On June 21, the Federal Deposit Insurance Corporation (FDIC) issued its summer installment of its Supervisory Insights newsletter, a publication prepared by the agency’s Division of Supervision and Consumer Protection that is intended to be a “forum for discussing how bank regulation and policy are put into practice in the field, sharing best practices, and communicating about the emerging issues that bank supervisors face.” Articles in the current installment include the following:
- Third-Party Arrangements: Elevating Risk Awareness. This article describes the experiences some FDIC examiners have had with respect to their examination of third-party relationships. As noted by the authors, although these relationships can assist institutions in attaining strategic objectives, “failure to manage these risks can expose a financial institution to everything from financial loss to regulatory action and loss of customer relationships.” Specific case studies are discussed.
- Staying Alert to Mortgage Fraud. This article discusses recent mortgage fraud activity, including the proliferation of nontraditional mortgage loan products in recent years.
- Wind Hazard Insurance. This article addresses “potentially widespread issues regarding insurance availability and affordability” and the resulting significant consequences. In particular, this article focuses on Florida and the impact of the state’s climate on its residents’ ability to procure wind hazard insurance.
Regular features found in the newsletter are also included.