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2010 Annual Report

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III. Performance Results Summary

Summary of 2010 Performance Results by Program

The FDIC successfully achieved 30 of the 34 annual performance targets established in its 2010 Annual Performance Plan. Three targets were deferred due to specific legislation in the Dodd-Frank Act. One target will be met in 2011. There were no instances in which 2010 performance had a material adverse effect on the successful achievement of the FDIC’s mission or its strategic goals and objectives regarding its major program responsibilities.

Additional key accomplishments are noted below.

Insurance

Performance Results

  • Presented updated deposit insurance fund projections to the FDIC Board twice, in June and October 2010. No changes were recommended for assessment rates in June. In October, based on updated projections and changes to the Restoration Plan target required by the Dodd-Frank Act, staff recommended that the Board forgo the three basis point increase that was scheduled to take effect on January 1, 2011.
  • In October, based on updated projections, staff estimated that the reserve ratio will become positive by year-end 2011 and will reach 1.15 percent by the fourth quarter of 2018. The FDIC intends to pursue rulemaking next year to implement the Dodd-Frank Act requirement that the FDIC offset the effect of requiring the reserve ratio reach 1.35 percent by September 30, 2020 rather than 1.15 percent by year-end 2016 on smaller banks.
  • Completed reviews of the recent accuracy of the contingent loss reserves.
  • Researched and analyzed emerging risks and trends in the banking sector, financial markets, and the overall economy to identify issues affecting the banking industry and the deposit insurance fund.
  • Supported supervision activities related to fair lending, enforcement actions, and the unbanked and underbanked survey, and supported efforts of the Advisory Committee on Economic Inclusion (ComE-In).
  • Began a comprehensive study of the trends and events that contributed to the recent financial crisis.
  • Provided senior/executive management policy research and analysis in support of legislative efforts to reform financial industry regulation, as well as support for testimonies and speeches.
  • Published economic and banking information and analyses, through the FDIC Quarterly, FDIC Quarterly Banking Profile (QBP), FDIC State Profiles, and the Center for Financial Research Working Papers.
  • Conducted over 40 outreach events for bankers and community groups to discuss risks affecting the financial services industry.
  • Answered 99 percent of written inquiries from consumers and bankers about FDIC deposit insurance coverage within 14 days.
  • Electronic Deposit Insurance Estimator (EDIE) user sessions for 2010 totaled 442,557.
  • Expanded avenues for publicizing deposit insurance rules and resources by:
    • Enhancing EDIE to (1) incorporate new functionality that allows users to calculate coverage for irrevocable trust accounts and government accounts and (2) provide each FDIC-insured bank the opportunity to integrate the EDIE application into the bank’s website.
    • Producing an updated version of the FDIC Overview Video on Deposit Insurance Coverage for consumers and new bank employees.
    • Updating the FDIC’s consumer and banker brochures on deposit insurance coverage.
  • These resources are available on the FDIC’s website with the video also available on the FDIC’s YouTube channel and downloadable for multimedia applications.
  • Developed computer-based training for all FDIC examiners on FDIC deposit insurance coverage. The training provides an opportunity for all examiners to strengthen and enhance their knowledge of deposit insurance and the risks associated with insured institutions engaging in deposit placement activities.

Supervision and Consumer Protection

  • Conducted 2,813 Bank Secrecy Act examinations, including required follow-up examinations and visitations.
  • Conducted 2,121 IT examinations of financial institutions and technology service providers.
  • Worked with other federal banking regulators and the Basel Committee on Banking Supervision to develop proposals to strengthen capital and liquidity requirements.
  • Published Final Rulemaking for the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 and posted the final guidance to the FDIC website to implement provisions applicable to mortgage loan originators employed by insured depositories.
  • Published the Supervisory Insights journal to contribute to and promote sound principles and best practices for bank supervision.
  • Among other releases, issued Financial Institution Letters (FILs) providing guidance on (1) meeting the needs of creditworthy small business borrowers; (2) identifying, monitoring, and managing correspondent concentration risks; (3) prudent appraisal and evaluation programs; (4) incentive compensation practices; (5) golden parachute payments; (6) deposit collection and placement activities in FDIC-supervised institutions; and (7) registering as a municipal advisor under the Securities and Exchange Commission’s new rule. In addition, 23 disaster relief FILs were issued.
  • Issued industry notification of two interagency releases regarding conducting cross-border funds transfers and examination procedures for compliance with the Unlawful Internet Gambling Enforcement Act.
  • Issued joint final Community Reinvestment Act (CRA) rule change corresponding to statutory requirements relating to student loans and activities in cooperation with minority- and women-owned financial institutions and low-income credit unions. In addition, issued final CRA rule that revised the definition of “community development” in the CRA regulations, to provide favorable CRA consideration for loans, investments, and services by financial institutions that directly support, enable or facilitate eligible projects and activities in designated target areas of the Neighborhood Stabilization Program (NSP) that are approved by the Department of Housing and Urban Development (HUD).
  • Announced annual adjustment to the asset size thresholds used to define small bank, small savings associations, intermediate small bank and intermediate small savings associations under the CRA regulations.
  • Updated interagency guidance on the CRA. Jointly issued, with other Federal Financial Institutions Examination Council member agencies, supervisory guidance on reverse mortgage products.
  • Issued final supervisory guidance on overdraft payment programs, which reaffirms existing supervisory expectations and provides specific guidance with respect to automated overdraft payment programs.
  • Issued guidance to assist lenders in meeting their compliance obligations under the National Flood Insurance Program (NFIP) during periods when the statutory authority of the Federal Emergency Management Agency (FEMA) to issue flood insurance contracts under the NFIP lapses; released compliance guide for state non-member banks wishing to use the model privacy form to comply with disclosure requirements under the Gramm-Leach-Bliley Act; issued financial institutions notice on FEMA announcement that Preferred Risk Policy eligibility will be extended two years beginning January 1, 2011.
  • Issued examination procedures corresponding to amendments to Regulation CC (Expedited Funds Availability); Regulation Z (Truth in Lending) under the Credit Card Accountability Responsibility and Disclosure Act of 2009, the Higher Education Opportunity Act of 2008, and the Helping Families Save Their Homes Act of 2009; Regulation DD (Truth in Savings); Regulation E (Electronic Fund Transfers); the Fair Credit Reporting Act (FCRA) Furnisher Rule; and the FCRA Risk-Based Pricing Rule.
  • Issued examination procedures for identifying Unfair or Deceptive Acts or Practices that are violations of Section 5 of the Federal Trade Commission Act as well as for reviewing third-party relationships and identifying associated risks.

Receivership Management

  • Adopted a final rule requiring the largest IDIs to adopt mechanisms that would, in the event of the institution’s failure, (1) provide the FDIC with standard deposit account and other customer information and (2) allow the placement and release of holds on liability accounts, including deposits.
  • Identified and implemented program improvements to ensure efficient and effective management of the contract resources used to perform receivership management functions. Implemented enhanced reporting capabilities from the Automated Procurement System.
  • Optimized the effectiveness of oversight managers and technical monitors by restructuring work assignments, providing enhanced technical support, and improving supervision.
  • Terminated at least 75 percent of new receiverships that are not subject to loss-share agreements, structured sales, or other legal impediments within three years of the date of failure.
  • Made final decisions for 82 percent of all investigated claim areas that were within 18 months of the institution’s failure date.

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