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Compliance Laws and Regulations > Consultation Policy > Flashcards

Consultation Policy Flashcards

1
Q

What are the four categories of consultations?

A

Informal Consultation
Formal Consultation
Enforcement Consultation
and 10(c) Investigations

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2
Q

What is the purpose of an informal consultation?

A

Obtain a “second opinion” on if a matter rises to the level of supervisory concern or request assistance from Exam Analytics.

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3
Q

In what instances would you seek an informal consultation? (4)

A
  • seek WO input on if matter requires a formal consultation
  • issue is new to the Region or has a new fact pattern where RO seeks perspective from WO
  • Exam Analytics needed
  • Any other topic where RO needs guidance or direction
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4
Q

What types of Exam Analytics may be needed in an informal consultation? (5)

A
  • Raw disparity analysis
  • Statistical Analysis, Prepare for criteria interview, develop data collection spreadsheet, interpret research findings
  • REMA Analysis for redlining risk
  • identify appropriate analytic methods
  • assist in calculating restitution
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5
Q

What must be included when the RO submits a consultation?

A

A recommendation on the proposed outcome for WO concurrence.

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6
Q

What must the EIC or RO complete for a consultation?

A

The consultation template, or for FL consultations the FLSC.

Sufficient information should be included in SOURCE related to the request.

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7
Q

True or False: If a legal opinion is necessary a formal consultation should be initiated.

A

True.

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8
Q

True or false: Informal consultations for exam analytics involving multiple data/statistical requests can be opened as a single consultation.

A

False: Each data/statistical request should be opened as a separate consultation unless the matter involves a fair lending visitation.

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9
Q

When should informal consultations be closed regarding regression and redlining analysis?

A

after analysis is completed and once the RO decides if a 15-day letter is necessary.

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10
Q

When should informal consultations be closed regarding disparity analysis?

A

After the RO and the exam analyst confer on the decision to move forward or no longer pursue the matter. The decision should be documented in SOURCE.

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11
Q

When can a concern be raised regarding the proposed outcome of an informal consultation?

A

Within three business days of notice of a proposed outcome.

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12
Q

True or False: The RO can pursue a different outcome than that set forth in SOURCE by the WO?

A

True - The RO must obtain prior approval of such an action from the Senior Deputy Director.

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13
Q

What is the general timing for an informal consultation?

A

Usually a couple of weeks, but rarely longer than 30 calendar days. the RO will notify if any consultations are open longer than 21 calendar days.

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14
Q

What is the purpose of a Formal Consultation?

A

Seek support from the WO on matters that are typically complex, significant, or sensitive to the agency or industry.

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15
Q

Name 5 situations when a formal consultation is necessary?

A
  • Issue requires consideration by the FDIC Board or Division Director. (matters that change Corp Policy, could attract attention, issues of first impression)
  • involve citing a violation that will likely result in enforcement action requiring approval from Case Review Committee (Orders for restitution, orders for CMPs besides flood, Consent Orders)
  • violations with likely restitution of $1MM or more
  • where the RO does not have authority to act on applications (de novo apps requiring Board approval, Covered filings)
  • involve non-routine UDAP
  • involve entity that received approval from the CFPB in connection with innovative policies (Granted no-action letter, CAST template)
  • violation requiring significant change to bank business strategy
  • FL focal point is complex and requires visitation
  • Potential agency DOJ HUD FL referral (FL-FDL anticipated)
  • determine if org qualifies as a mutual aid society
  • decisions on apps where CRA protest was received
  • involve request to disclose information maintained by FDIC
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16
Q

What are examples of situations where an issue may require consideration by the Board of Directors of FDIC?

A
  • There is no previous legal opinion to address issue
  • RO is applying regulation in different manner than FDIC has done previously
  • FDIC setting precedent by citing or not citing an issue
  • Involves an innovative or complex product, service, technology, or business practice that has industry wide implications.
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17
Q

For formal consultations requiring legal, who should the RO consult prior to initiating a formal consult with WO?

A

The Regional Counsel

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18
Q

What are examples of significant changes to a bank’s business strategy as a result of a violation? (4)

A
  • Stop offering product/service as result of violation
  • Bank significantly changes how product/service is offered BC of violation
  • changes result in significant income/expense changes to bank
  • bank would need new or different knowledge, skills, or abilities to implement new strategy or achieve goals.
19
Q

In what situations must a legal opinion be obtained? (3)

A
  • Issues that could establish or change policy, attract attention or publicity, involve interpretation of law, is an issue of “first impression”
  • Citing a violation that will result in enforcement action requiring approval from CRC or DCP director
  • determination of a pattern and practice in FL violation that would require referral to DOJ or HUD.
20
Q

In what situations might there be a legal written concurrence?

A
  • existing legal option available that WO concurs with findings and applicability to current consultation
  • Bank does not contest violation/agrees to take corrective action
  • consultation involves referral and WO concurs that DCP is legally authorized to make the referral.
21
Q

True or false: A legal opinion is not required to send a FL-FDL.

A

True: not required, but DCP may choose to request one.

22
Q

What is the timing of a formal consultation?

A

Formal consultations will usually conclude within 30-60 calendar days; rarely longer than 90 calendar days. The WO Specialist will notify WO management of any consultation opened more than 45 calendar days.

23
Q

What type of consultation is issued for a Fair Lending Visitation?

A

A formal consultation once the criteria interview has been scheduled.

The consultation should include the Chief of Exam Analytics and the Associate Director.

24
Q

Who typically leads a FL visitation consultation?

A

The FLEX or Exam Specialist

25
Q

What is the timing for a Fair Lending Visitation?

A

Not subject to timing requirements; however matters should be solved ASAP.

26
Q

When is an informal enforcement consultation required?

A

When CMP recommended by matrix differs from amount RO intends to pursue and the RO does not intend to initiate a formal EA consultation.

27
Q

Who initiates an informal enforcement consultation?

A

RO with the Associate Director.

28
Q

What is the timing of an informal enforcement consultation?

A

Conclude within 10-14 calendar days. WO specialist will notify if consultation is open more than 10 days.

29
Q

When is a formal enforcement consultation required?

A

Situations were FDIC intends to pursue any formal EA, unless otherwise delegated to the regions (Consent Order to address CMS weaknesses only)

Or when Order issued by WO but RO wishes to terminate the order.

30
Q

What is the purpose of a formal enforcement consultation?

A

Obtain approval to take formal EA. Many cases require consideration from CRC or Division Director.

31
Q

What types of Formal EAs require a formal consultation? (5)

A 
Restitution orders
Removal/prohibition actions
Cease & Desist actions against individuals
CMPs (except flood)
FL referrals to DOJ or HUD
32
Q

True or false: all formal enforcement consultations must be presented to the CRC or Division Director.

A

False:
-DCP can make exam-level determinations if banks have engaged in pattern or practice violation of ECOA/FHA w/o presenting matters to the full CRC. Provided such matters have been reviewed by general counsel and Deputy to the Chairman.

-DCP pursues stipulated order, CMP, Restitution, Cease & desist, on routine cases that are within authority to not be presented to the full CRC.

33
Q

When must a formal enforcement consultation be summited for a FL referral?

A

Within 2 business days after region receives bank’s response to the FL-FDL.

34
Q

When must a formal enforcement consultation be submitted for a non-fair lending referral?

A

Within one week of receiving response to a FDL.

35
Q

True or False: When submitting a Formal EA consultation a contingency recommendation should be included?

A

True: DCP should be well prepared should an institution not stipulate to an enforcement action (ex: proposing a 10(c) investigation if settlement negotiations are not successful.) A contingency plan should be formed through the consultation.

36
Q

What is the WO and RO legal required to include in the draft for the CRC memo in formal EA consults? (3)

A
  • Legal basis for DCP recommended action
  • Merits of any legal defenses asserted by the bank
  • Applicable statues of limitations
37
Q

What are the timing requirements for Formal EA consults?

A

EA actions within 120 calendar days of issuing notice, but if stalled not less than 90 days after initiation WO will elevate matter to ensure timely completion.

Termination consultations completed between 30 calendar days.

38
Q

What is the purpose of a 10(c) Investigation consultation?

A

To obtain additional information that is not available from the bank or where facts of the case are in dispute.

39
Q

What are some examples of matters requiring an investigation consultation?

A
  • Involvement of third parties where bank does not have info
  • lack of data to form the facts of the case
  • need to review info or interview individuals.
40
Q

What are the timing requirements for a 10(c) Investigation consultation?

A

Acted upon within 30-60 days.

41
Q

Can WO request additional information from the bank during a consult?

A

Yes, but some factors should be considered including:

  • time/resources needed to collect data
  • burden on bank
  • importance of info
42
Q

What should be done if additional CMS concerns are identified during a consultation?

A

Document in consultation template and inform RO management to determine supervisory strategy to appropriately identify, address, and mitigate risk of consumer harm.

ex: expand exam scope, address at future exam/visitation, conduct separate investigation

43
Q

How is restitution tracked?

A

All restitution above $1,000 recorded in FIAT system including amount, date of payment, and number of consumers.

Recorded in month notification of payment is received and updated on 8th day of following month.

44
Q

Who is responsible for timing and tracking of RO & WO consultations?

A

The RO for RO consultations

WO for WO consultations

Compliance Laws and Regulations (35 decks)

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