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Federal Deposit
Insurance Corporation

Each depositor insured to at least $250,000 per insured bank

Community Banking Initiatives

Examination and Rulemaking

FDIC Community Banking Initiatives Summary of Roundtable Findings and Examination and Rulemaking Review Activities

Community banks play a critical role in the financial system as well as the overall U.S. economy by extending credit to their communities and fueling job creation. Emerging from the financial crisis, community banks face unique challenges that require specialized and thoughtful attention. In the fall of 2011, the FDIC announced it would undertake a number of initiatives to further the understanding of the evolution of community banks during the past 25 years, current challenges and opportunities for community banks, and implications for the future of community banking.

The FDIC launched the Community Banking Initiative (CBI) in February 2012 with a national conference on community banking. Following the conference, the FDIC's Acting Chairman hosted roundtable conferences between community bankers and senior FDIC staff in each of the FDIC's six regions to hear local concerns. Further, the FDIC's Divisions of Risk Management Supervision (RMS) and Depositor and Consumer Protection (DCP) undertook comprehensive reviews of their examination and rulemaking processes to identify opportunities to make these processes more efficient and effective, without altering the FDIC's supervisory standards. This document summarizes those activities.

Section I summarizes the regional roundtable discussions between FDIC senior management and hundreds of community bankers from March to October of 2012. Section II discusses the actions the agency is taking to address concerns and improve efficiencies and effectiveness in its examination and rulemaking processes.

Section I: Roundtable Discussion Findings

Description of Roundtable Discussions: Roundtable discussions were held in the FDIC's six supervisory regions: Dallas, Atlanta, Chicago, Kansas City, New York, and San Francisco. Approximately 50 - 75 individuals attended each meeting, including community bankers, state banking commissioners, state bank trade association representatives, the FDIC's Acting Chairman, one other director from the FDIC's Board, the FDIC's RMS and DCP Directors, and the FDIC's Regional Director for that region.

Each meeting began with a panel discussion on the financial and operational challenges and opportunities facing community banks. A second panel discussion addressed the regulatory interaction process.

In order to facilitate an open and frank dialogue, no formal transcripts of the meetings were taken. FDIC staff prepared general notes on the topics and concerns discussed (in order to craft the summary findings included in this document) but did not attribute comments specifically to any individual. In addition, the discussions were closed to the public and the media.

Purpose of Roundtable Discussions: The FDIC's Board and senior management believe it is important to hear directly from community bankers, trade organizations and state supervisors regarding significant issues affecting - or likely to affect - community banks. Although the FDIC interacts with community bankers in many venues, the purpose of the Roundtable discussions was to have direct and focused dialogue on the issues and concerns of community bankers operating in the current environment and the major challenges and opportunities affecting the community bank sector as a whole. The Roundtable format was also intended to provide participants an opportunity to hear and respond to varying views on the same issues from a broad array of attendees.

The insights provided during the Roundtables helped inform other components of the FDIC's 2012 CBI, including the review of examination and rulemaking processes. The information also was used as part of the FDIC's comprehensive research project regarding the evolution of community banking, which is discussed in a separate paper.

Findings from the Roundtables: Topics discussed during the Roundtables varied depending on the interest of the attendees. Therefore, the following should not be considered a comprehensive listing of all topics discussed, but rather a description of the most common issues and concerns noted.

Panel 1: Financial and Operational Challenges and Opportunities Facing Community Banks

Panel 2: Regulatory Interactions

Bankers and other attendees at the Roundtables expressed wide-ranging views on regulatory interactions. Generally, comments can be categorized under four headings - General Examination Issues, Communication, Regulation, and Technical Assistance. The summary below organizes banker comments under these headings, and Section II of this document explains FDIC actions taken and being taken to improve or enhance processes.

Section II: Review of Examination and Rulemaking Activities

Purpose and Description of Review of Examination and Rulemaking Activities: The FDIC has undertaken a review of its examination, rulemaking, and guidance processes during 2012 with a goal of identifying ways to make the supervisory process more efficient, consistent, and transparent.

As a part of this process, RMS and DCP solicited feedback from examiners. The Divisions also received significant comments through the CBI Roundtables (discussed above) and the Community Bank Advisory Committee, as well as post-examination surveys and other outreach initiatives. Based on the interests of community bankers participating in the Roundtables in Atlanta and Kansas City, the FDIC also conducted two additional roundtables focused on compliance and consumer protection issues in these regions, led by the DCP Director.

Overall findings from the Review of Examination and Rulemaking Activities: Many of the comments from the FDIC's internal review paralleled comments received from bankers during the Roundtable discussions summarized above. In response to this feedback, FDIC has undertaken a number of actions to improve its processes. The actions are discussed below and are organized the topical headings used in the "Regulatory Interactions" portion of Section I above - namely: General Examination Issues, Communication, Regulation, and Technical Assistance.

The FDIC considers its review of examination and rulemaking processes as ongoing.  Therefore, the listing below represents a current inventory of related actions; additional actions, enhancements, and modifications to our processes likely will occur.

Actions to Address Examination and Rulemaking Review Findings:

General Examination Issues
Communication:
Regulations:
Technical Assistance: