Page 2
The Banker’s Advocate
State Bank Department
VIEW
accreditation and certifica- by the staff director of the
tion. Performance Standards
REFORM
Continued from Page 1
A Review Team evalu- Committee. The purpose
Continued from Page 1
statutory responsibilities.
ates the capability of a of audit review is to en-
system of financial over-
The critical components
bank department to estab- sure consistency and pro-
sight. As the United
of a bank department’s
lish and maintain a well- fessionalism in the ac-
States struggles to emerge
operations are evaluated:
managed regulatory pro- creditation process.
from an economic crisis,
gram, to conduct high- Next, the Review Team
 Administration and
CSBS believes it is pru-
finance.
quality bank examinations, and Audit Team submit
dent to review our regula-
and to enforce statutes their findings in written
 Personnel policies and
tory structure in an effort
practices.
and regulations. reports to the Perform-
to make alterations that
While on site, a Review ance Standards Commit-
 Training program.
will enhance the strengths
Team scours files, docu- tee, which makes the final
 Examination policies
of our unique system of
and procedures.
ments, correspondence decision on accreditation
oversight and limit our
and records relating to all or reaccreditation.
 Ability to rate finan-
vulnerability to inevitable cial institutions, identify
functional areas of a bank The Review Team as-
future market downturns. problems and initiate cor-
department. In the area signed to our office con-
The administration’s rective procedures.
of regulation and supervi- ducted an on-site visit
plan is a strong endorse-
sion, the team makes ran- March 9-11. At the “exit”
 Supervisory proce-
ment of the value of our
dures and statutory en-
dom checks of bank ex- interview, the team told us
dual-banking system. Pre-
forcement authority rela-
amination reports – in- our overall score ranks in
serving the role of state
tive to regulated institu-
cluding reports for the top 25 percent among
authorities as a check to
tions.
“problem” institutions – all scores.
federal authority will pre-
and reviews bank moni- I was formally notified
vent industry consolida-
 Legislative powers. toring systems, enforce- on April 21 that the Per-
tion into a handful of
This independent per- ment actions, rules and formance Standards Com-
megabanks that are too
formance evaluation is regulations, statements of mittee voted to reaccredit
big to regulate and too big
rigorous but we consider policies, examination our agency, based on the
to fail.
it a necessity. It serves as scheduling and the reports of the Review
Preservation of the state
a guidepost to how well amount of time taken to Team and Audit Team.
system of financial super-
the Bank Department prepare reports. The reaccreditation was
vision protects the great-
does its job. In addition, an on-site our fourth since the Bank
est strength of our finan-
Reaccreditation enables visit includes interviews Department was initially
cial system: the diverse
our employees to improve with key personnel and a accredited by CSBS in
industry it makes possible.
their collective job per- cross-section of field ex- August 1988.
The plan also protects our
formance. aminers. A bank department’s
long-standing coordina-
The first steps in the A Review Team then participation in the ac-
tion with the Federal Re-
process are a detailed self- assigns its own scores on a creditation program is
serve and FDIC in super-
assessment by the Depart- self-evaluation question- voluntary and is not re-
vising state-chartered
ment and the formation naire that already has been quired to become a mem-
banks. We believe the
by the staff director of the scored by the bank depart- ber of CSBS.
plan recognizes the value
Performance Standards ment. A team must de- Our office allocates a lot
and stability provided by
Committee of a Review termine, by whatever of resources to our goal of
community and regional
Team to conduct an on- means it deems appropri- being effective and effi-
banks. With enhanced
site evaluation. ate, if a department’s self- cient in all we do and be-
oversight, higher capital
A Review Team consists ratings are justified. ing responsive to our
requirements and the abil-
of three individuals whose A Review Team then stakeholders.
ity to resolve failed firms,
experience in bank regula- issues a recommendation Our participation in the
our economy and con-
tion is needed to accu- to accredit or not accredit program helps the Bank
sumers should no longer
rately assess the capabili- a department. Department determine if
be held hostage by firms
ties of a state bank depart- A team’s findings and these resources – and the
which are too big to fail.
ment. The team is accom- recommendation are then bank assessment fees that
panied by the CSBS vice reviewed by an Audit fund them – are being put
See REFORM, Page 3 president who oversees Team, which is assembled
to best use.
June 30, 2009
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