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Vol. 7,
No. 2
October 2010
Ombudsman Report to the Industry
Message from Cottrell L. Webster, FDIC Ombudsman
I am pleased to present the latest in our series of online reports to
the financial services industry about issues and concerns raised to
the FDIC Office of the Ombudsman. This report covers the period
January
1, 2010, through June 30, 2010.
During the first half of the year, 442 industry representatives contacted
the Ombudsman requesting assistance. In addition, Ombudsman staff
spoke about banking matters with
93 financial industry representatives through outreach visits, telephone
calls and industry-sponsored conferences. The major area of concern
for industry representatives continued to be the struggling
economy, but also evident was concern about regulation changes
and examinations they perceived as aggressive, particularly those
relating to loan quality.
We welcome suggestions and concerns about the FDIC in
its supervisory role. The Ombudsman summarizes these comments for
FDIC senior management review – without attribution – to
eliminate the possibility of reprisal. In addition to regional
ombudsmen, ombudsman
specialists in Washington, D.C., provide assistance, regardless
of your location. Please click here www.fdic.gov/regulations/resources/ombudsman for
more information.
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Cottrell L. Webster
Director
Office of the Ombudsman |
Concern
about Examinations and Regulations
During the first half of 2010 the majority of bankers contacting
the Ombudsman sought guidance on changes in regulations.
For example, a few de novo institutions expressed the opinion that
the new guidance, "Enhanced Supervisory Procedures for Newly
Insured FDIC-Supervised Depository Institutions," was not clear.
Even so, relatively few bankers complained to the
FDIC's
Office
of the
Ombudsman
about the approximately 3,839 examinations conducted in the first
half of 2010.
Regarding complaints, some bankers expressed frustration about examinations
they perceived to be overly aggressive, while others dislike
the manner
in which examiners communicate negative information. Some bankers
suggested that examiner's tough loan reviews are discouraging lending.
The Office of the Ombudsman acknowledges the sincerity of these complaints
without opining on their individual basis in fact.
Conveying and receiving negative information is often
a perception issue. FDIC supervisors recognize this challenge,
and periodically relay bankers'
concerns to examiners. FDIC Chairman Bair is aware of
industry concerns and wants to assure bankers
that the FDIC is trying
to
achieve a balanced approach to supervision during these challenging
times. Bankers who believe their examination is overly
harsh may contact the FDIC's Office of the Ombudsman to
allow the FDIC
the
opportunity to address the issue.
The increased number of problem banks, 829 as of June 30,
2010, has led to an increase
in the average time it takes the FDIC to issue reports and process
applications. Institutions whose ratings are being lowered
may experience an increase in processing time. The FDIC has recently
increased its workforce to ensure processing times are as brief as
possible.
As significant changes in regulation occur with passage of
the Dodd-Frank Wall Street Reform and Consumer Protection Act
of 2010, banker reaction
to these issues will emerge in future reports to industry.
NOTE: If you have comments or suggestions about this semiannual report, please contact
FDIC Ombudsman Cottrell Webster at (703) 562-6040, or by e-mail at cwebster@fdic.gov.
To receive e-mail notifications of future Ombudsman semiannual reports as soon as
they are posted to the FDIC's Web site, follow the instructions at E-Mail updates.
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