Pre-Exam Planning (PEP) Flashcards
What are the 3 phases of PEP?
Information Package
PEP 1
PEP2
What is the objective of PEP?
Collect necessary information to understand an institution and the risks of consumer harm prior to the start of an examination.
When does the IP letter need to be sent by?
No less than 90 calendar days before the projected start date of the exam.
What exceptions are there to the timing of sending the IP letter?
Exceptions to this timing requirement can occur on a limited basis when the FS or SE is unable to contact institution management due to unforeseen difficulties. In such circumstances, the FS or SE should send the IP as soon as possible and document reasons for the delay.
What is the purpose of the IP letter? (3)
increase banker awareness of the examination process prior to the examination;
to promote open communication with examination staff; and
to ensure that the institution’s management team knows what to expect during the examination and where to go in the event their expectations are not met.
What if the bank is unwilling to use EFX?
When the institution is unwilling to use secure applications for the electronic exchange of examination related information, the FS, SE, or designee should use an alternative delivery method (e.g., encrypted e-mail, express
mail courier service) that meets the security measures discussed in the FDIC’s policies for the exchange, use, and storage of information.
What is included in the IP letter? (4)
overview of the examination process;
discusses various resources available that explain the examination process;
identifies the appropriate communication channels
for any concerns about the examination process or the
resultant ratings;
and provides contact information for the FS
and/or the SE.
Under what circumstances would HMDA validations and outlier reviews be conducted prior to going onsite? (2)
For HMDA reporters with over 500 LAR lines.
CRA reporters.
When is the HMDA/CRA validation letter provided?
With or after the IP letter for HMDA validations conducted prior to the exam.
What is the purpose of PEP 1?
Start the process of identifying and documenting the bank’s inherent risk based on bank structure, supervisory history, financial performance, and market area.
What activities are conducted during PEP 1? (5)
Gather info about the bank Conduct PEP interview Prep and send CIDR and entry letter to bank Begin section 1 of the ARCH Begin Section 1 of the FLSC
When should PEP 1 begin?
No less than 45 calendar days prior to the exam start date.
How long does a bank have to complete the CIDR?
They must have 30 calendar days to complete the CIDR and provide requested documents.
What are the internal FDIC resources for PEP? (8)
DGT, RADD, SOURCE Prior exam ARCH, FLSC, ROE, CRA PE Supervisory plans Demographic Data UBPR, Call Reports FDIC monitoring Reports CRC Complaints Applications
What are the External Resources for PEP? (5)
Prior year HMDA and CRA Data disclosure reports Bank website Public records News or web articles Community Contacts
What is the purpose of the PEP interview?
Gather current information to understand the bank’s risk profile, size, complexity, and types of products or services offered.
When are PEP interview questions provided to the bank?
With the IP
True or False: Banks can provide written answers to the PEP interview questions prior to the actual interview?
True; however, staff cannot require the bank to provide written answers in advance. And the EIC is still expected to conduct an interview to verify or clarify responses.
