| 5/11/2023 | EM 1.3 FIRS | We made miscellaneous technical and grammatical updates in addition to the following changes in the qualitative factor criteria and statistics: - Overview – Revised allowance for loan loss references to be allowance for credit losses.
- Assets – Revised allowance for loan loss references to be allowance for credit losses and also added a new statistic for allowance for credit losses on debt securities. Specified the qualitative factor for Allowance for Losses qualitative factor is focused on loans and added comments to address allowance for credit losses on debt securities in the Investments qualitative factor.
- Management – Added rating criteria around internal controls over financial reporting to the Financial & Shareholder Reporting qualitative factor.
- Earnings – Revised provision for loan loss references to be provision for credit losses on loans and also added a new statistic for provision for credit losses on debt securities.
- Liquidity – Added rating criteria around the banks statutory collateral margin to the Liquidity Risk qualitative factor.
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| 1/27/2023 | EM-21.2 Allowance for Losses | Updated the guidance to address the new CECL requirements that were effective as of January 1, 2023. Specifically: - Changed the procedure name for Policy, Procedures, Methodologies, & Controls. (It was previously named Policy, Procedures, & Controls.)
- The Allowance Level and Policy, Procedures, Methodologies, & Controls procedures were rewritten to address the new CECL requirements.
- The Audit and Transaction Testing procedures included minor revisions to address the new CECL requirements.
- Made other miscellaneous technical and grammatical updates.
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| 1/27/2023 | EM- 21.3 Investments | Updated the guidance to address the new CECL requirements that were effective as of January 1, 2023. Specifically: - Changed the procedure name for Financial Impact. (It was previously named Accounting.)
- Moved the examination of financial impact to the Financial Impact procedure from the Portfolio Characteristics & Trends procedure.
- Updated the various procedures under the Investments topic to address the new CECL requirements. The majority of the revisions were in the Financial Impact procedure to address ACL processes, ACL zero-loss, ACL at acquisition, and ACL level.
- Made other miscellaneous technical and grammatical updates.
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| 1/13/2023 | EM- 31.1 Corporate Governance | We made the following various updates to the Corporate Governance Examination Manual topic: Standards of Conduct (SOC) - Changed the procedure name SOC Policy and Procedures to SOC Program.
- Updated the guidance in the SOC Program procedure to reflect the new SOC regulations that became effective on January 1, 2023.
- Removed procedures SOC Internal Controls and SOC Disclosure Statements. The updated guidance for these areas is now incorporated in the SOC Program procedure.
- Removed Workpaper WP 31.1-13 SOC Policies and Procedures.
Other Updates - Published a new Board Committees procedure.
- Updated outdated hyperlinks in the Enterprise Risk Management procedure.
- Revised reference to the Board Policies and Charters Workpaper as this is now a supplemental document in the Policy Administration procedure. (Removed WP 003 Board Policies and Charters as this new supplemental document replaced the workpaper.)
- Added considerations for additional policy direction in the Internal Control Policy procedure.
- Added reference to specific SOC audit expectations and transaction testing for insider loans and criminal referrals in the Audit procedure.
- Removed reference to FCA Regulation 612.2155 in the Transaction Testing procedure.
- Made miscellaneous other technical and grammatical updates.
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| 11/22/2022 | EM-31.7 Information Technology & Security | Published new guidance for the Information Technology & Security topic. |
| 11/17/2022 | EM- 31.3 Audit & Review Programs | Made revisions to the guidance to encourage examiners to weigh the costs versus the benefits of applying the International Standards for the Professional Practice of Internal Auditing at certain low-risk institutions. Provided additional clarifications in our expectations regarding audit coordinators and external assessments. Made miscellaneous other technical and grammatical updates. |
| 9/1/2022 | EM- 61.3 Derivatives | Published new guidance for the Derivatives topic. |
| 4/1/2022 | EM- 1.3 Financial Institution Rating System | We made miscellaneous technical and grammatical updates in addition to the following changes in the qualitative factor criteria: - Capital Management – Added reference to assessing capital needs and additional criteria under the weak rating regarding insufficient management processes.
- Allowance for Losses – Added criteria regarding allowance levels.
- Risk Identification – Added criteria for risk rating processes.
- Credit Administration – Added criteria for credit analysis and internal controls.
- Loan Underwriting Direction – Removed criteria for credit analysis, compensation programs, and delegated lending authorities.
- Corporate Governance – Removed reference to the IT governance framework and added criteria for the following areas:
- Board reporting processes
- Corrective action processes
- Internal control policy
- Board committees
- Policy administration
- Enterprise, third-party, and model risk management and IT governance programs
- Audit and Review Programs – Removed reference to the internal control policy and added criteria for the following areas:
- Audit plan
- Audit policies and procedures
- Internal audit structure and staffing
- Audit reports and effectiveness/reliability of audits
- Resolution of audit findings
- Information Technology & Security – Removed reference to the vendor management program and added criteria for the following areas:
- IT governance framework
- IT security controls
- IT operational controls
- Cybersecurity threats and vulnerabilities
- Financial & Shareholder Reporting – Added additional criteria regarding compliance with regulations.
- Liquidity Risk – Added criteria for the high risk rating for associations regarding funding penalties or risk-based premiums.
- Interest Rate Risk – Rewrote the criteria for this factor. Removed the differentiation for banks and associations.
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| 3/21/2022 | EM- 21.1 Portfolio Quality & Composition | Rewrote the Direct Loans (banks only) procedure guidance into an evaluative question format. Additionally, reorganized some content into other procedures in the examination manual for consistency in examination approach as reflected in the 3/21/2022 Credit Administration and Risk Identification topic revisions. |
| 3/21/2022 | EM- 22.2 Risk Identification | Added an evaluative question regarding direct loans (banks only) to the Uniform Classification System procedure; added additional guidance to the High-Risk Asset Accounting procedure regarding management and disposal of OPO; added considerations for selecting a loan sample and evaluating testing results for direct loan transaction testing in the Transaction Testing procedure; and made miscellaneous other technical and grammatical updates to the topic.
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| 3/21/2022 | EM- 22.3 Credit Administration | Published new guidance for the Regulatory Compliance and Administration of Lending Programs procedure groups. Made updates to the General Credit Controls group: added a reference to the High-Risk Asset Accounting guidance in the topic Overview; added guidance for FCA Regulation 614.4200(c) and removed evaluative questions regarding Eligibility and Authorities, Due Diligence, and Other Property Owned (OPO) in the Credit Administration Guidance & Standards procedure; added a reference to the Institute of Internal Auditors Three Lines Model and added additional guidance around disbursement and payment controls as well as management review and supervision in the Internal Controls procedure; revised the Audit/Review procedure guidance to provide additional detail and examples and incorporate references to professional standards; reorganized the Transaction Testing procedure guidance and added a list of areas considered for examination of credit administration transaction testing and added considerations for selecting a loan sample for direct loan transaction testing; removed an evaluative question on adherence to lending guidance and added additional guidance on direct loan monitoring in the Direct Loan & OFI Administration (banks only) procedure; and made miscellaneous other technical and grammatical updates to the procedure group.
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| 3/14/2022 | EM- 11.2 Capital Mangement | Made revisions to the guidance to address the Tier 1/Tier 2 Regulatory Capital Framework final rule that became effective on January 1, 2022. Specifically, changed the regulation references to 628.21 from 615.5200 where needed. Included revisions to address BL-074. Made miscellaneous other technical and grammatical updates. |
| 3/14/2022 | WP 11.2-3 Capital Distributions | Made revisions to the guidance to address the Tier 1/Tier 2 Regulatory Capital Framework final rule that became effective on January 1, 2022. Specifically, revised guidance in questions 1b &1c to address the requirements in the final rule. Made miscellaneous other technical and grammatical updates. |
| 3/14/2022 | WP 11.2-5 Capital Regulatory Compliance | Made revisions to the guidance to address the Tier 1/Tier 2 Regulatory Capital Framework final rule that became effective on January 1, 2022. Specifically, revised guidance in various questions to provide additional clarification on nuances in the final rule including guidance around preferred stock. Made miscellaneous other technical and grammatical updates. |
| 3/14/2022 | EM 31.2 Business Strategy and Planning | Made revisions to the guidance to address the Tier 1/Tier 2 Regulatory Capital Framework final rule that became effective on January 1, 2022. Specifically, added regulatory citations to the new regulations. Also, updated various references and associated guidance to address the updated Director’s Role. Made miscellaneous other technical and grammatical updates. |
| 3/14/2022 | WP 31.2-4 Business Planning Regulatory Compliance | Made revisions to the guidance to address the Tier 1/Tier 2 Regulatory Capital Framework final rule that became effective on January 1, 2022. Specifically, added regulations and additional clarification to question 22 in the capital plan section to address requirements of the final rule. Made miscellaneous other technical and grammatical updates. |
| 2/17/2022 | EM-33.3 Financial & Shareholder Reporting | Incorporated guidance for examiners to evaluate Internal Controls Over Financial Reporting (ICFR) programs in the Financial Reporting Controls procedure. Added references to FCA’s Bookletter BL-074 to the Annual Report procedure. Added references to FCA’s Informational Memorandum on Maintaining and Using Stockholder Lists dated February 4, 2021 to the Annual Report and AMIS procedures. Made miscellaneous other technical and grammatical updates.
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| 2/17/2022 | WP 33.3-1 Annual Report to Shareholders | Revised the workpaper to include requirements from FCA's Bookletter BL-074. Made miscellaneous other technical and grammatical updates. |
| 9/24/2021 | EM-31.1 Corporate Governance | Published new guidance for the Third-Party Risk Management, Bylaw Administration, Policy Administration, and Board Reporting Processes procedures. Note the procedure name changes for what used to be Bylaw Changes and Reporting. Revised the Corrective Action Processes procedure to more clearly address roles and responsibilities for tracking, verifying, and reporting corrective actions. Also, added a separate evaluative question on internal audit for corrective action processes. Revised the Whistleblower procedure to add a reference to the Third-Party Risk Management procedure when evaluating outsourcing processes for service providers. Removed the Required Policies procedure. Required policies are examined in the applicable procedures throughout the Examination Manual. Made other miscellaneous technical and grammatical updates.
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| 8/17/2021 | EM-1.4 Supervision and Enforcement | Added language to address the 2018 Farm Bill provisions, where FCA may initiate a Cease and Desist Order action or Civil Money Penalty (CMP) against former institution-affiliated parties up to 6 years after ceasing involvement with the institution; added language to address FCA Board approval of enforcement actions; modified the CMP section to remove outdated CMP amounts and instead refer to the regulations for the current inflation adjusted amount; replaced the Levels of Supervision graphic with an updated version; and made miscellaneous other technical and grammatical updates.
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| 8/9/2021 | EM-22.2 Risk Identification | Revised the Risk Ratings procedure to address risk rating models. Revised the Audit procedure guidance to provide additional detail and examples and incorporate references to professional standards. Revised, the Transaction Testing procedure to update guidance for selecting the loan sample. |
| 8/9/2021 | High-Risk Asset Accounting and Reporting | Revised document to reflect changes stemming from to the 2020 nonaccrual rule change |
| 7/28/2021 | WP 31.3-1 Audit Committee | Revised the workpaper to update the page numbers referenced to the new Director’s Role. Made other technical/grammatical updates. |
| 7/28/2021 | WP 31.4-8 Compensation Committee | Revised the workpaper to update the page numbers referenced to the new Director’s Role. Made other technical/grammatical updates. |
| 5/18/2021 | EM-41.1 Earnings Adequacy | Added a new bullet on gains/losses on derivatives in the Quantity & Quality procedure and made other technical/grammatical updates, including renaming and shortening some of the evaluative question bullets. |
| 5/18/2021 | EM-41.2 Earnings Management | Revised the guidance on models and model risk management in the Pricing Model and FTP Model procedures. Revised the Audit procedure guidance to provide additional detail and examples and incorporate references to professional standards. Added bullets about testing internal audit/review reliability and accuracy of board and management reports on loan pricing and structuring in the Transaction Testing procedure. Made other technical/grammatical updates. |
| 5/18/2021 | EM-21.2 Allowance for Losses | Added a note in the Overview about CECL. Revised the guidance on models and model risk management in the Allowance Level procedure. Added a reference and link to our High-Risk Asset Accounting and Reporting guidance in the Allowance Level procedure. Revised the Audit procedure guidance to provide additional detail and examples and incorporate references to professional standards. Added a bullet about testing internal audit/review reliability in the Transaction Testing procedure. Made other technical/grammatical updates. |
| 4/29/2021 | EM-31.1 Corporate Governance | Published new guidance for the Enterprise Risk Management, Cooperative Principles, Corrective Action Processes, and Internal Control Policy procedures. Revised the Audit procedure guidance to incorporate new sub-bullets in the Scope and Depth evaluative question. Added a reference in the SOC Policy & Procedures procedure guidance to FCA’s workpaper on this subject. Made significant revisions to the Criminal Referral procedure guidance to reference FCA Bookletter BL-073 and ensure consistency with the guidance communicated in the Bookletter. Made other technical/grammatical updates. |
| 4/5/2021 | WP 003 Board Policies & Charters Workpaper | Updated the rows on Lending Policies and Underwriting Standards and PCA Loan Terms as a result of the Amortization Limits final rule. |
| 4/5/2021 | EM-22.5 Loan Underwriting Direction | Updated the Overview to add a sentence on flexibility for special programs and situations (with a reference to FCA Board Policy Statement 71) and a new paragraph to make a connection to the Credit Administration topic; updated the Adequacy of Standards procedure to add sub-bullets addressing 614.4150 requirements and the new 614.4200(c) requirement (from the Amortization Limits final rule); removed the delegated lending authorities evaluative question and guidance from the Other Direction & Practices procedure as it is now addressed in the Credit Administration topic; removed the Loan Structure, Terms, & Conditions procedure and guidance as this is now addressed in the Credit Administration topic; and made other technical/grammatical updates. |
