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2013 Annual Performance Plan

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Supervision Program

The FDIC’s Supervision Program promotes the safety and soundness of FDIC-supervised insured depository institutions, protects consumer rights, and promotes community investment initiatives by FDIC-supervised institutions.  In 2013, the FDIC will continue its efforts to increase the effectiveness and efficiency of all of its supervisory programs in light of ongoing industry consolidation, new technologies, and product innovation, which have resulted in larger, more complex banking organizations.  The FDIC will continue to increase the resources dedicated to analyzing the risks posed by these larger, more complex financial institutions, particularly those that are systemically important.  The FDIC will also continue to assess and modify, as appropriate, its examination procedures for all institutions given the changing risk profiles of the industry and individual institutions.

The FDIC is the primary federal regulator for state-chartered banks and savings institutions that are not members of the Federal Reserve System, generally known as state nonmember banks and state-chartered thrifts.  This includes state-licensed insured branches of foreign banks and state-chartered savings institutions.  As insurer, the FDIC also has special (back-up) examination authority for state member banks that are supervised by the Federal Reserve Board (FRB) and national banks and thrift institutions that are supervised by the Office of the Comptroller of the Currency (OCC).  The FDIC’s roles as an insurer and primary supervisor are complementary, and many activities undertaken by the FDIC support both the insurance and supervision programs.  Through the review of examination reports, off-site monitoring tools, participation in examinations conducted by other federal regulators, and, where appropriate, special (back-up) examination activities, the FDIC regularly monitors the potential risks at all insured institutions, including those for which it is not the primary federal regulator.

DFA expanded the FDIC’s statutory responsibilities beyond insured depository institutions to bank holding companies with more than $50 billion in assets and nonbank financial companies that are designated as systemically important financial institutions (SIFIs) by the Financial Stability Oversight Council (FSOC).  DFA designates the FRB as the primary supervisor of these companies, but the FDIC has established on- and off-site monitoring programs and has certain statutory back-up authorities for these companies.  The purpose of the FDIC monitoring and risk assessment activities for these institutions is, where possible, to mitigate identified risks and to be prepared, if necessary, to conduct an orderly liquidation of the company. 

As the primary federal regulator of all insured state nonmember banks and state-chartered thrifts, the FDIC performs periodic risk management examinations of these institutions to assess their overall financial condition, management policies and practices, and compliance with applicable laws and regulations.  Through the examination process, the FDIC also assesses the adequacy of management and internal control systems to identify and control risks and to detect the risks of fraud or insider abuse.  In addition, the FDIC uses off-site monitoring programs to enhance its ability to promptly identify emerging safety-and-soundness issues.

The FDIC conducts separate examinations to assess an institution’s compliance with consumer protection statutes and regulations for all state nonmember banks that are not subject to the primary jurisdiction of the Consumer Financial Protection Bureau (CFPB).  The FDIC also conducts separate Community Reinvestment Act (CRA) examinations for all state nonmember banks.  As part of the compliance examination process, the FDIC reviews substantive compliance issues as well as the accuracy and completeness of information and disclosures that institutions provide to consumers.

If weaknesses are identified through the examination process, the FDIC promptly takes appropriate supervisory action.  Formal and informal enforcement actions may be issued for institutions identified as having significant weaknesses or found to be operating in a deteriorated financial condition.  The institution must operate under the action until these weaknesses are remedied.  Noncompliance with consumer protection or fair lending laws can result in civil liability and negative publicity as well as the imposition of formal or informal enforcement actions by the FDIC to correct the identified violations.

The FDIC also investigates consumer complaints about FDIC-supervised insured depository institutions.  Consumers write or electronically submit to the FDIC complaints and inquiries regarding consumer protection and fair lending issues.  Through its investigation of and response to consumer complaints and inquiries, the FDIC attempts to help consumers better understand their rights under federal consumer protection and fair lending laws.  The FDIC monitors the level of public satisfaction with its responses to consumer complaints and inquiries.

In addition, the FDIC acts on applications from FDIC-supervised insured depository institutions to undertake new or expanded business activities.  The FDIC evaluates various factors, including capital adequacy, quality of management, financial condition, and compliance with applicable laws and regulations.  When an institution applies to expand its business activities within the insured depository institution system, the FDIC also considers an institution’s compliance with consumer protection, fair lending, and privacy laws and its performance under the CRA.  In addition, it also ensures compliance with the Statement of Policy on Qualifications for Failed Bank Acquisitions.

Information about the FDIC’s supervisory program, including laws, regulations, and regulatory guidance, is available at www.fdic.gov.  The FDIC’s semiannual Supervisory Insights journal provides information about bank supervision for bankers, bank examiners, and other practitioners.


The following table depicts the strategic goal, strategic objective and annual performance goals for the Risk Management component of the Supervision Program.

Strategic Goal

Strategic Objective

Annual Performance Goals

FDIC-supervised institutions are safe and sound.

The FDIC exercises its statutory authority, in cooperation with primary federal regulators and state agencies, to ensure that all FDIC-insured institutions appropriately manage risk.

Conduct on-site risk management examinations to assess the overall financial condition, management practices and policies, and compliance with applicable laws and regulations of FDIC-supervised depository institutions.  When problems are identified, promptly implement appropriate corrective programs, and follow up to ensure that identified problems are corrected.(2.1-1)

Assist in protecting the infrastructure of the U.S. banking system against terrorist financing, money laundering, and other financial crimes. (2.1-2)

More closely align regulatory capital standards with risk and ensure that capital is maintained at prudential levels. (2.1-3)

Identify and address risks in financial institutions designated as systemically important. (2-1-4)



 

The following table depicts the strategic goal, strategic objectives, and annual performance goals for the Compliance and Consumer Affairs components of the Supervision Program.

Strategic Goal

Strategic Objectives

Annual Performance Goals

Consumers’ rights are protected, and FDIC-supervised institutions invest in their communities.

FDIC-supervised institutions comply with consumer protection, CRA, and fair lending laws and do not engage in unfair or deceptive practices.

Conduct on-site CRA and compliance examinations to assess compliance with applicable laws and regulations by FDIC-supervised depository institutions.  When violations are identified, promptly implement appropriate corrective programs, and follow up to ensure that identified problems are corrected. (3.1-1)

 
Consumers have access to accurate and easily understood information about their rights and the disclosures due them under consumer protection and fair lending laws.  

Effectively investigate and respond to written consumer complaints and inquiries about FDIC-supervised financial institutions. (3.2-1)

The public has fair access to banking services and is treated equitably by FDIC-supervised institutions. Promote economic inclusion and access to responsible financial services through supervisory, research, policy, and consumer/community affairs initiatives. (3.3-1)

 


STRATEGIC GOAL 2:
FDIC-insured institutions are safe and sound.


STRATEGIC OBJECTIVE 2.1
The FDIC exercises its statutory authority, in cooperation with primary federal regulators and state agencies, to ensure that all FDIC-insured institutions appropriately manage risk.

Annual Performance Goal 2.1-1
Conduct on-site risk management examinations to assess the overall financial condition, management practices and policies, and compliance with applicable laws and regulations of FDIC-supervised depository institutions.  When problems are identified, promptly implement appropriate corrective programs, and follow up to ensure that identified problems are corrected.

Indicator and Target

  1. Percentage of required examinations conducted in accordance with statutory requirements and FDIC policy
    • Conduct all required risk management examinations within the timeframes prescribed by statute and FDIC policy.
  1.  Implement appropriate corrective program where violations are identified.
    • Implement formal or informal enforcement actions within 60 days for at least 90 percent of all institutions that are newly downgraded to a composite Uniform Financial Institutions Rating of 3, 4, or 5.

Means and Strategies

    Operational Processes (initiatives and strategies):
    Risk management examinations assess the overall financial condition, management practices and policies, and compliance with applicable laws and regulations of FDIC-supervised depository institutions.  The FDIC performs safety and soundness, Bank Secrecy Act, and information technology (IT) reviews at each risk management examination of an FDIC-supervised insured depository institution.  As applicable, the FDIC also conducts reviews of trust, registered transfer agent, municipal securities dealer, and government security dealer activities at these examinations.

    In 2013, the FDIC projects that it will conduct more than 2,559 risk management examinations required under statute, FDIC policy, or agreements with state supervisors.  The FDIC follows a risk-focused approach to examinations, which allows examiners to focus resources on those areas with the greatest potential risk.  The FDIC has several analytical models to identify higher-risk financial institutions by considering factors such as rapid growth, fluctuating earnings, economic downturns, and concentrations in vulnerable industry sectors.
    Examiners use these off-site tools to help them risk-focus during on-site examinations.  These models are also used to identify the need for inquiries or on-site visits to FDIC-supervised institutions outside of the regular examination cycle.

    The FDIC also continues to focus on the risks posed by technology.  On-site examinations review technology-related activities to determine how each FDIC-supervised depository institution manages its IT risks.  The FDIC proactively monitors indicators of technology risk that may affect FDIC-supervised institutions and provides information to the industry about risks associated with technology outsourcing practices (e.g., contracting for computer services).  The FDIC regularly talks with technology vendors, bank trade associations, and standards and rule-setting entities to identify and promote effective risk management practices for emerging technologies.

    The number of risk management examinations conducted during 2013 may fluctuate as the number of FDIC-supervised insured depository institutions changes due to mergers, closings, newly approved charters, and other actions.  In addition, increases in asset size or changes to an institution’s condition or capital levels may accelerate examination cycles and increase the number of required examinations.

    Troubled and problem institutions (those with a composite rating of 3, 4, or 5) are identified primarily through the examination process.  While discussions with banks to correct deficiencies are the primary corrective tools, the FDIC has broad enforcement powers to correct practices, conditions, or violations of law that threaten an institution’s financial condition.  The FDIC may use informal and formal enforcement actions against an institution or responsible individuals to address identified problems.

    The examination report identifies the corrective actions to be taken by the institution.  If deemed necessary, a formal or informal enforcement action is sent to the financial institution with the report of examination.  To ensure that supervisory actions are taken promptly, the FDIC monitors the time it takes to provide examination reports to FDIC-supervised institutions after the completion of an examination.

    A follow-up examination or on-site visit is conducted to review compliance with supervisory actions for each institution that receives a composite Uniform Financial Institutions Rating of 3, 4, or 5 except in rare instances where it is determined by FDIC management to be unnecessary.  Additional follow-up action is taken when the corrective program is determined to have been insufficient in addressing the identified problem.

    The responsible FDIC regional office closely monitors each troubled and problem depository institution.  In addition to an on-site visit and a subsequent examination, progress in complying with an enforcement action is assessed through progress reports from the institution, use of off-site monitoring tools, and direct communication with management of the financial institution.

    Human Resources (staffing and training):
    The FDIC has 1,966 authorized positions (1,469 permanent and 497 non-permanent) in its field examination workforce for risk management in 2013.  Field examiners conduct on-site examinations and visits.  Staffing and training needs are reviewed regularly to ensure that the staff resources supporting the risk management examination program are adequate to conduct a high quality examination program and that employees possess the skills and knowledge to effectively identify existing and emerging risks.

    The FDIC has cooperative agreements with most states to conduct joint or alternating risk management examinations.  If a state supervisor handling an examination has scheduling, staffing, or other resource constraints, the statutory examination requirement may not be met.  In such cases, the FDIC will work with the state supervisor to make sure that any delinquent examination is quickly scheduled and completed.  When appropriate, the FDIC may conduct the examination instead of the state supervisor.

    Case managers and other regional office officials finalize and monitor compliance with enforcement programs.  Staffing and training needs are reviewed regularly to ensure that resources available for this function are adequate and that employees possess the required skills and knowledge.

    Information Technology:
    The FDIC’s Virtual Supervisory Information on the Net system (ViSION) is used to schedule and track the completion of risk management examinations.  The ViSION system is also used to monitor all enforcement activity and other significant events at troubled institutions and to schedule on-site visits and follow-up examinations of 3-, 4-, and 5-rated institutions.

    The FDIC is in the midst of a multi-year project to develop a new Examination Tools Suite (ETS) that will replace four examination-related software applications and address the risk of technological obsolescence.  In 2012, the first phase of ETS was implemented to replace the electronic loan review software that had been in use since 1996.  ETS development will be completed in 2013, with training and field implementation scheduled for the first quarter of 2014.

Verification and Validation
The number and timing of examinations are tracked through ViSION and reported through established management processes.  Enforcement actions and the timing of required on-site visits are tracked through ViSION. 

The FDIC uses its Regional Office Internal Control Review program to make sure that regions effectively monitor the compliance of FDIC-supervised institutions with formal and informal enforcement actions.  This review incorporates various components of the supervisory process, including assessment of the appropriateness of formal and informal corrective actions, and monitoring of enforcement implementation and follow-up activities.  Any material exceptions noted during the reviews are brought to management’s attention for appropriate action.

2012 Performance Results
This annual performance goal has been revised for 2013 to combine 2012 Annual Performance Goals 2.1-1 and 2.1-2.  This better reflects the linkage between examinations and associated enforcement actions.  The 2012 performance target for Annual Performance 3.1-2 has been modified because follow-up examinations and visits are routinely required under FDIC policy when enforcement actions are implemented.  In 2012, the FDIC successfully met this performance target.


Annual Performance Goal 2.1-2
Assist in protecting the infrastructure of the U.S. banking system against terrorist financing, money laundering, and other financial crimes.

Indicator and Target

  1. Percentage of required examinations conducted in accordance with statutory requirements and FDIC policy
    • Conduct all Bank Secrecy Act examinations within the timeframes prescribed by statute and FDIC policy.

Means and Strategies

    Operational Processes (initiatives and strategies):
    The FDIC conducts Bank Secrecy Act/Anti-Money Laundering (BSA/AML) examinations and Office of Foreign Assets Control (OFAC) reviews to assess the BSA/AML and OFAC compliance programs of supervised financial institutions.  These examinations and reviews cover sound risk management, compliance with recordkeeping requirements, and the ability of the institution to identify and report suspicious activity.  BSA/AML examinations and OFAC reviews are performed as a part of all risk management examinations of FDIC-supervised insured depository institutions.  The FDIC also completes BSA exams for states that do not conduct these exams.  The FDIC follows a risk-based approach to BSA/AML examinations and OFAC reviews, which allows examiners to focus resources on those areas with the greatest potential risk.

    Guidance is provided to risk management staff through written memoranda, participation in the FFIEC BSA/AML Examination Workshop, and attendance at the Advanced BSA/AML Specialists Conference.

    Human Resources (staffing and training):
    The FDIC has 332 examiners who are designated as BSA/AML subject matter experts, including 77 with advanced certifications for this discipline. Staffing and training needs are reviewed regularly to ensure that the staff resources supporting the BSA/AML examination program are adequate and that employees possess the skills and knowledge to effectively and successfully assess compliance with BSA/AML requirements and detect any emerging risks.

    Information Technology:
    ViSION is used to track the number and timing of required BSA/AML examinations.  Other risk management and compliance supervisory systems are also used to obtain dates for these examinations.  ETS is also used to provide updated BSA violation codes to examiners automatically, thereby increasing efficiency of those examinations.

Verification and Validation
The number and timing of BSA/AML examinations are tracked in ViSION and reported through established management processes.

2012 Performance Results
This annual performance goal and its associated performance indicator and target are unchanged from 2012.  The FDIC successfully met this performance target in 2012.


Annual Performance Goal 2.1-3
More closely align regulatory capital standards with risk and ensure that capital is maintained at prudential levels.

Indicator and Target

  1. Completion of review of comments and impact analyses of changes to regulatory capital rules
    • Complete by June 30, 2013, the review of comments and impact analysis of June 2012 proposed interagency changes to regulatory capital rules.
  1. Issuance by the federal banking agencies of final regulatory capital rules to implement internationally agreed upon enhancements to regulatory capital standards and remove references to credit ratings consistent with DFA.
    • Issue by December 31, 2013, final regulatory capital rules

Means and Strategies

    Operational Processes (initiatives and strategies):
    To ensure that banks build and maintain capital adequate to withstand a difficult financial environment, the FDIC is continuing to work on a revised regulatory capital framework, in conjunction with the other federal banking agencies, and enhanced off-site monitoring and examination support capabilities.

    The objective of Basel III is to strengthen the capital and liquidity rules for banking organizations with the goal of promoting a more resilient banking industry.  The Basel III enhancements to the capital adequacy framework are designed to improve the banking industry’s ability to absorb the effects of financial or economic stress.  In June 2012, the FDIC adopted a final rule on the Market Risk Amendment.

    This rule, which applies to the trading activities of large and complex banking organizations, strengthens capital requirements for these activities to reflect lessons from the financial crisis.  The remaining revisions to the capital regulations, which are planned for completion in 2013, will address the definition of capital, its required level, and selected changes to the risk-weighting of assets in a way that is responsive to significant comments the agencies received on these proposed rules.

    The revised capital regulations will also establish alternative standards of creditworthiness to replace the use of credit ratings in the risk-based capital rules, consistent with DFA.  Part of the task of replacing credit ratings was accomplished in 2012 with the publication of the final Market Risk Amendment rule, which included alternative standards of creditworthiness for trading activities of large, complex banking organizations.  The revised capital regulations will also include specific provisions reflecting an appropriate scope of application to institutions of different sizes, based on decisions reached through the comment review.

    In addition, the FDIC will continue to promote strong international bank capital standards by participating in meetings and activities of the Financial Stability Board; the Basel Committee and its various groups and subgroups, including the Policy Development Group, the Trading Book Group, the Standards Implementation Group, and the Working Group on Margin Requirements; and other international groups and forums.  Key efforts in 2013 will include participating in Basel’s numerous quantitative impact studies, including those that are designed to monitor the new international liquidity requirements; participating in the Basel Committee’s fundamental review of the trading book and further work on counterparty credit risk; implementing international standards for over-the-counter (OTC) derivative margin requirements; participating in the Basel Committee’s review of the capital requirements for securitization exposures; and developing a regulatory capital charge for systemically important financial institutions.

    Human Resources (staffing and training):
    The breadth and depth of knowledge among FDIC staff on bank capital and capital markets matters has expanded in recent years, partly through their continued participation and active involvement in Basel policy development groups.  In 2012, shortly after the proposed capital rules were approved, the FDIC launched a public outreach effort to explain the proposals, emphasizing those areas affecting community banks.  The FDIC posted training videos and an interagency estimation calculator on its Web site, visited each Regional Office to discuss the proposed rule with community bankers, and hosted a national conference call to address questions on the proposals. While these efforts were targeted to community bankers, the online resources and conference call were available to FDIC staff.  In 2013, the FDIC will continue to increase the number of staff with expertise on bank capital by providing internal and external trainingon the final rules.

    Information Technology:
    The FDIC will use existing technology to accomplish this annual performance goal.

Verification and Validation
Progress in meeting this annual performance goal will be tracked through periodic meetings and established reporting processes.

2012 Performance Results
This annual performance goal is unchanged from 2012.  The performance targets and associated performance indicators have been updated for 2013.  In 2012, the performance target for this goal on publication of a final rule on the Market Risk Amendment was successfully met, although somewhat later than planned; the two remaining performance targets were deferred until 2013 and consolidated into a single performance target.


Annual Performance Goal 2.1-4
Identify and address risks in financial institutions designated as systemically important.

Indicator and Targets

  1. Timely completion of statutory and regulatory requirements under Title I of DFA
    • Complete, in collaboration with the Federal Reserve Board and in accordance with statutory and regulatory timeframes, all required actions associated with the review of Section 165(d) resolution plans submitted under Title I of DFA.

  2. Input from Systemic Resolution Advisory Committee
    • Hold at least one meeting of the Systemic Resolution Advisory Committee to obtain feedback on resolving systemically important financial companies.

Means and Strategies

    Operational Processes (initiatives and strategies):
    Under Title I of the Dodd-Frank Act [section 165(d)], covered companies with nonbank assets over $250 billion were required in 2012 to submit plans for a non-systemic resolution under the bankruptcy code.  At the end of June, the FDIC and the Federal Reserve Board received the first set of plans from these institutions.   Among other things, the resolution plans identified each firm’s critical operations, core business lines, and the key obstacles to a rapid and orderly resolution.  Impediments to resolution included areas such as a firm’s internal organizational structure, interconnections of the firm to other systemic financial companies, and management information system limitations.  The first set of plan filers will submit subsequent plans by October 2013.  The FDIC and the Federal Reserve Board provided these firms enhanced guidance for their revised submissions and will be evaluating the plans for informational completeness and will assess the credibility of the plans.  In addition, covered companies with nonbank assets of $100 billion to $250 billion will submit their first resolution plans by July 2013, and all other covered companies must submit their first resolution plans by December 2013.

    The Systemic Resolution Advisory Committee advises the FDIC on a variety of issues including  the effects on financial stability and economic conditions resulting from the failure of a SIFI, the ways in which specific resolution strategies would affect stakeholders and their customers, the tools available to the FDIC to wind-down the operations of a failed organization, and the tools needed to assist in cross-border relations with foreign regulators and governments when a systemic company has international operations.  Members of the Committee bring a wide range of knowledge and experience to these issues, including expertise in managing complex firms, administering bankruptcies, working within different legal jurisdictions, and understanding the application of accounting rules and practices.  During 2012, the Committee continued to provide important advice to the FDIC regarding systemic resolutions.

    Human Resources (staffing and training):
    The review of Title I, 165(d) resolution plans at the FDIC will be carried out by a multidisciplinary team with expertise across all major operational and business line functions of the covered companies, both domestically and internationally. Training needs are reviewed regularly to ensure that these teams have knowledge and expertise necessary to conduct a high quality review of the Title I resolution plans.

    Information Technology:
    The FDIC uses existing secure technology systems to support the annual submission and management of the resolution plans required under Section 165(d).

Verification
Progress in achieving this annual performance goal will be monitored through established management reporting processes.

2012 Performance Results
This annual performance goal is unchanged from 2012.  The performance targets and one associated performance indicator have been updated for 2013.  In 2012, the FDIC successfully met the performance targets for this goal.


STRATEGIC GOAL 3:
Consumers’ rights are protected and FDIC-supervised institutions invest in their communities.


STRATEGIC OBJECTIVE 3.1
FDIC-supervised institutions comply with consumer protection, CRA, and fair lending laws and do not engage in unfair or deceptive practices.

Annual Performance Goal 3.1-1
Conduct on-site CRA and compliance examinations to assess compliance with applicable laws and regulations by FDIC-supervised depository institutions.  When violations are identified, promptly implement appropriate corrective programs and follow up to ensure that identified problems are corrected.

Indicator and Target

  1. Percentage of examinations conducted in accordance with the timeframes prescribed by FDIC policy
    • Conduct 100 percent of required examinations within the timeframes established by FDIC policy.
  1. Input from Systemic Resolution Advisory Committee
    • Conduct visits and/or follow-up examinations in accordance with established FDIC policies to ensure that the requirements of any required corrective program have been implemented and are effectively addressing identified violations.

Means and Strategies

    Operational Processes (initiatives and strategies):
    The FDIC conducts CRA and compliance examinations of FDIC-supervised depository institutions to determine compliance with consumer protection and fair lending laws and performance under CRA.  The frequency of compliance examinations is specified by FDIC policy.  For CRA examinations, the FDIC’s examination frequency policy conforms to applicable provisions of the Gramm-Leach-Bliley Act (GLBA), which establishes the CRA examination cycle for most small banks.  In 2013, the FDIC estimates that it will conduct 1,700 to 1,800 compliance and/or CRA examinations.

    The FDIC’s compliance examination approach emphasizes an institution’s compliance risk-management practices as opposed to exhaustive transactional testing.  This approach involves an expanded review of an institution’s systems and compliance policies so that transaction testing can be better targeted and focused on the areas of greatest risk exposure.  This approach creates a more efficient and effective use of examination resources, especially in financial institutions with high compliance risk profiles.

    Institutions with compliance deficiencies are identified primarily through the examination process.  While discussions with bank management are usually sufficient to correct these deficiencies, the FDIC has broad enforcement powers to correct practices, conditions, or violations of law that threaten an institution’s compliance with consumer protection and fair lending laws or a consumer’s rights under those laws.  The FDIC may address identified problems through the use of formal or informal enforcement actions against the institution or responsible individuals.

    Institutions that receive unfavorable ratings for compliance with consumer protection and fair lending laws and regulations, and are subject to enforcement actions are closely monitored by regional office officials.  A follow-up examination or on-site visit is conducted to review compliance with supervisory actions for each institution that receives a composite rating of 3, 4, or 5, except in rare instances where FDIC management determines it is unnecessary.  Additional follow-up action is taken when the initial corrective program is determined to have been insufficient in addressing the identified problem.  Progress in complying with an enforcement action is also assessed through quarterly progress reports from, and direct communication with, management of the financial institution.

    Human Resources (staffing and training):
    The FDIC has 522 authorized positions (470 permanent, 52 non-permanent) in its field examination workforce for compliance and consumer protection in 2012.  Staffing and training needs are reviewed regularly to ensure that staff resources supporting the compliance supervision program are adequate to conduct a high quality examination program and that employees possess the skills and knowledge to effectively implement this program.

    Information Technology:
    The System of Uniform Reporting of Compliance and CRA Examinations (SOURCE) is used to schedule and track financial institution compliance examinations, support pre-examination planning, and provide management information.

Verification and Validation
The FDIC will analyze examination-related data collected in SOURCE to determine whether the performance target for this goal is achieved during the reporting period.  Results will be reported through established management processes.

2012 Performance Results
This annual performance goal has been revised for 2013 to combine 2012 Annual Performance Goals 3.1-1 and 3.1-2.  This better reflects the linkage between examinations and associated enforcement actions.  The 2012 performance target for Annual Performance 3.1-2 has been modified because follow-up examinations and visits are routinely required under FDIC policy when enforcement actions are implemented.


STRATEGIC OBJECTIVE 3.2
Consumers have access to easily understood information about their rights and the disclosures due them under consumer protection and fair lending laws.

Annual Performance Goal 3.2-1
Effectively investigate and respond to written consumer complaints and inquiries about FDIC-supervised financial institutions.

Indicator and Target

  1. Timely responses to written consumer complaints and inquiries
    • Respond to 95 percent of written consumer complaints and inquiries within timeframes established by policy, with all complaints and inquiries receiving at least an initial acknowledgement within two weeks.

Means and Strategies

    Operational Processes (initiatives and strategies):
    The FDIC investigates and responds to written complaints regarding consumer protection and fair lending issues, including those received electronically through the Customer Assistance Form on the FDIC’s Web site.  FDIC staff investigates complaints regarding FDIC-supervised institutions and refers complaints regarding institutions with other primary federal regulators to those agencies.  Target response times vary by the type of complaint.  The FDIC also provides consumer protection information to financial institutions and the public.  When performed effectively, these activities help consumers better understand their rights under consumer protection and federal fair lending laws.

    Human Resources (staffing and training):
    The FDIC’s Consumer Response Center in Kansas City responds to consumer complaints and inquiries about consumer protection matters.  Consumer Affairs staff located in the Washington, D.C., office support the Consumer Response Center by providing guidance and assistance with consumer complaints and inquiries that involve new or unusual issues or sensitive matters.

    Information Technology:
    The FDIC uses STARS to capture and report information, including response time, on complaints.  In 2013, a plan to migrate this functionality to the FDIC’s new centralized customer communication and tracking system work will be completed.

Verification and Validation
Progress in meeting this annual performance goal will be monitored through established management reporting processes.  The FDIC closely monitors the timeliness of its acknowledgment letters and responses through STARS.

In addition, surveys are sent to a sample of consumers who have filed written consumer protection and fair lending complaints to assess their satisfaction with the FDIC’s investigations and responses.  Accepted survey research methods are used to ensure the validity and reliability of the survey instrument and results.

2012 Performance Results
This annual performance goal and its associated performance indicator and target are unchanged from 2012.  In 2012, the FDIC successfully met this performance target.


STRATEGIC OBJECTIVE 3.3
The public has fair access to banking services and is treated equitably by FDIC-supervised institutions.

Annual Performance Goal 3.3-1
Promote economic inclusion and access to responsible financial services through supervisory, research, policy, and consumer/community affairs initiatives.

Indicator and Targets

  1. Completion of planned initiatives
    • Conduct the third biennial FDIC National Survey of Unbanked and Underbanked Households (conducted jointly with the U.S. Census Bureau)
    • Initiate work on the Survey of Banks’ Efforts to Serve the Unbanked and Underbanked.
    • Implement the strategy outlined in the work plan approved by the Advisory Committee on Economic Inclusion to support the responsible use of technology to expand banking services to the unbanked.

Means and Strategies

    Operational Processes (initiatives and strategies):
    Approximately 28 percent of U.S. households are underserved by the banking industry.  This includes both “unbanked” households (those with no checking or savings accounts) and “underbanked” households (those with checking or savings accounts who still rely on nonbank alternative financial services and providers, such as money orders, check cashing services, payday loans, rent-to-own agreements, pawn shops, or refund anticipation loans). 

    The FDIC’s Advisory Committee on Economic Inclusion supports research, demonstrations, and pilot projects and promotes sound supervisory and public policies to improve the “appropriate engagement” of underserved households with mainstream financial institutions.
    Appropriate engagement means that households are using financial products and services that are affordable, easy to understand, and not subject to unfair or unforeseen fees.

    During 2013, the FDIC will conduct the third biennial FDIC National Survey of Unbanked and Underbanked Households (jointly with the U.S. Census Bureau).  Survey data will be analyzed and the final study published in 2014.  The FDIC will also initiate work on the Survey of Banks’ Efforts to Serve the Unbanked and Underbanked.  A target publication date for this study has not yet been determined because FDIC is considering merging this study with other research on community banking.  Ultimately, the FDIC will provide an important set of references that help assess progress and remaining challenges for economic inclusion.  In addition, the FDIC will be better positioned to identify strategies that promote economic inclusion by studying opportunities to expand access to mainstream financial services, identifying the role that community banks play in meeting community needs, and increasing awareness of communities that are currently underserved or at risk of becoming underserved.

    The Advisory Committee’s work will continue to focus on expanding services to the underbanked and will specifically look into the potential role of technology, including mobile banking, to expand services to this population.  The Advisory Committee may recommend to the FDIC specific measures of improvement, many of which may represent national objectives that require the participation and cooperation of multiple stakeholders, including other federal agencies; federal, state, and local policy makers; the financial services industry; nonprofit and philanthropic groups; and consumer groups.

    During 2013, FDIC working groups will continue to conduct research and develop policy proposals related to expanding access to mainstream banking services for underserved consumers.  The FDIC may present these proposals to the Advisory Committee for advice and recommendations.

    Human Resources (staffing and training):
    This annual performance goal will be carried out largely by existing staff in the FDIC’s consumer research and consumer affairs functions.  The activities of the Advisory Committee are supported by staff in several FDIC divisions. Employees in those divisions provide staff support for the Advisory Committee, as needed, including support for its research and demonstration activities.

    Information Technology:
    Existing technology will be used to accomplish this goal.  The FDIC broadcasts the Advisory Committee’s public meetings on its Web site.

Verification and Validation
Progress in completing the initiatives planned for this annual performance goal will be monitored through periodic reporting by working groups through established management reporting processes.

2012 Program Results
This annual performance goal and its associated performance indicators and targets have been modified slightly for 2013 to reflect the biennial cycles for the National Survey of Unbanked and Underbanked Households and the Survey of Banks’ Efforts to serve the unbanked and underbanked.  The other initiatives identified as performance targets in 2013 have been revised to focus on the responsible use of technology and mobile banking.  The FDIC successfully met the performance targets for this goal in 2012.

 



Last Updated 07/30/2013 Finance@fdic.gov