On March 22, the Federal Financial Institutions Examination Council (FFIEC) issued an update on the status of its Examination Modernization Project. According to FDIC FIL-11-2018 and the accompanying press release, the project’s objective is to identify and assess measures to improve the community bank safety and soundness examination process, pursuant to the Economic Growth and Regulatory Paperwork Reduction Act’s review of regulations. According to feedback from selected supervised institutions and examiners, agencies should ensure examiners understand the importance of clear, transparent communication objectives during the examination process. As a result, the FFIEC indicated the following four areas with the potential for “meaningful supervisory burden reduction”:

  • regulator communication objectives should be highlighted and reinforced before, during, and after examinations;
  • technology should be leveraged to “shift, as appropriate, examination work from onsite to offsite”;
  • examinations should continue to be tailored “based on risk”; and
  • electronic file transfer systems should be improved “to facilitate the secure exchange of information between institutions and supervisory offices or examiners.”

The FFIEC also announced plans to take further action on other areas of improvement.