval, the banking agencies recommended new data and the ter of 2011, also revised the risk- and the OTS jointly published a need for certain proposed instruc- based assessment system for large second initial PRA Federal Reg- tional revisions, it also sought to institutions, generally those with ister notice for these reporting limit the reporting changes that at least $10 billion in total assets. changes for a 60-day comment would apply to institutions with In coordination with the staff in period in July 2011. In response to less than $1 billion in total assets. the FDIC’s Division of Insurance large institutions’ continued con- In the fourth quarter, the task and Research (DIR), the task force cerns about the subprime and lev-

15 eraged loan definitions used for Central Data Repository Advanced Capital Adequacy assessment purposes, the FDIC’s Framework Regulatory Report- During 2011, the banking agen- DIR staff agreed to review these ing Requirements (FFIEC 101 cies continued to devote signifi- definitions and consider changes report). These changes to the cant staff resources to enhance that would be consistent with the report merged the separate bank- the CDR for the processing of the FDIC's goals of better differentiat- ing organization and savings quarterly Call Report, production ing among those institutions for association schedules for calculat- of the UBPR, and the public data risk and taking a more forward ing total capital, segregated the distribution (PDD) of those data. looking view of risk. Any such reporting by bank holding com- changes would require rulemaking In September 2011, the banking panies of certain restricted core by the FDIC. The banking agen- agencies implemented a major capital elements from other core cies also extended the transitional CDR enhancement release. The capital elements, and streamlined approach to reporting subprime September release included the reporting of equity exposures. and leveraged loans until April enhancements to improve the Following task force approvals, 1, 2012. Based on input provided PDD, UBPR processing, and the the agencies jointly published by the DIR staff concerning the FRB’s National Information Cen- initial and final PRA Federal comments received on the second ter import functionality that is Register notices requesting com- initial PRA notice, the task force used to manage the CDR struc- ment on the proposed reporting completed and approved the final ture data. Also included in the changes in October 2010 and Jan- PRA Federal Register notice for release were changes to the CDR uary 2011, respectively. the assessment-related reporting system necessary to accommodate In November 2011, the task force changes, which the agencies pub- the transition of savings asso- lished in December 2011. No com- approved, and the FRB pub- ciations from the TFR to the Call lished on behalf of the banking ments were received on the final Report effective March 31, 2012. PRA notice, for which the com- agencies, an initial PRA Federal The system was prepared for and Register notice requesting com- ment period closed in January has successfully accepted those 2012. OMB approval of the ment on proposed revisions to the filings from saving associations FFIEC 002 report that would take assessment-related reporting that chose to transition to the Call changes under normal PRA effect in June 2012. These revi- Report early. That option was sions would provide additional clearance procedures is open to respondents beginning in pending. detail on trading assets and add September 2011. a new schedule on loan origina- tion activity similar to the sched- FASB’s Accounting Standards Other Activities ule proposed for the Call Report. Codification After the proposal’s 60-day com- In March 2011, OMB approved In March 2011, the task force com- ment period closes in January several changes to the FFIEC 002 pleted the incorporation of refer- 2012, the task force will consider report that the FRB had first pub- ences to the FASB’s Accounting the comments received and deter- lished for comment on behalf of Standards Codification into the mine how to proceed with the the banking agencies in August Call Report instruction book while proposed reporting changes. 2010. The revisions, which took retaining references to the often effect in March 2011, incorporated more familiar pre-Codification several recent bank Call Report Task Force on Supervision standards. The FASB established revisions into the FFIEC 002 the Codification as the single The Task Force on Supervision report: additional detail on trad- source of authoritative nongov- coordinates and oversees matters ing assets, changes to the report- ernmental U.S. generally accepted relating to safety-and- ing of certain time deposits, and accounting principles in June 2009, soundness supervision and additional detail and modified replacing the former standards- examination of depository insti- criteria for reporting on assets based model with a topically- tutions. It provides a forum for and liabilities measured at fair based model. The FFIEC’s instruc- Council members to promote value. tion book update for September quality, consistency, and effective- 2010 included a revised glossary After receiving OMB approval ness in examination and supervi- section of the book that added under the PRA in March 2011, sory practices. While significant Codification references throughout the agencies implemented a lim- issues are referred, with recom- the section’s entries. ited number of revisions to the mendations, to the Council for

16 action, the Council has delegated to the task force the authority to make certain decisions and rec- ommendations, provided all task force members agree. Meetings are held regularly to address and resolve common supervi- sory issues. The task force has also established and maintains supervisory communication pro- tocols to be used in emergencies. These protocols are periodically tested through table-top exercises with task force members and key supervisory personnel. The task force has one subcom- mittee and one permanent work- ing group: • The Information Technology (IT) Subcommittee serves as a forum to address informa- tion systems and technology Task Force on Supervision meeting. policy issues as they relate to financial institutions and their tems, and other critical software Exchange Commission, United technology service providers tools that are used by finan- States Commodity Futures (TSPs). The IT Subcommittee cial institutions. These pro- Trading Commission, Treasury develops and maintains the grams help the agencies iden- Department’s Office of Ter- FFIEC Information Technol- tify potential systemic risks and rorist Financing and Financial ogy Examination Handbook, provide examiners with infor- Crimes, and the Office of For- which consists of a series of mation that can reduce time and eign Assets Control. The BSA/ topical booklets addressing resources needed to examine AML Working Group builds issues such as information the IT-related processing opera- on existing efforts and works security. The IT Subcommittee tions, software, and outsourced to strengthen the activities also oversees and administers services at user financial insti- that are already being pursued the FFIEC member agencies’ tutions. In conjunction with the by other formal and informal Multi-Regional Data Process- Task Force on Education, the interagency groups providing ing Servicer (MDPS) examina- IT Subcommittee sponsors an oversight of various BSA/AML tion and Shared Application annual conference for the agen- matters. BSA/AML training, Software Review (SASR) pro- cies’ examination staff. guidance, and policy includes: grams. Through the FFIEC’s (1) procedures and resource MDPS program, the agencies • The Bank Secrecy Act/Anti-Money materials for examination pur- conduct joint IT examinations Laundering (BSA/AML) Working poses; (2) joint examiner train- of the largest and most com- Group seeks to enhance coordi- ing related to the FFIEC’s BSA/ plex TSPs and other entities nation of BSA/AML training, AML Examination Manual; that provide critical data pro- guidance, and policy. The coor- (3) outreach to the banking cessing and related banking dination includes continuing industry on BSA/AML policy services to regulated financial communication between federal matters; and (4) other issues institutions. The SASR pro- and state banking agencies and related to consistency of BSA/ gram provides a mechanism the Financial Crimes Enforce- AML supervision. for the agencies to review and ment Network. The BSA/AML share information on mission- Working Group also meets The task force also establishes ad critical software applications, periodically with other federal hoc working groups to handle such as loans, deposits, credit, agencies including: the Internal individual projects and assign- BSA/AML, general ledger sys- Revenue Service, Securities and ments, as needed.

17 Initiatives Addressed in questions regarding implementa- On June 28, 2011, the FFIEC issued 2011 SAFE Act tion of their regulations. a supplement to guidance enti- tled Authentication in an Internet On July 21, 2011, pursuant to A task force working group, Banking Environment, issued in the Dodd-Frank Act, the CFPB together with the Farm Credit 2005 (2005 Guidance). The 2005 assumed responsibility for devel- Administration (FCA), continued Guidance provided a risk-man- oping and maintaining the fed- to coordinate efforts among the agement framework for finan- eral registration system (including FFIEC agencies to implement cial institutions offering Internet- rulemaking authority) and super- provisions of the Secure and based products and services to visory and enforcement authority Fair Enforcement for Mortgage their customers. In the Supple- for SAFE Act compliance for insti- Licensing Act of 2008 (the SAFE ment to Authentication in an Inter- tutions under the CFPB’s jurisdic- Act). net Banking Environment, the tion. On December 19, 2011, the FFIEC member agencies reinforce The working group’s major ini- CFPB published an interim final the risk management framework tiative in 2011 was the successful rule establishing a new Regulation in the 2005 Guidance and update launch of the Nationwide Mort- G (SAFE Mortgage Licensing Act– the agencies’ expectations regard- gage Licensing System and Reg- Federal Registration of Mortgage ing customer authentication, lay- istry (NMLSR) for federally regu- Loan Originators). The interim ered security, or other controls lated institutions. As required by final rule was effective on Decem- in the increasingly hostile online the SAFE Act, mortgage loan origi- ber 30, 2011 with public comments environment. nators (MLOs) employed by insti- due February 17, 2012. tutions that are regulated by The IT Subcommittee also facili- a federal banking agency or Review of Examination Practices tated the development and imple- the FCA must register with the mentation of a new process that NMLSR, obtain a unique identi- The task force formed a working member agencies will use to stan- fier, and maintain their registra- group to identify opportunities dardize the collection of data from tion. As envisioned, the NMLSR for the agencies to enhance their TSPs on regulated financial insti- will improve the flow of informa- respective examination practices tutions with which the TSPs have tion to and between regulators, relative to lessons learned from entered into contractual obliga- providing increased accountability the recent financial crisis and its tions. This process will increase and tracking of MLOs, enhancing aftermath. Within the working the accuracy of the data needed consumer protections, and pro- group, the FFIEC member agen- for supervisory purposes as well viding consumer access to certain cies shared information on find- as reduce the level of effort and information on MLOs. ings related to supervisory matters burden on TSPs and the FFIEC highlighted by the crisis. Through member agencies’ examiners. On January 31, 2011, the FFIEC this information exchange, the agencies and FCA announced the agencies independently addressed The IT Subcommittee, in con- opening of the initial registra- revisions to their respective exami- junction with the Task Force on tion period for federal registra- nation practices. Examiner Education, sponsors tion in the NMLSR. Following an annual Information Technol- the 180-day registration period, Information Technology ogy conference for the agencies’ which ended on July 29, 2011, any examination staff on emerging employee of a federally regulated Financial institutions’ significant risks and industry best prac- institution who is subject to the use of information technology ser- tices. The IT Subcommittee is also registration requirements will be vices, whether generated inter- responsible for the coordination prohibited from originating resi- nally or obtained from third-party of the Multi-Regional Data Pro- dential mortgage loans without service providers, contributes to cessing Servicer (MDPS) program first meeting such requirements. their operational risk environment oversight, which is ongoing. The During the initial registration in general and their data security FFIEC member agencies examine period 10,507 institutions regis- risk in particular. A major effort of MDPS organizations because these tered with the NMLSR and 349,791 the IT Subcommittee and agencies entities pose a systemic risk to MLOs completed their registra- is maintaining the FFIEC Infor- the banking system should one or tions. Throughout the initial regis- mation Technology Examination more have operational or financial tration period, the working group Handbook and providing guid- problems or fail. Since these com- monitored the progress of registra- ance to the industry on emerging panies service banks, thrifts, and tions and collaborated to address IT issues and risks. credit unions, the FFIEC mem-

18 ber agencies conduct interagency to develop and produce the Uni- nonaccrual loans were revised to examinations of these large TSPs. form Bank Performance Report utilize new detail reported begin- Interagency examinations provide (UBPR). UBPRs present financial ning with the March 31, 2001 Call a single examination report for data and peer group statistics of Report Schedules RC-C and RC-N. the service providers. During the individual financial institutions The Call Report added data on year, the IT Subcommittee devoted for current and historical periods. automobile loans and expanded resources to work streams result- These reports are important tools reporting of loans that are trou- ing from the 2011 strategy ses- for completing supervisory evalu- bled debt restructurings by loan sion with interagency examination ations of a financial institution’s category. The task force also imple- teams from each MDPS, includ- condition and performance, as mented new ratios to analyze the ing efforts to address supervisory well as for planning onsite exami- impact of government guarantees expectations for emerging technol- nations. The banking agencies also on past due loans. Ratios found ogies, products, and services such use the data from these reports on the UBPR Page 1 Summary as managed secured services. in their automated monitoring Ratios; UBPR Page 7 and Page 7A systems to identify potential or Analysis of Credit Allowance and BSA/AML Working Group emerging problems in insured Loan Mix; UBPR Page 7B Analysis banks. of Concentrations of Credit; and The BSA/AML Working Group is UPBR Page 8 and Page 8A Analy- responsible for maintaining and A UBPR is produced for each com- sis of Past Due, Nonaccrual & providing timely updates to the mercial bank and insured savings Restructured Loans & Leases were BSA/AML Examination Manual bank in the United States that is affected. (Manual) and examination proce- supervised by the FRB, the FDIC, dures. The agencies' most recent or the OCC. UBPR data are also release of updates to the Manual available to all state bank super- Thrift Financial Report Consolidation occurred in 2010. A Spanish lan- visors. While the UBPR is princi- into Call Report guage translation was coordinated pally designed to meet the exami- The Dodd-Frank Act dissolved by several of the FFIEC member nation and surveillance needs the OTS, and mandated that thrift agencies and posted to the FFIEC of the federal and state banking institutions formerly regulated by Website in 2011. agencies, the task force also makes the OTS begin filing Call Reports the UBPR available to banks and The BSA/AML working group no later than March 31, 2012. The the public through a public web- task force determined that all thrift sponsored its fifth FFIEC site, www.ffiec.gov/UBPR.htm. Advanced BSA/AML Specialists institutions will be placed into Conference in July 2011. Feedback the existing FDIC-insured savings from the conference was positive. Initiatives Addressed in 2011 bank peer groups. There are cur- rently four FDIC-insured savings The agencies continued to share Improved UBPR Analysis of Deposits information with the Financial bank peer groups: insured savings Crimes Enforcement Network and Ratios that analyze core deposits, banks having assets less than $100 with the Office of Foreign Assets non-core liabilities, and short-term million, insured savings banks Control. non-core liabilities were revised to having assets between $100 mil- utilize new detail reported begin- lion and $300 million, insured sav- ning with the March 31, 2011 ings banks having assets between Task Force on Call Report Schedule RC-E. The $300 million and $1 billion, and Surveillance Systems revised ratios reflect the increase insured savings banks having in the FDIC deposit insurance assets greater than $1 billion. The The Task Force on Surveillance limit, from $100,000 to $250,000. task force further agreed to create Systems oversees the develop- Ratios found on the UBPR Page a supplementary peer group for ment and implementation of uni- 1 Summary Ratios, UBPR Page 4 mutually owned thrift institutions, form interagency surveillance and Balance Sheet $, UBPR Page 6 Bal- using asset size groups that cor- monitoring systems. It provides ance Sheet %, and UBPR Page 10 respond to the current four FDIC- a forum for the member agen- Liquidity and Investment Portfolio insured savings bank peer groups. cies to discuss best practices to were affected. The task force is currently taking be used in those systems and to efforts to ensure that thrift insti- tutions are placed in the existing consider the development of new Improved UBPR Analysis of Loans financial analysis tools. The task FDIC-insured savings bank and force’s principal objective has been Ratios that analyze past due and mutual savings bank peer groups

19 force strives to deliver the most up-to-date UBPR data to all users through nightly updates of cur- rent and historic UBPR data. Fre- quent updating allows the UBPR to remain synchronized with new Call Report data as submissions are made by financial institutions.

Projects Planned for 2012 • Liquidity and funding—The task force has approved the changes to the existing liquidity and funding UBPR page that were proposed by the working group. These changes provide addi- tional ratios that should enhance liquidity and funding analysis. Changes to the existing liquid- Task Force on Surveillance Systems meeting. ity and funding UBPR page are scheduled to be implemented in with the publication of the March enhancements to UBPR fiduciary 2012. 31, 2012 UBPR. activities data and ratios are sched- • Fiduciary activities—The task uled to be completed in 2012. force has approved the changes Enhancements to Liquidity and to the existing fiduciary activi- Funding Ratios Enhancements to UBPR Ratio ties UBPR page that were pro- Documentation posed by the working group. In 2010, the task force approved This will be the first compre- a working group to review UBPR The task force is undertaking a hensive update of informa- treatment of liquidity measures complete rewrite of the UBPR tion obtained from Call Report and overall funding analysis. The User’s Guide, which will be re- Schedule RC-T since the ini- working group has concluded its focused as a technical reference tial 2002 implementation of review and has agreed on which manual. In 2011, the task force the fiduciary activities pages. ratios should be modified, added, explored different options of pre- Changes to the existing fidu- or deleted. The task force has senting technical data to explain ciary activities pages are sched- approved the working group’s rec- UBPR ratios. The task force agreed uled to be implemented in 2012. ommendations. The enhancements to develop an online UBPR tech- to the UBPR liquidity and fund- nical reference manual as well • Improved documentation—The ing ratios are scheduled to be com- as an electronic version as a Por- task force is re-focusing of the pleted in 2012. table Document Format file. The existing UBPR User’s Guide into enhancements to UBPR ratio doc- a technical reference manual. Enhancements to Fiduciary Activities umentation are scheduled to be The new UBPR Users Guide Ratios completed in 2012. will provide Call Report-based explanations of UBPR ratio cal- In 2010, the task force approved UBPR Delivered to a Wide Audience culations. The improved user a working group to review UBPR guide is scheduled to be imple- treatment of fiduciary data UBPR for December 31, 2010; mented in 2012. obtained from Call Report Sched- March 31, 2011; June 30, 2011; and ule RC-T. The working group September 30, 2011 were produced has concluded its review and has and delivered during 2011 to fed- Information Available on the agreed on which ratios should be eral and state banking agencies. UBPR Website modified, added, or deleted. The Additionally, the UBPR website UBPR Availability task force has approved the work- delivered the same data to bankers ing group’s recommendations. The and the general public. The task To provide broad banking industry

20 and public access to information of these peer groups; (3) list the appearing on report pages for all about the financial condition of individual financial institutions financial institutions who file a insured financial institutions, the included in each peer group; and Call Report, may be downloaded task force publishes UBPR data for (4) compare a financial institu- as either a delimited file or in each institution shortly after the tions to the performance of a user- XBRL format. There is no charge underlying Call Report is filed in defined custom peer group. for this service and downloads are the CDR. The UBPR is frequently typically fast. refreshed to reflect amendments Custom Peer Group Tool to underlying Call Report data Please visit www.ffiec.gov/UBPR. and to incorporate any content- The Custom Peer Group Tool htm for additional information based changes agreed to by the allows bankers, bank supervi- about the UBPR, including status, task force. The online UBPR is a sors, and the general public to descriptions of pending changes, dynamic report that is closely syn- create custom peer groups based and the UBPR Users Guide. The chronized with the underlying Call on financial and geographical cri- site also provides access to the Report. teria. The tool can then display reports described above. For ques- all UBPR pages with peer group tions about the UBPR contact sup- port by calling 1-888-237-3111, Other UBPR Reports statistics and percentile rankings derived from the custom peer emailing [email protected], or Several web-based statistical group. The Custom Peer Group writing the Council at reports supporting UBPR analysis Tool can re-compute the entire Federal Financial Institutions are also available and are updated UBPR using a custom peer group Examination Council nightly on the website. These of up to 2,000 banks and deliver Attention: UBPR Coordinator reports (1) summarize the perfor- the results usually within seconds. 3501 Fairfax Drive, Room B7081a mance of all UBPR peer groups Arlington, VA 22226-3550 (determined by size, location, and Bulk Data Download business line); (2) detail the distri- bution of UBPR performance ratios The UBPR database within the for financial institutions in each CDR, which contains all data

21

THE FEDERAL FINANCIAL INSTITUTION REGULATORY AGENCIES AND THEIR SUPERVISED INSTITUTIONS

The FDIC, OCC, and NCUA have the United States and accept retail primary federal supervisory juris- deposits must organize under diction over 14,664 domestically separate U.S. charters. Exist- chartered banks, thrift institu- ing insured retail branches may tions, and federally insured credit continue to operate as branches. unions. On December 31, 2011, The IBA also subjects those U.S. these financial institutions held offices of foreign banks to many total assets of just under $17 tril- provisions of the Federal Reserve lion. The FRB has primary federal Act and the Bank Holding Com- supervisory responsibility for com- pany Act. The IBA gives pri- mercial bank holding companies mary examining authority to the and, as of July 21, 2011, for savings OCC, the FDIC, and various state and loan holding companies. authorities for the offices within their jurisdictions. The IBA also Three banking agencies on the gives the FRB residual examin- Council have authority to over- ing authority over all U.S. bank- see the operations of U.S. branches ing operations of foreign banks. and agencies of foreign banks. The The Dodd-Frank Act provides International Banking Act of 1978 statutory authority to the CFPB to (IBA) authorizes the OCC to license conduct examinations of insured federal branches and agencies of depository entities with total foreign banks and permits U.S. assets over $10 billion and their branches that accept only whole- affiliates (in addition to certain sale deposits to apply for insur- nonbank entities) to ensure con- ance with the FDIC. According sumer financial products and to the Federal Deposit Insurance services conform to Federal con- Corporation Improvement Act of sumer financial laws. 1991 (FDICIA), foreign banks that wish to operate insured entities in

23 Board of Governors of the sible licensing authorities, the Federal Reserve System international operations of banking organizations head- The Federal Reserve Board (FRB) quartered in the United States was established in 1913. It is and the domestic activities of headed by a seven-member Board foreign banking organizations; of Governors; each member is appointed by the President, with • developing, issuing, imple- the advice and consent of the Sen- menting, and communicating ate, for a 14-year term. Subject to regulations, supervisory poli- confirmation by the Senate, the cies and guidance, and tak- President selects one Board mem- ing appropriate enforcement ber to serve a four-year term as actions applicable to those Chairperson and two members to organizations that are within serve as Vice Chairs; one serves the FRB’s supervisory oversight in the absence of the Chairper- authority; and son and the other is designated as • approving or denying appli- Vice Chair for Supervision. One cations for mergers, acquisi- member of the Board of Governors tions, and changes in control serves as the Board’s representa- by state member banks and tive to the FFIEC. The FRB’s activi- BHCs (including FHCs), appli- ties most relevant to the work of cations for foreign operations the Council are the following: of member banks and Edge Act • overseeing the quality and effi- and agreement corporations, ciency of the examination and and applications by foreign supervision function of the banks to establish or acquire 12 Federal Reserve Banks; U.S. banks and to establish U.S. branches, agencies, or represen- • monitoring the financial condi- tative offices. tion, operations, and systemic risk of state member banks (i.e., Other supervisory and regulatory state-chartered banks that are responsibilities of the FRB include members of the Federal Reserve monitoring compliance by enti- System), bank holding compa- ties under the Board’s jurisdic- nies (BHCs), including finan- tion with other statutes (e.g., the cial holding companies (FHCs)1 money-laundering provisions of and Edge Act and agreement the Bank Secrecy Act), monitoring corporations; compliance with certain statutes that protect consumers in credit • supervising and regulating, in and deposit transactions, regulat- conjunction with the respon- ing margin requirements on secu- rities transactions, and regulat- 1. The FRB’s role as the supervisor of a ing transactions between banking BHC or FHC is to review and assess the affiliates. consolidated organization’s operations, risk-management systems, and capi- Policy decisions are implemented tal adequacy to ensure that the holding by the FRB or under delegated company and its non-bank subsidiaries authority to the Director for the do not threaten the viability of the com- Division of Banking Supervision pany’s depository institutions. In this role, the FRB serves as the “umbrella and Regulation, the Director for supervisor” of the consolidated orga- the Division of Consumer and nization. In fulfilling this role, the FRB Community Affairs, and to the relies to the fullest extent possible on twelve Federal Reserve Banks— information and analysis provided by the appropriate supervisory authority of each of which has operational the company’s bank, securities, or insur- responsibility within a specific ance subsidiaries. geographical area. The Reserve

24 Bank Districts are headquar- that are not members of the Fed- ing requirements related to tered in Boston, New York, Phila- eral Reserve System are regulated capital, liquidity, stress tests, delphia, Cleveland, Richmond, and supervised by the FDIC. The risk management, concentra- Atlanta, Chicago, St. Louis, Min- FRB also has overall responsibil- tion limits, and credit exposure neapolis, Kansas City, Dallas, and ity for foreign banking operations, reporting). San Francisco. Each Reserve Bank including both U.S. banks oper- 5. Promulgation of risk- has a president (chief executive ating abroad and foreign banks management standards and officer) who serves for 5 years and operating branches within the performing an enhanced super- is appointed by the Reserve Bank’s United States. visory role for financial market class B and class C directors, utilities and payment, clearing, and other executive officers who On July 21, 2010, the President and settlement activities that report directly to the president. signed the financial regulatory are designated as systemically Among other responsibilities, a reform bill (the Dodd-Frank Act). important by the FSOC. Reserve Bank employs a staff of The Dodd-Frank Act gives the FRB new responsibilities including: examiners who examine state Additionally, the Dodd-Frank Act member banks and Edge Act and 1. Membership in the newly created an independent CFPB, agreement corporations, conduct formed Financial Stability within the Federal Reserve Sys- BHC inspections, and examine the Oversight Council (FSOC). The tem, and charged it with writing international operations of foreign FSOC’s responsibilities include regulations to implement enumer- banks—whose head offices are identifying risks to financial ated consumer financial protec- usually located within the Reserve stability and promoting market tion laws and supervising finan- Bank’s District. When appropri- discipline. The FSOC has cial institutions with assets greater ate, examiners also visit the over- 10 designated voting members than $10 billion, and their affili- seas offices of U.S. banking orga- and five designated nonvoting ates, for compliance with those nizations to obtain financial and advisory members. The Secre- laws. operating information to evaluate tary of Treasury serves as the The FRB covers the expenses of its adherence to safe and sound bank- Chairperson of the FSOC. ing practices. operations with revenue it gener- 2. Supervision of nonbank finan- ates principally from assessments National banks, which must be cial firms that are designated as on the 12 Federal Reserve Banks. members of the Federal Reserve systemically important by the The Dodd-Frank Act directs the System, are chartered, regulated, FSOC. FRB to collect assessments, fees, and other charges that are equal and supervised by the Office of 3. Supervision and regulation of the Comptroller of the Currency. to the expenses incurred by the savings and loan holding com- Federal Reserve to carry out its State-chartered banks may apply panies (SLHCs). to and be accepted for member- responsibilities with respect to ship in the Federal Reserve Sys- 4. Development of enhanced pru- supervision of (1) BHCs and tem, after which they are subject dential standards for large SLHCs with assets equal to or to the supervision and regulation BHCs with $50 billion or more greater than $50 billion; and (2) of the FRB, which is coordinated in assets, and for systemically all non-bank financial companies with the state’s banking author- significant FSOC-designated supervised by the FRB. ity. Insured state-chartered banks nonbank financial firms (includ-

25 Consumer Financial action to address violations Protection Bureau of federal consumer financial laws; and The Consumer Financial Protec- tion Bureau (CFPB) was created • supervising covered entities in 2010 by the Dodd-Frank Act, to assess compliance with fed- and assumed transferred authori- eral consumer financial laws ties from other federal agencies on and detect financial risks to July 21, 2011. The CFPB is an inde- consumers. pendent agency, and is funded by The CFPB has statutory authority a quarterly transfer of funds from to conduct examinations to ensure the combined earnings of the Fed- that consumer financial products eral Reserve System. The Director and services conform to federal of the CFPB serves on the FDIC consumer financial laws, Board of Directors and the Finan- and for related purposes. The cial Stability Oversight Council. CFPB’s supervision program The CFPB seeks to foster a con- oversees: sumer financial marketplace where customers can clearly see • Insured depository entities prices and risks up front and can with total assets over $10 bil- easily make product comparisons; lion and their affiliates. These in which no one can build a busi- institutions collectively hold ness model around unfair, decep- more than 80 percent of the tive, or abusive practices; and that banking industry’s assets. works for American consumers, • Certain nondepository enti- responsible providers, and the ties regardless of size—mort- economy as a whole. To accom- gage companies (originators, plish this, the CFPB works to help brokers, and servicers, as well consumer financial markets oper- as related loan modification ate by making rules more effec- or foreclosure relief services tive, by consistently and fairly firms), payday lenders, and pri- enforcing those rules, and by vate education lenders. CFPB empowering consumers to take can also supervise through more control over their economic rulemaking the larger play- lives. ers, or “larger participants,” in The Dodd-Frank Act sets forth the consumer financial markets, following functions for the CFPB: and any nondepository entity nonbank that it determines is • conducting financial education posing a risk to consumers in programs; connection with the offering or • collecting, investigating, and provision of consumer financial responding to consumer products or services. complaints; The CFPB’s supervisory activi- • collecting, researching, moni- ties are conducted by the Divi- toring, and publishing informa- sion of Supervision, Enforcement, tion relevant to the identifica- Fair Lending and Equal Oppor- tion of risks to consumers and tunity. The division is headquar- the proper functioning of finan- tered in Washington, D.C., with cial markets; regional offices in San Francisco (West), Chicago (Midwest), New • issuing rules, orders, and guid- York (Northeast), and Washing- ance implementing federal con- ton, D.C. (Southeast). Examination sumer financial laws; staff is assigned to one of the four • taking appropriate enforcement regions.

26 Federal Deposit Insurance the viability of the DIF. When an Corporation insured depository institution fails, the FDIC ensures that the financial Congress created the Federal institution’s customers have timely Deposit Insurance Corporation access to their insured deposits (FDIC or Corporation) in 1933 to and other services. promote stability and public con- fidence in our nation’s banking The FDIC provides the public with system. The FDIC accomplishes a sound deposit insurance system its mission by insuring deposits, by supplying comprehensive sta- examining and supervising finan- tistical information on banking; cial institutions for safety and identifying and analyzing emerg- soundness and consumer pro- ing risks; conducting research that tection, and managing receiver- supports deposit insurance, bank- ships. In its unique role as deposit ing policy, and risk assessment; insurer, the FDIC works in coop- and assessing the adequacy of eration with other federal and the DIF and maintaining an effec- state regulatory agencies to iden- tive and fair risk-based premium tify, monitor, and address risks system. to the Deposit Insurance Fund The Dodd-Frank Act revised the (DIF) posed by insured depository statutory authorities governing the institutions. FDIC’s management of the DIF. Management of the FDIC is vested As a result of these changes, the in a five-member Board of Direc- FDIC developed a comprehensive, tors. No more than three board long-range management plan for members may be of the same polit- the DIF that sets an appropriate ical party. Three of the directors target fund size and a strategy for are directly appointed by the Presi- assessment rates and dividends. In dent, with the advice and consent October 2010, pursuant to the com- of the Senate, for six-year terms. prehensive plan, the FDIC adopted One of the three appointed direc- a new Restoration Plan to ensure tors is designated by the Presi- that the reserve ratio reaches the dent as Chairman for a term of five statutory mandates required by years, and another is designated the Dodd-Frank Act in a timely as Vice Chairman. The other two manner. The Dodd-Frank Act also board members are the Comptrol- required the FDIC to amend its ler of the Currency and the Direc- regulations to define the assess- tor of the CFPB. ment base as average consolidated total assets minus average tan- The FDIC’s operations are orga- gible equity, rather than domes- nized into three major program tic deposits (which, with minor areas: insurance, supervision, adjustments, it has been since and receivership management. A 1935). description of each of these areas follows: The FDIC continued its efforts to improve risk differentiation and Insurance: The FDIC maintains sta- reduce the pro-cyclicality of the bility and public confidence in the deposit insurance assessment sys- U.S. financial system by provid- tem by issuing a rule that revised ing deposit insurance. As insurer, the assessment system applicable the Corporation must continually to large insured depository insti- evaluate and effectively manage tutions to better reflect risk in a how changes in the economy, the timely manner, to better differenti- financial markets, and the bank- ate large institutions during peri- ing system affect the adequacy and ods of good economic conditions,

27 and to better take into account the Division of Resolutions and in assets, as well as systemically- losses that the FDIC may incur if Receiverships. In protecting important nonbank financial com- such an institution fails. The rule insured deposits, the FDIC is panies, designated by the FSOC. became effective in April 2011. charged with resolving failed depository institutions at the least The former Division of Supervi- Supervision: The FDIC has primary possible cost to the DIF. In car- sion and Consumer Protection federal regulatory and supervisory rying out this responsibility, the was separated into two divisions authority over insured state- FDIC engages in several activi- to more effectively focus on safety chartered banks that are not mem- ties, including paying off depos- and soundness and consumer pro- bers of the Federal Reserve Sys- its, arranging the purchase of tection issues. The new Division tem and for state-chartered savings assets and assumption of liabili- of Risk Management Supervision associations. In July 2011, pursuant ties of failed institutions, effecting oversees the safety and sound- to the Dodd-Frank Act, supervisory insured deposit transfers between ness of insured state non-member responsibilities for state-charted institutions, creating and operat- banks and savings associations savings associations were trans- ing temporary bridge banks until with less than $100 billion in total ferred to the FDIC from the OTS, a resolution can be accomplished, assets. The Division of Deposi- shortly before the latter agency and using its conservatorship tor and Consumer Protection was was abolished. The FDIC also has powers. established to centralize all of backup examination and enforce- the FDIC’s consumer protection ment authority over all insured Similarly, Title II of the Dodd- functions, including the examina- institutions. Accordingly, the FDIC Frank Act vests the FDIC with tion and enforcement programs, can examine for insurance pur- authority to resolve a failing into one division. Under Dodd- poses any insured financial insti- systemically-important financial Frank, the FDIC retained exami- tution, either directly or in coop- company, including a bank hold- nation and enforcement authority eration with state or other federal ing company, if use of that author- for several laws and regulations supervisory authorities.The FDIC ity would avoid or mitigate poten- including the Community Rein- can also recommend that the appro- tial adverse consequences for the vestment Act without regard to priate federal banking agency take financial system, and complies the size of an institution. Exami- action against an insured institu- with other statutory standards. nation and enforcement respon- tion and may do so itself if it deems Consistent with these responsi- sibilities were transferred to the necessary. In addition, the Dodd- bilities, as well as its role on the CFPB for certain statutes enumer- Frank Act expanded the FDIC’s FSOC helping to promote finan- ated in Dodd-Frank for institu- authority to manage the failure of cial stability, the Dodd-Frank Act tions with assets of $10 billion or systemically-significant firms. also expanded the FDIC's backup more and their banking affiliates. examination authority to include The FDIC’s supervisory activi- certain bank holding companies The Office of Corporate Risk Man- ties for risk management and con- and systemically-important finan- agement was established to assess sumer protection are organized into cial companies designated by the external and internal risks faced six regional offices and two area FSOC for supervision by the FRB. by the FDIC, enhancing the Agen- offices. The regional offices cy's existing risk management are located in Atlanta, Chicago, practices. When fully staffed, the Dallas, Kansas City, New York, and Recent Structural Changes Office of Corporate Risk Manage- San Francisco. The two area offices ment will have a small core staff are located in Boston (reports to In 2011, the FDIC completed vari- and will work with internal com- New York) and Memphis (reports ous structural changes to more mittees, risk-specific working to Dallas). In addition to the effectively allocate its resources groups, and front-line offices and regional and area offices, the FDIC to address industry risks and to divisions which will continue to maintains 86 field territory offices implement the Dodd-Frank Act. be responsible for risk manage- for risk-management and 76 field Structural changes included the ment. The new Office will play territory offices for compliance, following: an advisory and supporting role with dedicated examiners assigned and will identify risks that require to many of the largest financial The Office of Complex Financial consideration by senior manage- institutions. Institutions was created to over- ment and the Board. see the condition and orderly liq- Receivership Management: Bank uidation of bank holding compa- The Office of Minority and resolutions are handled by the nies with more than $100 billion Women Inclusion was established

28 with responsibility for all matters of the agency relating to diversity in management, employment, and business activities.

29 National Credit Union rowing authority from the Administration U.S. Treasury and assessment authority to resolve corporate The National Credit Union credit union issues; and Administration (NCUA), estab- lished by Congress in 1934 • manage the Central Liquid- through section 1752a of the Fed- ity Facility, created to improve eral Credit Union Act, is the inde- the financial stability of credit pendent federal agency that super- unions by providing liquidity vises the nation’s federal credit to the credit union system. union system. A three-member The NCUA also has statutory bipartisan board, appointed by the authority to examine and super- President for six-year terms, man- vise NCUSIF-insured, state-char- ages the NCUA. The President tered credit unions in coordina- also selects one board member to tion with state regulators. serve as the Chairman. The NCUA is headquartered in The NCUA’s main responsibilities Alexandria, Virginia and has five are as follows: regional offices across the United • charter, regulate, and supervise States to administer its responsi- more than 4,400 federal credit bilities for chartering and super- unions in the United States and vising credit unions. Addition- its territories; ally, the Asset Management and Assistance Center located in Aus- • administer the National Credit tin, Texas manages the recovery of Union Share Insurance Fund assets for liquidated credit unions. (NCUSIF), which insures mem- NCUA examiners conduct on- ber share accounts in just under site examinations and supervi- 7,100 federal and state-char- sion of each federal credit union tered credit unions; and selected state-chartered credit • administer the Temporary Cor- unions. The NCUA is funded by porate Credit Union Stabili- the credit unions it regulates and zation Fund, which has bor- insures.

30 Office of the Comptroller • chartering banks and issuing of the Currency interpretations related to per- missible banking activities; The Office of the Comptroller of the Currency (OCC) is the oldest • establishing and communicat- Comptroller of the Currency Administrator of National Banks federal bank regulatory agency, ing regulations, policies, and operating guidance applicable US Department of the Treasury established as a bureau of the Trea- sury Department by the National to banks; and Currency Act of 1863. It is headed • supervising the national sys- by the Comptroller of the Cur- tem of banks and savings rency, who is appointed to a five- associations through on-site year term by the President with the examinations, off-site moni- advice and consent of the Senate. toring, systemic risk analyses, The Comptroller is also a Director and appropriate enforcement of the FDIC. activities. The OCC was created by Congress To meet its objectives, the OCC to charter, regulate, and supervise maintains a nationwide staff of national banks. On July 21, 2011, bank examiners and other pro- pursuant to the Dodd-Frank Act, fessional and support personnel. the OCC assumed supervisory Headquartered in Washington, responsibility for federal savings DC, the OCC has four district associations, as well as rulemak- offices which are located in Chi- ing authority relating to all savings cago, Dallas, Denver, and New associations. York. In addition, the OCC main- The OCC regulates and supervises tains a network of 73 field offices 1,400 national banks and trust com- and 18 satellite locations in cities panies, 637 federal savings asso- throughout the United States, as ciations, and 47 federal branches well as resident examiner teams of foreign banks accounting for in 24 of the largest national bank- approximately 76 percent of the ing companies and an examining total assets of all U.S. commercial office in London, England. banks, federal savings associations, The Comptroller receives advice and branches of foreign banks. The on policy and operational issues OCC seeks to ensure that national from an Executive Committee, banks and federal savings associa- comprised of senior agency offi- tions (collectively “banks”) safely cials who lead major business and soundly manage their risks, units. comply with applicable laws, com- pete effectively with other pro- The OCC is funded primarily by viders of financial services, offer semiannual assessments on banks, products and services that meet the interest revenue from its invest- needs of customers, and provide ment in U.S. Treasury securities, fair access to financial services and and other fees. The OCC does not fair treatment of their customers. receive congressional appropria- The OCC’s mission-critical pro- tions for any of its operations. grams include:

31 ASSETS, LIABILITIES, AND NET WORTH of U.S. Commercial Banks, Thrift Institutions, and Credit Unions as of December 31, 20111 Billions of dollars

Credit U.S. Commercial Banks2 U.S. Thrift Institutions4 Unions3 Branches and OCC FDIC Agencies Regu- Regu- State of lated lated State Non- Foreign Federal State Federal State Item Total National Member Member Banks5 Charter Charter6 Charter Charter

Total assets 16,955 8,732 1,886 2,016 2,117 917 325 526 436

Total loans and receivables (net) 8,371 4,384 852 1,292 524 550 202 307 260 Loans secured by real estate7 4,476 2,228 497 812 33 412 181 165 149 Consumer loans8 1,566 916 68 228 0 93 5 145 111 Commercial and industrial loans 1,609 873 194 208 258 54 17 2 3 All other loans and lease receivables9 918 499 110 71 234 1 2 0 1 LESS: Allowance for possible loan and lease losses 201 133 19 27 0 10 3 5 4 Federal funds sold and securities purchased under agreements to resell 586 424 18 15 120 4 4 0 1 Cash and due from depository institutions10 2,122 699 342 155 744 13 24 77 69 Securities and other obligations11 3,200 1,702 436 401 147 240 70 119 86 U.S. government obligations12 821 202 71 84 47 181 55 106 75 Obligations of state and local governments13 217 103 34 69 0 6 6 0 0 Other securities 2,163 1,397 332 248 100 53 9 13 11 Other assets14 2,675 1,522 237 153 583 111 26 23 20

Total liabilities 15,287 7,762 1,675 1,775 2,177 808 286 472 392

Total deposits and shares15 11,947 6,231 1,460 1,559 942 683 245 449 378 Federal funds purchased and securities sold under agreements to repurchase 776 342 61 35 303 25 10 0 0 Other borrowings16 1,256 656 72 151 240 84 27 17 9 Other liabilities17 1,309 533 83 29 632 17 4 6 5

Net worth18 1,669 970 211 241 1 109 39 54 44

Memorandum: Number of institutions reporting 14,664 1,310 811 4,149 233 619 448 4,447 2,647

Footnotes to Tables 3. Data are for federally insured natural 8. Includes loans, except those secured 1. The table covers institutions, including person credit unions only. by real estate, to individuals for house- those in Puerto Rico and U.S. territories hold, family, and other personal expen- 4. Data for Thrift Institutions includes ditures including both installment and and possessions, insured by the Fed- Stock Savings Banks, Mutual Savings eral Deposit Insurance Corporation or single payment loans. Net of unearned Banks, Stock Savings & Loan Associa- income on installment loans. National Credit Union Savings Insur- tions and Mutual Savings & Loan Asso- ance Fund. All branches and agencies of ciations that are Federally Chartered or 9. Includes loans to financial institu- foreign banks in the United States, but State Chartered. Data for thrift institu- tions, for purchasing or carrying secu- excluding any in Puerto Rico and U.S. tions regulated by the OCC and FDIC rities, to finance agricultural produc- territories and possessions, are covered are unconsolidated except for operating tion and other loans to farmers (except whether or not insured. Excludes Edge and finance subsidiaries. those secured by real estate), to states Act and agreement corporations that and political subdivisions and public are not subsidiaries of U.S. commercial 5. These institutions are not required to file reports of income. authorities, and miscellaneous types of banks. loans. 6. Includes State Chartered Thrift Institu- 2. Reflects fully consolidated statements tions formerly regulated by the Office of 10. Includes vault cash, cash items in pro- of FDIC-insured U.S. banks—including Thrift Supervision. cess of collection, and balances with their foreign branches, foreign subsid- U.S. and foreign banks and other iaries, branches in Puerto Rico and U.S. 7. Includes loans secured by residential depository institutions (including territories and possessions, and FDIC property, commercial property, farm- demand and time deposits and certifi- insured banks in Puerto Rico and U.S. land (including improvements) and territories and possessions. Excludes unimproved land; and construction bank holding companies. loans secured by real estate. Notes continue on the next page

32 INCOME AND EXPENSES of U.S. Commercial Banks, Thrift Institutions, and Credit Unions for the Twelve Months Ending December 31, 20111 Billions of dollars

Credit U.S. Commercial Banks2 Thrift Institutions4 Unions3

OCC FDIC Regu- Regu- State lated lated State Non- Federal State Federal State Item Total National Member Member Charter Charter6 Charter Charter Operating income: 764 465 89 114 53 15 28 22 Interest and fees on loans 415 235 39 80 32 11 18 15 Other interest and dividend income 113 75 14 12 6 2 3 2 All other operating income 236 155 35 23 14 2 7 5

Operating expenses: 597 355 72 89 45 12 24 19 Salaries and benefits 184 114 25 25 8 4 8 7 Interest on deposits and shares 57 26 6 13 6 2 4 3 Interest on other borrowed money 32 19 3 4 4 1 1 0 Provision for loan and lease losses 78 48 8 13 6 1 2 2 All other operating expenses 243 147 31 33 20 4 9 7

Net operating income 166 110 16 25 8 3 4 3

Securities gains and losses 7 3 0 1 2 0 0 0

Extraordinary items 1 1 0 0 0 (0) 0 0

Income taxes 50 33 5 8 4 1 0 0

Net income 124 81 11 19 7 2 4 3

Memorandum: Number of institutions reporting 14,431 1,310 811 4,149 619 448 4,447 2,647

cates of deposit for all categories of insti- accounts, and miscellaneous assets. For limited life preferred stock, and other tutions). U.S. branches and agencies of foreign nondeposit borrowing. banks, also includes net due from head 11. Includes government and corporate office and other related institutions. 17. Includes depository institutions' own securities, including mortgage-backed mortgage borrowing, liability for capi- securities and obligations of states and 15. Includes demand, savings, and time talized leases, liability on acceptances political subdivisions and of U.S. gov- deposits, (including certificates of executed, various accrual accounts, ernment agencies and corporations. deposit at commercial banks, U.S. and miscellaneous liabilities. For U.S. branches and agencies of foreign banks, branches and agencies of foreign banks, 12. U.S. Treasury securities and securities and savings banks), credit balances at also includes net owed to head office of, and loans to, U.S. government agen- U.S. agencies of foreign banks and share and other related institutions. cies and corporations. balances at savings and loan associa- 18. Includes capital stock, surplus, capital tions and credit unions (including cer- 13. Securities issued by states and politi- reserves, and undivided profits. tificates of deposit, NOW accounts, and cal subdivisions and public authorities, except for savings and loan associa- share draft accounts). For U.S. commer- tions and U.S. branches and agencies of cial banks, includes deposits in foreign NOTE: Data are rounded to nearest bil- foreign banks that do not report these offices, branches in U.S. territories and lion. Consequently, some information securities separately. Loans to states and possessions, and Edge Act and Agree- may not reconcile precisely. Addition- political subdivisions and public author- ment corporation subsidiaries. ally, balances less than $500 million will ities are included in “All other loans and show as zero. lease receivables.” 16. Includes interest-bearing demand notes issued to the U.S. Treasury, borrowing 14. Customers' liabilities on acceptances, from Federal Reserve Banks and Federal real property owned, various accrual Home Loan Banks, subordinated debt,

33

APPENDIX A: RELEVA N T STATUTES

Federal Financial Institutions and loan association, a home- The term of the Chairman of the Examination Council Act stead association, a cooperative Council shall be two years. bank, or a credit union. 12 U.S.C. § 3301. Declaration of (d) Designation of officers and purpose employees 12 U.S.C. § 3303. Financial It is the purpose of this chapter to Institutions Examination Council The members of the Council may, establish a Financial Institutions (a) Establishment; composition from time to time, designate other Examination Council which shall officers or employees of their prescribe uniform principles and There is established the Financial respective agencies to carry out standards for the Federal exami- Institutions Examination Council their duties on the Council. nation of financial institutions which shall consist of— by the Office of the Comptrol- (e) Compensation and expenses ler of the Currency, the Federal (1) the Comptroller of the Currency, Each member of the Council shall Deposit Insurance Corporation, serve without additional compen- the Board of Governors of the Fed- (2) the Chairman of the Board sation but shall be entitled to rea- eral Reserve System, the Federal of Directors of the Federal sonable expenses incurred while Home Loan Bank Board, and the Deposit Insurance Corporation, carrying out his official duties as National Credit Union Adminis- such a member. tration and make recommenda- (3) a Governor of the Board tions to promote uniformity in of Governors of the Federal the supervision of these financial Reserve System designated by 12 U.S.C. § 3304. Costs and expenses institutions. The Council’s actions the Chairman of the Board, of Council shall be designed to promote con- (4) the Director of the One-fifth of the costs and expenses sistency in such examination and Consumer Financial Protection of the Council, including the sala- to insure progressive and vigilant 1 Bureau, ries of its employees, shall be paid supervision. (5) the Chairman of the by each of the Federal financial National Credit Union institutions regulatory agencies. 12 U.S.C. § 3302. Definitions Administration Board; and Annual assessments for such share As used in this chapter— shall be levied by the Council (6) the Chairman of the State based upon its projected budget (1) the term “Federal finan- Liaison Committee for the year, and additional assess- cial institutions regulatory agen- (b) Chairmanship ments may be made during the cies” means the Office of the year, if necessary. Comptroller of the Currency, the The members of the Council shall Board of Governors of the Fed- select the first chairman of the Council. Thereafter the chairman- 12 U.S.C. § 3305. Functions of eral Reserve System, the Federal Council Deposit Insurance Corporation, ship shall rotate among the mem- the Office of Thrift Supervision, bers of the Council. (a) Establishment of principles and the National Credit Union (c) Term of office and standards Administration; The Council shall establish uni- (2) the term “Council” means 1. The Dodd Frank Wall Street Reform form principles and standards the Financial Institutions Exami- and Consumer Protection Act of 2010 and report forms for the examina- nation Council; and amended several provisions in the rel- tion of financial institutions which evant statutes, including excerpts con- tained in this appendix. Changes are shall be applied by the Federal (3) the term “financial institu- financial institutions regulatory tion” means a commercial bank, shown as bolded and italicized. The amendments relating to the Consumer agencies. a savings bank, a trust company, Financial Protection Bureau became a savings association, a building effective on July 21, 2011. (b) Making recommendations

35 regarding supervisory matters and The Council shall conduct schools twice a year with the Council. adequacy of supervisory tools for examiners and assistant exam- Members of the liaison com- iners employed by the Federal mittee shall receive a reasonable (1) The Council shall make financial institutions regulatory allowance for necessary expenses recommendations for uniformity agencies. Such schools shall be incurred in attending meetings. in other supervisory matters, open to enrollment by employ- such as, but not limited to, clas- ees of State financial institu- Members of the Liaison Commit- sifying loans subject to country tions supervisory agencies and tee shall elect a chairperson from risk, identifying financial insti- employees of the Federal Housing among the members serving on tutions in need of special super- Finance Board under conditions the committee. visory attention, and evaluat- specified by the Council. ing the soundness of large loans 12 U.S.C. § 3307. Administration that are shared by two or more (e) Affect on Federal regula- financial institutions. In addi- tory agency research and develop- (a) Authority of Chairman of tion, the Council shall make rec- ment of new financial institutions Council supervisory agencies ommendations regarding the The Chairman of the Council is adequacy of supervisory tools Nothing in this chapter shall be authorized to carry out and to for determining the impact of construed to limit or discour- delegate the authority to carry out holding company operations on age Federal regulatory agency the internal administration of the the financial institutions within research and development of new Council, including the appoint- the holding company and shall financial institutions supervisory ment and supervision of employ- consider the ability of supervi- methods and tools, nor to pre- ees and the distribution of busi- sory agencies to discover pos- clude the field testing of any inno- ness among members, employees, sible fraud or questionable and vation devised by any Federal reg- and administrative units. illegal payments and practices ulatory agency. which might occur in the opera- (b) Use of personnel, services, tion of financial institutions or (f) Annual report and facilities of Federal financial their holding companies. institutions regulatory agencies, Not later than April 1 of each Federal Reserve banks, and Fed- year, the Council shall prepare an (2) When a recommendation eral Home Loan Banks. of the Council is found unac- annual report covering its activi- ceptable by one or more of the ties during the preceding year. In addition to any other authority applicable Federal financial conferred upon it by this chapter, (g) Flood insurance institutions regulatory agencies, in carrying out its functions under the agency or agencies shall sub- The Council shall consult with this chapter, the Council may uti- mit to the Council, within a time and assist the Federal entities for lize, with their consent and to the period specified by the Coun- lending regulation, as such term extent practical, the personnel, cil, a written statement of the is defined in section 4121(a) of services, and facilities of the Fed- reasons the recommendation is Title 42, in developing and coor- eral financial institutions regula- unacceptable. dinating uniform standards and tory agencies, Federal Reserve requirements for use by regulated banks, and Federal Home Loan (c) Development of uniform lending institutions under the Banks, with or without reim- reporting system national flood insurance bursement therefore. program. The Council shall develop uniform (c) Compensation, authority, reporting systems for federally and duties of officers and employ- supervised financial institutions, 12 U.S.C. § 3306. State liaison ees; experts and consultants their holding companies, and non- financial institution subsidiaries of To encourage the application of In addition, the Council may— such institutions or holding com- uniform examination principles panies. The authority to develop and standards by State and Fed- (1) subject to the provisions uniform reporting systems shall eral supervisory agencies, the of Title 5 relating to the com- not restrict or amend the require- Council shall establish a liaison petitive service, classification, ments of section 78l(i) of Title 15. committee composed of five rep- and General Schedule pay resentatives of State agencies rates, appoint and fix the com- (d) Conducting schools for which supervise financial insti- pensation of such officers and examiners and assistant examiners tutions which shall meet at least employees as are necessary to

36 carry out the provisions of this 12 U.S.C. § 3310. Establishment of (2) at regular intervals, pro- chapter, and to prescribe the Appraisal Subcommittee vide notice and solicit public authority and duties of such comment on a particular cat- officers and employees; and There shall be within the Council a egory or categories of regula- (2) obtain the services of such subcommittee to be known as the tions, requesting commentators experts and consultants as are “Appraisal Subcommittee,” which to identify areas of the regula- necessary to carry out the provi- shall consist of the designees of tions that are outdated, unneces- sions of this chapter. the heads of the Federal financial sary, or unduly burdensome. institutions regulatory agencies, the Bureau of Consumer Finan- (c) Complete review 12 U.S.C. § 3308. Access to books, cial Protection, and the Federal accounts, records, etc., by Council Housing Finance Agency. Each The Council or the appropri- such designee shall be a person ate Federal banking agency shall For the purpose of carrying out ensure that the notice and com- this chapter, the Council shall who has demonstrated knowl- edge and competence concern- ment period described in sub- have access to all books, accounts, section (b)(2) of this section is records, reports, files, memoran- ing the appraisal profession. At all times at least one member of conducted with respect to all regu- dums, papers, things, and prop- lations described in subsection (a) erty belonging to or in use by the Appraisal Subcommittee shall have demonstrated knowledge of this section not less frequently Federal financial institutions than once every 10 years. regulatory agencies, including and competence through licen- reports of examination of finan- sure, certification, or professional (d) Regulatory response cial institutions or their holding designation within the appraisal The Council or the appropriate companies from whatever source, profession. Federal banking agency shall— together with workpapers and correspondence files related to 12 U.S.C. § 3311. Required review of (1) publish in the Federal Reg- such reports, whether or not a regulations ister a summary of the com- part of the report, and all without (a) In general ments received under this sec- any deletions. tion, identifying significant Not less frequently than once issues raised and providing every 10 years, the Council and comment on such issues; and 12 U.S.C. § 3309. Risk management each appropriate Federal banking training agency represented on the Council (2) eliminate unnecessary reg- (a) Seminars shall conduct a review of all regu- ulations to the extent that such lations prescribed by the Council action is appropriate. The Council shall develop and or by any such appropriate Fed- (e) Report to Congress administer training seminars in eral banking agency, respectively, risk management for its employ- in order to identify outdated or Not later than 30 days after car- ees and the employees of insured otherwise unnecessary regulatory rying out subsection (d)(1) of this financial institutions. requirements imposed on insured section, the Council shall submit (b) Study of risk management depository institutions. to the Congress a report, which training program (b) Process shall include— Not later than end of the 1-year In conducting the review under (1) a summary of any signifi- period beginning on August 9, subsection (a) of this section, the cant issues raised by public com- 1989, the Council shall— Council or the appropriate Federal ments received by the Council banking agency shall— and the appropriate Federal (1) conduct a study on the fea- banking agencies under this sec- sibility and appropriateness of (1) categorize the regulations tion and the relative merits of establishing a formalized risk described in subsection (a) of such issues; and management training program this section by type (such as con- designed to lead to the certifica- sumer regulations, safety and (2) an analysis of whether tion of Risk Management Ana- soundness regulations, or such the appropriate Federal bank- lysts; and other designations as deter- ing agency involved is able to mined by the Council, or the address the regulatory burdens (2) report to the Congress the appropriate Federal banking associated with such issues by results of such study. agency); and regulation, or whether such bur-

37 dens must be addressed by leg- report to the Congress not reports, at the call of the Chairper- islative action. later than June 15 of each year son or a majority of its members that describes the manner in when there is business to be con- which each function assigned ducted. A majority of members of Excerpts from Statute to the Appraisal Subcommit- the Appraisal Subcommittee shall Governing Appraisal tee has been carried out during constitute a quorum but 2 or more Subcommittee the preceding year. The report members may hold hearings. Deci- shall also detail the activities sions of the Appraisal Subcom- 12 U.S.C. § 3332. Functions of of the Appraisal Subcommit- mittee shall be made by the vote Appraisal Subcommittee tee, including the results of all of a majority of its members. The audits of State appraiser regu- subject matter discussed in any (a) In general latory agencies, and provide closed or executive session shall be The Appraisal Subcommittee an accounting of disapproved described in the Federal Register shall— actions and warnings taken notice of the meeting. in the previous year, includ- (1) monitor the requirements ing a description of the condi- established by States— tions causing the disapproval Excerpts from Home Mortgage (A) for the certification and actions taken to achieve Disclosure Act and licensing of individuals compliance. 12 U.S.C. § 2801. Congressional who are qualified to perform (6) maintain a national reg- findings and declaration of purpose appraisals in connection with istry of appraisal management federally related transac- companies that either are regis- (a) Findings of Congress tions, including a code of tered with and subject to super- The Congress finds that some professional responsibility; vision of a State appraiser cer- and depository institutions have some- tifying and licensing agency or times contributed to the decline of (B) for the registration and are operating subsidiaries of a certain geographic areas by their supervision of the operations Federally regulated financial failure pursuant to their charter- and activities of an appraisal institution. ing responsibilities to provide ade- management company; and (b) Monitoring and reviewing quate home financing to qualified applicants on reasonable terms (2) monitor the requirements Foundation and conditions. established by the Federal The Appraisal Subcommittee shall financial institutions regula- monitor and review the practices, (b) Purpose of chapter tory agencies with respect to— procedures, activities, and organi- The purpose of this chapter is to (A) appraisal standards for zational structure of the Appraisal provide the citizens and public federally related transactions Foundation. officials of the United States with under their jurisdiction, and sufficient information to enable 12 U.S.C. § 3333. Chairperson of them to determine whether depos- (B) determinations as to Appraisal Subcommittee; term of itory institutions are filling their which federally related trans- Chairperson; meetings obligations to serve the housing actions under their jurisdic- needs of the communities and tion require the services of a (a) Chairperson neighborhoods in which they are State certified appraiser and located and to assist public offi- which require the services of The Council shall select the Chair- cials in their determination of the a State licensed appraiser; person of the subcommittee. The term of the Chairperson shall be distribution of public sector invest- (3) maintain a national reg- two years. ments in a manner designed to istry of State certified and improve the private investment licensed appraisers who are eli- (b) Meetings; quorum; voting environment. gible to perform appraisals in The Appraisal Subcommittee shall (c) Construction of chapter federally related transactions; meet in public session after notice and in the Federal Register, but may Nothing in this chapter is intended to, nor shall it be construed to, (4) Omitted. close certain portions of these meetings related to personnel and encourage unsound lending prac- (5) transmit an annual review of preliminary State audit tices or the allocation of credit.

38 * * * * * 2805(b) of this title) and which title. The Council shall also pro- have a home office or branch office duce tables indicating, for each 12 U.S.C. § 2803. Maintenance of within such primary metropolitan primary metropolitan statistical records and public disclosure statistical area, metropolitan sta- area, metropolitan statistical area, tistical area, or consolidated met- or consolidated metropolitan sta- * * * ropolitan statistical area that is not tistical area that is not comprised (f) Data disclosure system; oper- comprised of designated primary of designated primary metro- ation, etc. metropolitan statistical areas. politan statistical areas, aggregate lending patterns for various cat- The Federal Financial Institutions * * * * * egories of census tracts grouped Examination Council, in consul- according to location, age of hous- 12 U.S.C. § 2809. Compilation of tation with the Secretary, shall ing stock, income level, and racial aggregate data implement a system to facilitate characteristics. access to data required to be dis- (a) Commencement; scope of (b) Staff and data processing closed under this section. Such data and tables system shall include arrange- resources ments for a central depository of Beginning with data for calendar The Board shall provide staff and data in each primary metropoli- year 1980, the Federal Financial data processing resources to the tan statistical area, metropolitan Institutions Examination Council Council to enable it to carry out statistical area, or consolidated shall compile each year, for each the provisions of subsection (a) of metropolitan statistical area that primary metropolitan statistical this section. is not comprised of designated area, metropolitan statistical area, primary metropolitan statistical or consolidated metropolitan sta- (c) Availability to public areas. Disclosure statements shall tistical area that is not comprised be made available to the pub- of designated primary metropoli- The data and tables required pur- lic for inspection and copying at tan statistical areas, aggregate data suant to subsection (a) of this sec- such central depository of data for by census tract for all depository tion shall be made available to the all depository institutions which institutions which are required to public no later than December 31 are required to disclose informa- disclose data under section 2803 of the year following the calendar tion under this section (or which of this title or which are exempt year on which the data is based. are exempted pursuant to section pursuant to section 2805(b) of this

39

APPENDIX B: 2011 AUDIT REPORT

Deloitte & Touche LLP Suite 800 1750 Tysons Boulevard McLean, VA 22102-4219 USA Tel: +1 703 251 1000 Fax: +1 703 251 3400 www.deloitte.com

INDEPENDENT AUDITORS’ REPORT

To the Federal Financial Institutions Examination Council: Washington, D.C.

We have audited the accompanying balance sheets of the Federal Financial Institutions Examination Council (the “Council”) as of December 31, 2011 and 2010, and the related statements of revenues and expenses and changes in cumulative results of operations, and cash flows for the years then ended. These financial statements are the responsibility of the Council’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Council’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such financial statements present fairly, in all material respects, the financial position of the Federal Financial Institutions Examination Council as of December 31, 2011 and 2010, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

In accordance with Government Auditing Standards, we have also issued our report dated March 5, 2012, on our consideration of the Council’s internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit.

March 5, 2012

Member of Deloitte Touche Tohmatsu

41 FEDERAL FINANCIAL INSTITUTIONS EXAMINATION COUNCIL Balance Sheets

As of December 31, 2011 2010 ASSETS CURRENT ASSETS Cash $ 543,453 $ 746,815 Accounts receivable from member organizations 785,708 1,276,250 Other accounts receivable—net 91,520 104,441

Total current assets 1,420,681 2,127,506

NONCURRENT ASSETS

Furniture and equipment—at cost 20,999 20,999 Furniture and equipment leased—at cost 198,485 198,485 Central Data Repository software—at cost 20,120,566 19,371,661 Home Mortgage Disclosure Act software—at cost 2,783,868 2,783,868 Less accumulated depreciation (15,574,489) (12,704,895)

Net capital assets 7,549,429 9,670,118

TOTAL ASSETS $ 8,970,110 $ 11,797,624

LIABILITIES AND CUMULATIVE RESULTS OF OPERATIONS

CURRENT LIABILITIES Accounts payable and accrued liabilities payable to member organizations $ 805,796 $ 839,152 Other accounts payable and accrued liabilities 285,947 988,059 Accrued annual leave 22,971 27,746 Capital lease payable 39,376 37,828 Deferred revenue 3,125,930 2,746,667

Total current liabilities 4,280,020 4,639,452

LONG-TERM LIABILITIES Capital lease payable 102,825 142,202 Deferred revenue 4,285,874 6,746,128 Deferred rent 9,996 6,605

Total long-term liabilities 4,398,695 6,894,935

Total liabilities 8,678,715 11,534,387

CUMULATIVE RESULTS OF OPERATIONS 291,395 263,237

TOTAL LIABILITIES AND CUMULATIVE RESULTS OF OPERATIONS $ 8,970,110 $ 11,797,624

See notes to financial statements.

42 FEDERAL FINANCIAL INSTITUTIONS EXAMINATION COUNCIL Statements of Revenues and Expenses and Changes in Cumulative Results of Operations

For the years ended December 31, 2011 2010 REVENUES Assessments on member organizations $ 687,107 $ 632,344 Central Data Repository 4,936,912 4,452,286 Home Mortgage Disclosure Act 3,727,927 3,433,075 Tuition 3,246,549 2,662,193 Community Reinvestment Act 946,928 1,024,844 Uniform Bank Performance Report 351,646 464,633

Total revenues 13,897,069 12,669,375

EXPENSES

Data processing 4,164,479 4,529,275 Professional fees 4,121,224 3,635,374 Salaries and related benefits 1,781,660 1,739,031 Depreciation 2,869,594 1,877,343 Rental of office space 264,989 264,989 Adminstration fees 281,000 245,000 Travel 242,659 170,404 Other seminar expenses 33,526 30,297 Rental and maintenance of office equipment 27,544 48,313 Office and other supplies 56,237 25,033 Printing 18,389 18,380 Postage 2,564 1,660 Miscellaneous 5,046 7,021

Total expenses 13,868,911 12,592,120

RESULTS OF OPERATIONS 28,158 77,255

CUMULATIVE RESULTS OF OPERATIONS—Beginning of year 263,237 185,982

CUMULATIVE RESULTS OF OPERATIONS—End of year $ 291,395 $ 263,237

See notes to financial statements.

43 FEDERAL FINANCIAL INSTITUTIONS EXAMINATION COUNCIL Statements of Cash Flows

For the years ended December 31, 2011 2010 CASH FLOWS FROM OPERATING ACTIVITIES Results of operations $ 28,158 $ 77,255 Adjustments to reconcile results of operations to net cash provided by operating activities: Depreciation 2,869,594 1,877,343 (Increase) decrease in assets: Accounts receivable from member organizations 490,542 (275,247) Other accounts receivable 12,921 (13,812) Increase (decrease) in liabilities: Accounts payable and accured liabilities payable to member organizations (33,356) (77,379) Other accounts payable and accrued liabilities (284,515) (162,453) Accrued annual leave (4,775) 7,629 Deferred revenue (current and non-current) (2,080,991) (276,603) Deferred rent 3,391 6,605

Net cash provided by operating activities 1,000,969 1,163,338

CASH FLOWS FROM INVESTING ACTIVITIES Capital expenditures (1,169,016) (1,427,853)

CASH FLOWS FROM FINANCING ACTIVITIES Capital lease payments (35,315) (11,370)

NET INCREASE (DECREASE) IN CASH (203,362) (275,885)

CASH BALANCE—Beginning of year 746,815 1,022,700

CASH BALANCE—End of year $ 543,453 $ 746,815

See notes to financial statements.

44 Notes to Financial Statements as of and for ments in accordance with accounting princi- cial statements and the reported amounts of the Years Ended December 31, 2011 and 2010 ples generally accepted in the United States of revenues and expenses during the reporting America (GAAP). period. Actual results could differ from those 1. Organization and Purpose estimates. Revenues—Assessments are made on member The Federal Financial Institutions Examina- organizations to fund the Council's operations Allowance for Doubtful Accounts—Accounts tion Council (the Council) was established based on expected cash needs. Amounts over- receivable for non-members are shown net under Title X of the Financial Institutions Reg- or under- assessed due to differences between of the allowance for doubtful accounts. ulatory and Interest Rate Control Act of 1978. actual and expected cash needs are presented Accounts receivable considered uncollectible The purpose of the Council is to prescribe in the “Cumulative Results of Operations” are charged against the allowance account in uniform principles and standards for the fed- line item during the year and then are used to the year they are deemed uncollectible. The eral examination of financial institutions and offset or increase the next year’s assessment. allowance for doubtful accounts is adjusted to make recommendations to promote uni- Deficits in “Cumulative Results of Opera- monthly, based upon a review of outstanding formity in the supervision of these financial tions” can be recouped in the following year’s receivables. institutions. The five agencies which were rep- assessments. resented on the Council during 2011, referred 3. Transactions with Member Organizations to hereinafter as member organizations, are The Council provides seminars in the Wash- as follows: ington, D.C. area and at locations through- 2011 2010 out the country for member organizations Accounts Receivable Board of Governors of the Federal Reserve and other agencies. The Council also coordi- System (FRB) Board of Governors nates the production and distribution of the of the Federal Consumer Financial Protection Bureau Uniform Bank Performance Reports (UBPR) (CFPB) Reserve System $ 132,539 $ 290,047 through the FDIC. Tuition and UBPR revenue Consumer Financial Federal Deposit Insurance Corporation is adjusted at year-end to match expenses (FDIC) Protection Bureau 0 0 incurred as a result of providing education Federal Deposit Insur- National Credit Union Administration classes and UBPR services. For differences (NCUA) ance Corporation 194,230 467,726 between revenues and expenses, member National Credit Union Office of the Comptroller of the Currency agencies are assessed an additional amount (OCC) Administration 46,051 47, 501 or credited a refund based on each member’s Office of the Comp- In accordance with the Financial Services proportional cost for the Examiner Educa- troller of the Regulatory Relief Act of 2006, a representa- tion and UBPR budget. The Council also rec- Currency 412,888 416,572 tive state regulator was added as a full voting ognizes revenue from member agencies for member of the Council in October 2006. expenses incurred related to the Community $ 785,708 $1,221,846 Reinvestment Act. The Council was given additional statutory Accounts Payable and responsibilities by section 340 of the Housing Capital Assets—Furniture and equipment is Accrued Liabilities and Community Development Act of 1980, recorded at cost less accumulated deprecia- Board of Governors Public Law 96-399. Among these responsi- tion. Depreciation is calculated on a straight- of the Federal bilities are the implementation of a system to line basis over the estimated useful lives of Reserve System $ 494,234 $ 579,792 facilitate public access to data that depository the assets, which range from four to ten years. Consumer Financial institutions must disclose under the Home Upon the sale or other disposition of a depre- Protection Bureau 0 0 Mortgage Disclosure Act of 1975 (HMDA) ciable asset, the cost and related accumulated Federal Deposit and the aggregation of annual HMDA data, depreciation are removed and any gain or Insurance by census tract, for each metropolitan statisti- loss is recognized. The Central Data Reposi- Corporation 175,940 126,265 cal area. tory (CDR) and the HMDA rewrite, internally National Credit Union developed software projects, are recorded Administration 27,080 7,624 On July 21, 2010, the Dodd-Frank Wall Street at cost as required by the Internal Use Soft- Office of the Comp- Reform and Consumer Protection Act of 2010 ware Topic of Financial Accounting Stan- troller of the (Dodd-Frank Act) was signed into law. This dards Board (FASB) Accounting Standards Currency 108,542 124,321 legislation substitutes the director of the Con- Codification. sumer Financial Protection Bureau for the $ 805,796 $ 838,002 director of the Office of Thrift Supervision Deferred Revenue—Deferred revenue includes (OTS) as a member of the Council effective cash collected and accounts receivable related Operations July 21, 2011. to the CDR and HMDA. Council operat- ing expenses The Council’s financial statements do not Deferred Rent—The lease for office and class- reimbursed by include financial data for the Council’s room space contains scheduled rent increases members $ 687,107 $ 632,344 Appraisal Subcommittee (the Subcommittee). over the term of the lease. As required by the FRB-provided admin- The Subcommittee was created pursuant to Leases Topic of the FASB Accounting Stan- istrative support $ 281,000 $ 245,000 Public Law 101–73, Title XI of the Financial dards Codification, rent abatements and FRB-provided data Institutions Reform, Recovery, and Enforce- scheduled rent increases must be considered processing $ 4,164,479 $ 4,529,275 ment Act of 1989. Although it is a subcommit- in determining the annual rent expense to be tee of the Council, the Appraisal Subcommit- recognized. The deferred rent represents the tee maintains separate financial records and difference between the actual lease payments administrative processes. The Council is not and the rent expense recognized. responsible for any debts incurred by the Sub- committee, nor are Subcommittee funds avail- Estimates—The preparation of financial state- able for use by the Council. ments in conformity with GAAP requires management to make estimates and assump- 2. Significant Accounting Policies tions that affect the reported amounts of assets and liabilities and the disclosure of contingent The Council prepares its financial state- assets and liabilities at the date of the finan- Notes continue on the following page.

45 The Council does not directly employ person- CDR Revenues—The Council is funding the 2011 2010 nel, but rather member organizations detail project by billing the three participating Coun- personnel to support Council operations. cil member organizations (FRB, FDIC, and Total HMDA Revenue These personnel are paid through the pay- OCC). Funding for the years ended December The Council recog- roll systems of member organizations. Sala- 31, 2011 and 2010, is as follows: nized the following ries and fringe benefits, including retirement revenue from mem- benefit plan contributions, are reimbursed to ber organizations for these organizations. The Council does 2011 2010 the production and not have any post-retirement or post- Deferred Revenue distribution of reports employment benefit liabilities since Coun- Beginning balance $ 6,708,927 $ 7,424,718 under the HMDA; cil personnel are included in the plans of the includes the deferred Additions 748,906 1,140,389 member organizations. Due to organizational revenue recognized Less revenue changes resulting from the Dodd-Frank Act, in 2011: $ 2,857,085 $ 2,537,870 the OCC absorbed all financial related activ- recognized (2,319,521) (1,856,180) ity of the OTS on July 21, 2011. As of Decem- The Council recog- ber 31, 2010, the OTS had accounts receivable Ending balance $ 5,138,312 $ 6,708,927 nized the following of $54,404 and accounts payable and accrued revenue from the liabilities of $1,150 that are not reflected in Current portion Department of Hous- the table above. These amounts were settled deferred revenue $ 2,569,156 $ 2,236,309 ing and Urban Devel- by and with the OTS during 2011 and thus Long-term deferred opment's participa- were no longer outstanding as of December revenue 2,569,156 4,472,618 tion in the HMDA 31, 2011. Total Deferred project: 556,207 588,421 $ 5,138,312 $ 6,708,927 Member organizations are not reimbursed for Revenue The Council recog- the costs of personnel who serve as Council nized the following members and on the various task forces and Total CDR Revenue revenue from the Mortgage Insurance committees of the Council. The value of these Deferred revenue Companies of Amer- contributed services is not included in the recognized $ 2,319,521 $ 1,856,180 accompanying financial statements. Hosting and ica for performing maintenance HMDA-related work: 314,635 306,784 4. Central Data Repository Software revenue 2,617,391 2,596,106 Total HMDA $ 3,727,927 $ 3,433,075 In 2003, the Council entered into an agree- Total CDR Revenue $ 4,936,912 $ 4,452,286 ment with UNISYS to enhance the methods Depreciation and systems used to collect, validate, process, Depreciation Depreciation for and distribute Call Report information, and the HMDA Rewrite to store this information in CDR. The CDR Depreciation for the project $ 510,376 $ 0 was placed into service in October 2005. At CDR project $ 2,319,521 $ 1,856,180 that time, the Council began depreciating the Average monthly Average monthly CDR project on the straight-line basis over its depreciation $ 193,293 $ 154,682 depreciation $ 46,398 $ 0 estimated useful life of 63 months. In 2009, the Council reevaluated the useful life of CDR 5. Home Mortgage Disclosure Act Software and decided to extend the estimated use- 6. Operating Leases ful life by an additional 36 months based on The Council entered into an agreement with FRB to maintain and support the HMDA pro- The FRB, on behalf of the Council, entered enhanced functionality of the software. The into an operating lease at market value with Council records depreciation expenses and cessing system. In 2007, the Council began a rewrite of the entire HMDA processing sys- the FDIC in January 2010 to secure office and recognizes the same amount of revenue. The classroom space. value of the CDR asset as of December 31, tem, which went into service in 2011. The 2011 and 2010, includes the fully accrued and Council began depreciating the HMDA proj- paid cost. ect on the straight-line basis over its estimated Years endingg December 31 Amount useful life of 60 months. The financial activity associated with the processing system for the 2012 $ 264,900 2011 2010 years ended December 31, 2011 and 2010, is 2013 8 26 ,292 Capital Asset CDR as follows: 2014 271,772 Beginning balance $19,371,661 $18,231,272 Total minimum lease payments $ 804,964 Software placed in 2011 2010 use during the Deferred Revenue Rental expenses under this operating lease year 748,905 1,140,389 were $264,989 and $264,989 as of December Beginning balance $ 2,783,868 $ 2,344,680 31, 2011 and 2010, respectively. Total asset $20,120,566 $19,371,661 Additions 0 439,188 Less revenue 7. Capital Leases Accounts Payable and recognized (510,376) 0 In December 2009 and November 2010, Accrued Liabilities Ending balance $ 2,273,492 $ 2,783,868 the Council entered into capital leases Related to CDR for printing equipment. Furniture and Payable to UNISYS Current portion equipment includes $198,485 for the capital for the CDR deferred revenue $ 556,774 $ 510,358 leases. Accumulated depreciation is $60,860 project $ 216,012 $ 865,630 Long-term deferred and $21,163 for 2011 and 2010, respectively. revenue 61,71 ,718 02,273,51 Contingent rentals for excess usage of the Total Deferred printing equipment amounted to $13,531 and Revenue $ 2,273,492 $ 2,783,868 $11,049 in 2011 and 2010, respectively.

46 The future minimum lease payments required 8. Subsequent Events under the capital leases and the present value of the net minimum lease payments as of There were no subsequent events that December 31, 2011, are as follows: require adjustments to or disclosures in the financial statements as of December 31, 2011. Years endingg December 31 Amount Subsequent events were evaluated through March 5, 2012, which is the date the financial 2012 $ 59,089 statements were available to be issued. 2013 599,089 2014 599 ,08 2015 31,736

Total minimum lease payments 209,003

Less amount representing maintenance (57,761) Net minimum lease payments 151,242 Less amount representing interest (9,041) Net minimum lease payments 142,201 Less current maturities of capital lease payments (39,376) Long-term capital lease obligations $ 102,825

47 Deloitte & Touche LLP Suite 800 1750 Tysons Boulevard McLean, VA 22102-4219 USA Tel: +1 703 251 1000 Fax: +1 703 251 3400 www.deloitte.com

INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

To the Federal Financial Institutions Examination Council: Washington, D.C.

We have audited the financial statements of the Federal Financial Institutions Examination Council (the “Council”) as of and for the years ended December 31, 2011 and 2010, and have issued our report thereon dated March 5, 2012. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.

Internal Control over Financial Reporting

Management of the Council is responsible for establishing and maintaining effective internal control over financial reporting. In planning and performing our audit, we considered the Council’s internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Council’s internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Council’s internal control over financial reporting.

A deficiency in internal control over financial reporting exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A significant deficiency is a deficiency, or combination of deficiencies, in internal control over financial reporting that is less severe than a material weakness, yet important enough to merit attention by those responsible for oversight of the Council’s financial reporting. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Council’s financial statements will not be prevented or detected on a timely basis.

Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be deficiencies, significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above.

Member of Deloitte Touche Tohmatsu

48 Compliance and Other Matters

As part of obtaining reasonable assurance about whether the Council’s financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

Distribution

This report is intended solely for the information and use of the Council, management, others within the organization, the Office of Inspector General, and the United States Congress, and is not intended to be and should not be used by anyone other than these specified parties.

March 5, 2012

Member of Deloitte Touche Tohmatsu

49

APPENDIX C: MAPS OF AGENCY REGIONS AND DISTRICTS

52 Board of Governors of the Federal Reserve System 53 Consumer Financial Protection Bureau 54 Federal Deposit Insurance Corporation 55 National Credit Union Administration 56 Office of the Comptroller of the Currency

51 THE FEDERAL RESERVE SYSTEM DISTRICTS

WA ME MT ND MN 1

VT MI NY WI 9 NH Boston SD OR WY Minneapolis 2 MA CT CA ID RI NV IA PA NJ NE MI OH 3 New York UT IL Philadelphia 7 ChicagoChicagoChicago IN Cleveland 12 MD CO DE WV San Francisco MO 4 Washington, D.C. 10 KS Kansas City St. Louis Richmond VA KY AZ 8 NC NM OK 5 AR TX TN SC MS AL GA Atlanta

Dallas LA 6

FL 11

ALASKA

HAWAII

12

52 CONSUMER FINANCIAL PROTECTION BUREAU

WA ME MT ND MN Northeast

VT MI NY WI NH SD OR WY MA CT CA ID RI NV IA PA New York NE MI UT Chicago IN OH NJ MD CO DE MO WV KS Midwest Washington, D.C. San Francisco West IL VA KY AZ NC NM OK TN AR TX SC GA MS AL

LA Southeast

FL

ALASKA HAWAII West

53 FEDERAL DEPOSIT INSURANCE CORPORATION REGIONS (SUPERVISION AND COMPLIANCE)

WA ME MT ND MN New York

VT MI RegionNY WI NH SD OR WY MA CT CA ID Kansas City RI NV IA PA NJ NE MI UT IL OH Region IN MD CO Chicago DE San Francisco MO WV KS Region Region VA KY AZ NC TN NM OK AR TX SC MS AL GA Atlanta LA Region Dallas Region FL

ALASKA PUERTO RICO VIRGIN ISLANDS

HAWAII

GUAM

San Francisco Region New York Region

* Two area offices are located in Boston (reports to New York) and Memphis (reports to Dallas)

54 NATIONAL CREDIT UNION ADMINISTRATION

WA ME MT ND MN

VT MI NY WI NH SD OR WY I MA Albany I CT CA ID RI NV IA MI PA NJ NE UT IN OH II MD I CO IV DE MO WV Washington, DC KS V IL VA KY II AZ NC NM OK TN AR TX III SC GA MS AL Atlanta Tempe LA

FL

Austin

AMERICAN ALASKA SAMOA PUERTO RICO VIRGIN ISLANDS HAWAII

GUAM

V III

NCUA2 /1/11 55 COMPTROLLER OF THE CURRENCY DISTRICT ORGANIZATION

WA ME MT Northeastern ND MN

DistrictVT MI NY WI NH SD OR WY Central MA CT CA ID RI District New York NV IA PA NJ NE MI UT Chicago IN OH MD CO DE MO WV Washington, D.C. KS Western District Denver IL KY VA AZ NC TN NM OK AR TX SC MS AL GA Southern Dallas LA District FL

ALASKA PUERTO RICO VIRGIN ISLANDS

HAWAII

GUAM

Western District Northeastern District

56 APPENDIX D: ORGANIZATIONAL LISTING OF PERSONNEL

Organization, Douglas Foster Task Force on Examiner Education December 31, 2011 Commissioner Texas Department of Savings Matthew J. Biliouris, Chairman Members of the Council and Mortgage Lending (NCUA) Shawn Clark (OCC) Debbie Matz, Chairman Charles A. Vice Norbert Cieslack (FRB) Chairman Commissioner Philip D. Mento (FDIC) National Credit Union Kentucky Department of Paul Sanford (CFPB) Administration (NCUA) Financial Institutions Charlotte Nicholson (SLC Chair John Walsh, Vice Chairman Representative) Acting Comptroller of the Currency Council Staff Officer Task Force on Information Sharing Office of the Comptroller of the Charles Lacek, Chairman (FDIC) Judith E. Dupre Currency (OCC) Jami Pictroski (CFPB) Executive Secretary Daniel K. Tarullo Catherine Yao (NCUA) Member Robin Stefan (OCC) Board of Governors of the Michael Kraemer (FRB) Federal Reserve System (FRB) Interagency Staff Groups John Kolhoff (SLC Chair Representative) Martin J. Gruenberg Agency Liaison Group Acting Chairman Larry Fazio (NCUA) Task Force on Reports Federal Deposit Insurance John C. Lyons (OCC) Corporation (FDIC) Robert F. Storch, Chairman (FDIC) Arthur W. Lindo (FRB) David Evans (CFPB) Vacant Sandra Thompson (FDIC) Virginia L. Phillips (NCUA) Director Steven Antonakes (CFPB) Kathy K. Murphy (OCC) Consumer Financial Protection Michael Stevens (SLC Chair Arthur W. Lindo (FRB) Bureau (CFPB) Representative) LeAnn M. Meyer (SLC Chair John Munn Representative) State Liaison Committee (SLC) Legal Advisory Group Chairman Michael J. McKenna, Chairman Task Force on Supervision Director (NCUA) John Lyons, Chairman (OCC) Nebraska Department of Julie L. Williams (OCC) Patrick M. Parkinson (FRB) Banking & Finance Scott Alvarez, (FRB) Sandra Thompson (FDIC) Michael H. Krimminger (FDIC) Steven Antonakes (CFPB) Leonard Kennedy (CFPB) State Liaison Committee (SLC) Matthew Biliouris (NCUA) Margaret Liu (SLC Chair Charles A. Vice (SLC Chair John Munn, Chairman Representative (CSBS)) Representative) Director Nebraska Department of Task Force on Consumer Compliance Task Force on Surveillance Systems Banking & Finance David Cotney, Chairman (SLC Robin Stefan, Chairman (OCC) David Cotney Chair Representative) Matt Mattson (FRB) Commissioner Grovetta N. Gardineer (OCC) Charles Collier (FDIC) Massachusetts Division of Banks Carol Evans (FRB) Andrew Trueblood (CFPB) Harold E. Feeney Luke H. Brown (FDIC) Lucinda V. Johnson (NCUA) Commissioner April Breslaw (CFPB) Bob Bacon (SLC Chair Texas Credit Union Department Moisette Green (NCUA) Representative)

57 Staff Members of the FFIEC Shown are the FFIEC staff mem- bers at the Seidman Center in Arlington, Virginia, where they have their offices and classrooms for examiner education programs.

Retirement of Long-Term UBPR Coordinator John Smullen, UBPR Coordina- tor for the Council retired in the second quarter of 2011 after 41 years of government service. After serving two decades with the OCC, John was a key member of the FFIEC Task Force on Surveil- lance Systems for the last 20 years. His expertise and dedication ensured the UBPR was both con- Federal Financial Institution Examination Council staff members (from left to right): Ernie sistently maintained and regularly Larkins, Rosanna Piccirilli, Michelle Clark, Cathy Pritchard, David Vallee, Darlene Callis, Karen enhanced to serve the examination Smith, Judith Dupre, Jennifer Herring, Robert Basinger, Melanie Middleton, Juliet Pradier, and and surveillance needs of the fed- Cynthia Curry-Daniel. eral and state banking agencies. Notably, John was instrumen- tal in successfully moving UBPR processing to the CDR in 2010. His institutional knowledge was greatly valued.

58