2.  Information supplied by the banks for the examination process should be provided electronically so that examiners do not need to re-key the information.

3.  Reduce the frequency of Call Reports for banks that have CAMELS rating of 1 or 2 and are considered well capitalized to semi-annual reports.

4.  Reduce the costs of submitting a Call Report and develop a secure website so that each financial institution can submit call report data on the Internet.

I agree. We need to make sure this information is protected and kept confidential. In fact, this has been a concern of ours for some time.

We’ve asked our examiners to refrain from requesting information via e-mail or otherwise over the Internet. We also looked at the idea of using a common encryption method but ultimately decided it would be overly burdensome to the industry. Why? Because in order for key encryption methods to be successful, the entire industry would have to purchase similar encryption products. Because the various encryption key standards make it difficult to ensure that everyone involved is able to decrypt incoming information from outside a particular entity, the FDIC decided to pursue a different methodology for gathering data. The FDICconnect website, which is currently being pilot tested, was developed to provide a conduit for institutions to receive institution-specific information from the FDIC and for the institutions to provide data directly to the FDIC. This system is in its infancy but all indications are that this should be a viable method for secure information transfer in the future We will always be looking for better ways to protect confidential supervisory information. This is very important to us.

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2.    Information supplied by the banks for the examination process should be provided electronically so that examiners do not need to re-key the information.

Any duplication of effort is a waste of time to the bank and to the examiner. We should always be looking for ways to make the process more efficient. We recently completed an initiative among the banking agencies to standardize data requests. We are also using software to import the bank’s own electronic loan information for loan review processing and report production – this saves both of us valuable examination time and eliminates much of the need for manual inputs.

So we’re making some progress here. We can do better. In fact – in response to your suggestion – we’re looking at ways to use FDICconnect to collect bank data online and electronically (without a site visit) so more of the exam can be conducted off premises. If we can make that work, it will result in a less burdensome exam. Good suggestion. We’ll keep you posted.

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3.  Reduce the frequency of Call Reports for banks that have CAMELS rating of 1 or 2 and are considered well capitalized to semi-annual reports.

I understand your concern about the call reporting burden. But I must tell you: the frequency of Call Report reporting is not up to us. It is a matter of law. Because Call Report data serves a wide range of constituencies – from the agencies to the banking sector to the general public, reducing the frequency of reporting for some institutions would be problematic. Such a change may disturb the value of some time series and/or derived calculations. The FFIEC agencies will continue to assess the amount of information to be reported, perhaps crafting smaller, more focused schedules based on risk profiles. We are also developing tools to make it easier to correctly compute the data to be reported and easier to file the reports. My goal with the FDIC’s data modernization project is to get better data faster with less burden. And I welcome your thoughts on how to do this.

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4.   Reduce the costs of submitting a Call Report and develop a secure website so that each financial institution can submit call report data on the Internet.

I would love to set up such a system tomorrow. It makes perfect sense given the state of the technology and the need for good, timely data. In fact, we’re looking at implementing just such a thing.

We have convinced the other agencies to begin moving toward an Internet-based Central Data Repository for the collection, storage, distribution and management of Call Report information. Under this system, Call Reports will be submitted over the Internet and we’ll confirm by e-mail that we’ve received the reports. We’ll also use e-mail to report and correct any errors in the submission. We expect most financial institutions will continue to use vendor-developed software to calculate their Call Reports and format the information for transmission to the Central Data Repository. This practice helps most institutions reduce costs by spreading the costs of software development and maintenance across a number of institutions using the same product.

Because financial institutions use a wide range of software programs and technical platforms to manage their information, the we are promoting an approach that focuses on the reporting of data, rather than the filing of a specified format. We will then publish all of the necessary information to calculate, edit and display Call Report data. This information will be available in electronic formats for ease of input into Call Report software packages. The proposed approach anticipates providing an Internet-based access to the Call Report data for quick analyses and distribution to users.

I believe this system will reduce the call reporting burden and will maximize use of existing technology. More importantly, it will allow us to get – and distribute back to you – more timely bank information.

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