The Lighter Side: Watch Out for These Red Flags
Ever wonder what your regulator really thinks about your bank?
As many of you know, November 2008 is the deadline to be in compliance with the new identity theft red flags as required by the FACT (Fair And Accurate Credit Transactions) Act. Since many of us are in this mode of identifying red flags, I thought it might be fun to identify some humorous indicators cautioning you that your regulator has a major problem with the performance of your bank. Below, I have listed 16 "red flag" indicators. I call it my Top 10 List (even though there are 16).
How can you know that your regulator has concerns about your bank?
(Drum roll please.)
1. When the upcoming examination materials request list includes
- A list of all locksmiths in your area.
- A list of all employees interested in working for a government agency.
- Names, addresses, account numbers, and balances of all deposit and trust accounts greater than $100,000.
- A list of all banks in your area seeking growth opportunities.- A list of existing or potential shareholders with "money to burn."
2. When the examination team shows up at your bank and is accompanied by a local priest (for the purposes of administering last rites.)
3. When your examiner to employee ratio is greater than your loan to deposit ratio.
4. When you EIC places a picture of his wife and kids at his work station.
5. When the examination team not only recommends the development of a management succession plan, but requires its adoption before commencement of the field work.
6. When your examiner makes a Freudian slip by referring to your MOU as a Memo of Undertaker.
7. When a routine phone message to your regulator's office is returned by his/her legal department... on a recorded line!
8. When, in the tradition of a last meal, our examiner finally agrees to go to lunch with you (and even lets you pick your favorite place - going Dutch, of course).
9. When you actually see an examiner working in your bank ON A FRIDAY!
10. When Ben Bernanke (FRB). Sheila Bair (FDIC) , and/or John Dugan (OCC) show up for your exit meeting because they just happened to "be in the neighborhood."
11. When asking for our CAMEL rating, you are handed an envelope labeled, "DO NOT OPEN TIL WE'RE GONE."
12. When your EIC begins the exit meeting with :...Humpty Dumpty sat on a wall..."
13. When your ROE (Report of Examination) beings with "Once upon a time..." but does NOT end with ..."happily ever after."
14. When among all those acronyms in your ROE - CAMEL, ALLL, ROAA, BSA, AML, FACT, DTR, IRR, CIP, EFT, HMDA, EOA, FDPA, TIL - you find yet a new one - RIP.
15. When the check for your current assessment fee is returned with the reason,"account no longer active."
16. When this takes up the entire first page of your ROE...
