Thursday, January 28, 2021
Corporate Compliance Insights
  • Home
  • About
    • About CCI
    • Writing for CCI
    • NEW: CCI Press – Book Publishing
    • Advertise With Us
  • Articles
    • See All Articles
    • NEW: COVID-Related
    • Compliance
    • Ethics
    • Risk
    • FCPA
    • Governance
    • Fraud
    • Internal Audit
    • HR Compliance
    • Cybersecurity
    • Data Privacy
    • Financial Services
    • Leadership and Career
  • Vendor News
  • Jobs
  • Events
    • Webinars & Events
    • Submit an Event
  • Downloads
    • eBooks
    • Whitepapers
  • Podcasts
  • Videos
  • Subscribe
No Result
View All Result
  • Home
  • About
    • About CCI
    • Writing for CCI
    • NEW: CCI Press – Book Publishing
    • Advertise With Us
  • Articles
    • See All Articles
    • NEW: COVID-Related
    • Compliance
    • Ethics
    • Risk
    • FCPA
    • Governance
    • Fraud
    • Internal Audit
    • HR Compliance
    • Cybersecurity
    • Data Privacy
    • Financial Services
    • Leadership and Career
  • Vendor News
  • Jobs
  • Events
    • Webinars & Events
    • Submit an Event
  • Downloads
    • eBooks
    • Whitepapers
  • Podcasts
  • Videos
  • Subscribe
No Result
View All Result
Corporate Compliance Insights
Home Governance

The Examiners are Coming!

by Bob Mengani
March 21, 2016
in Governance
The prospect of a regulatory examination can be stressful, but it doesn’t have to be.

As Paul Revere gazed out his window, seeing the signal lantern in the tower of the North Church, he cried out… “The Examiners are coming!!! The Examiners are coming!!!”

Paul’s wife, startled, leapt to her feet and excitedly remarked, “Now what do we do?”

First of all, do not panic. Most likely you have been operating for approximately 12 to 18 months as a de novo licensee, and hopefully your operations have not only been successful, but also profitable.  Some regulators prefer to contact a licensee by phone with the news that the examiners will be arriving shortly to conduct the first examination.  During this initial call, they will provide you with a list of required documentation to be prepared in anticipation of the examiners’ on-site arrival.  Other regulatory agencies choose to send out what the examiners refer to as a “first day letter request” (FDL).  The FDL details the required documentation to be readied for the examination and, in some instances, identifies and provides contact information for the Examiner-in-Charge (EIC) of the examination.

In today’s environment, the majority of the agencies prefer to receive the FDL responses in electronic form.  Additionally, you may be required to transmit to the EIC some of the documentation prior to the examiners’ on-site arrival.  This is done to reduce the amount of time the examiners spend on site conducting the examination, which not only reduces the cost of the examination, but also eliminates some of the business disruption created by the examiners’ on-site presence. Most examinations will take approximately one week; however, if you are larger entity, you can expect examiners to spend up to 10 days on site.

There are other points and tips for you to keep in mind as you plan for your first or next examination. On the first day of the examiners’ arrival, provide them with a tour of your facility and introduce them to the key staff they will be interacting with during the examination.  Situate the examiners in a comfortable area or conference room with access to a phone, copy machine, and Internet, with restroom facilities nearby. Provide them with the company telephone directory and some basics supplies (i.e., pen, pencils, highlighters, stapler, staple remover, paperclips, note pads and tape).

Another important point to remember is to select one individual as the “single point of contact” to whom examiners will direct all questions and requests for information before, during and after the examination.  Ask examiners to make all requests for information in writing, which will ensure that all requests are responded to accurately and promptly and that there is no confusion or misinterpretation of what has been requested. Keep a written log of the individual requests, the date of said request, the name of the examiner making the request, the officer or employee assigned to reply and the date you responded to the request, and remember to make a copy of the response.

Schedule a fixed time when you will have a daily or weekly meeting with the examiners to review the progress of the examination. Are the examiners encountering any issues of concerns? Are there any problems that need to be addressed?  Are the examiners getting what they need?

Make certain if the examiners have identified any problems, issues or suspected violations of laws or regulations that the issues are elevated to the appropriate senior manager. Document each concern in writing.  All issues should be discussed with the examiners during the examination.  There should be no surprise findings presented after examiners have concluded the on-site examination.

If examiners identify an issue or suspected violation, do not hide it; acknowledge the problem and make a start to fix it.  The goal is to get it right!  Importantly, be sure to immediately make senior management aware of the issue(s).

Before examiners leave, make certain that an exit meeting is scheduled with senior management to review all of the examiners’ findings. Again, there should be no surprise findings presented in the written report that were not presented and discussed during the examination and at the exit meeting.

Finally, remember to keep notes and make a record of all meetings. Include the name of the examiner(s), the date and time of the meeting, who was at the meeting and the issues discussed. Any follow-up actions should be noted, including who is assigned to the follow-up and a deadline for responses.  Document and retain a copy of all responses, which will protect you and the examiners from any misunderstandings that may arise after the examiners depart your office.

The examination should not be a confrontational event, as the licensee’s and the regulator’s mission should be aligned.  Specifically, business activities are being conducted honestly, fairly, equitably and efficiently. You are operating in a safe and sound manner, consistent with the laws and regulations and hopefully in a profitable manner, which will result in a sound financial condition.


Previous Post

Corporate “Successor” Liability

Next Post

Protiviti: Principles for Improving Board Risk Reporting

Bob Mengani

Bob MenganiBob Mengani is Managing Compliance Director at Chartwell Compliance. Bob retired on April 29, 2015, after more than 36 years of service with the New York State Department of Finance (“the Department”). His experience is broad and diversified, having served in all of the Department’s significant operating divisions. Most recently, Bob completed eight years of service in the Licensed Financial Services Division, which is responsible for the oversight of six non-bank industries licensed and supervised by the Department. The industries include licensed cashers of checks, transmitters of money, sales and premium finance companies and budget planners.  Bob was also a valued member of the Department’s Virtual Currency Working Group, responsible for the Department’s recently published Virtual Currency Regulations. For more information please visit www.chartwellcompliance.com.

Related Posts

illustration of executive standing center stage with team in silhouette behind him

COVID-19: Navigating the “CEO Moment”

January 13, 2021
clipboard with silver bow and new year's resolutions list on blue background

New Year’s Resolutions for the Board in 2021

January 11, 2021
PwC: Board Effectiveness – A Survey of the C-Suite

PwC: Board Effectiveness – A Survey of the C-Suite

December 28, 2020
quality level dial set to "high"

Caremark: Even the Highest Standard Can Be Met

December 23, 2020
Next Post
Protiviti: Board Risk Oversight

Protiviti: Principles for Improving Board Risk Reporting

Access realtime data
Dynamic Risk Assessments with Workiva

Special Coverage

Special COVID page graphic

Jump to a Topic:

anti-corruption anti-money laundering/AML Artificial Intelligence/A.I. automation banks board of directors board risk oversight bribery CCPA/California Consumer Privacy Act Cloud Compliance communications management Coronavirus/COVID-19 corporate culture crisis management cyber crime cyber risk data analytics data breach data governance decision-making diversity DOJ due diligence fcpa enforcement actions financial crime GDPR GRC HIPAA information security KYC/know your customer machine learning monitoring ransomware regtech reputation risk risk assessment Sanctions SEC social media risk supply chain technology third party risk management tone at the top training whistleblowing
No Result
View All Result

Privacy Policy

Follow Us

  • Facebook
  • Twitter
  • LinkedIn
  • RSS Feed

Category

  • CCI Press
  • Compliance
  • Compliance Podcasts
  • Cybersecurity
  • Data Privacy
  • eBooks
  • Ethics
  • FCPA
  • Featured
  • Financial Services
  • Fraud
  • Governance
  • GRC Vendor News
  • HR Compliance
  • Internal Audit
  • Leadership and Career
  • Opinion
  • Resource Library
  • Risk
  • Uncategorized
  • Videos
  • Webinars
  • Whitepapers

© 2019 Corporate Compliance Insights

No Result
View All Result
  • Home
  • About
  • Articles
  • Vendor News
  • Podcasts
  • Videos
  • Whitepapers
  • eBooks
  • Events
  • Jobs
  • Subscribe

© 2019 Corporate Compliance Insights