Exam (elaborations)
TE Study Guide - Formal Administrative Actions (15.1) Questions and Answers
- Course
- Institution
TE Study Guide - Formal Administrative Actions (15.1) Questions and Answers
[Show more]
Content preview
TE Study Guide - Formal AdministrativeActions (15.1) Questions and Answers
What is a formal enforcement action? - Answers -Notices of orders issued by FDIC
against a bank or IAP. They are legally enforceable and most notices and final orders
are published after issuance.
When is a formal enforcement action used? - Answers -To reduce risks and address
deficiencies.
- Generally, for a composite rate 4 or 5
- Conditions or concern over a high volume or severity of violations.
When can the formal enforcement action be modified? - Answers -A modification order
must be issued to modify an existing order.
When can the formal enforcement action be terminated? - Answers -When any of the
following exist:
- Conditions and relevant circumstances at the bank have improved sufficiently and
formal action no longer needed.
- Provision of the formal action have been fully satisfied
- A new formal or informal action has been issued to replace the existing action and
address any outstanding issues.
- Conditions of the bank have deteriorated and a new action has been initiated.
Section 8 of the FDI Act provides the FDIC's Board with broad enforcement powers.
What does Section 8a do? - Answers -Terminate deposit insurance
Section 8 of the FDI Act provides the FDIC's Board with broad enforcement powers.
What does Section 8b do? - Answers -Issue cease and desist orders
- Can say bank engaging in unsafe or unsound practice if 3 rated AQ, management,
earnings, or liquidity.
Section 8 of the FDI Act provides the FDIC's Board with broad enforcement powers.
What does Section 8c do? - Answers -Invoke temporary (effective upon service) cease
and desist orders
Section 8 of the FDI Act provides the FDIC's Board with broad enforcement powers.
What does Section 8e and 8g do? - Answers -Remove IAPs or prohibit their
participation in bank affairs
, Section 8 of the FDI Act provides the FDIC's Board with broad enforcement powers.
What does Section 8s do? - Answers -Issue orders to C&D from violating certain AML
regulations.
Section 8 of the FDI Act provides the FDIC's Board with broad enforcement powers.
What does Section 8w do? - Answers -Terminate deposit insurance for certain money
laundering offenses.
Is only the FDIC Board authorized to deem something unsafe and unsound? - Answers
-Yes.
Can examiners use the term "unsafe and unsound" in the ROE? - Answers -No, they
can use undesirable, unacceptable, imprudent, etc.
Does the ROE serve as primary evidence to support formal actions? - Answers -Yes.
Is a recommendation for the formal action dependent on the ROE being finished? -
Answers -No. DO NOT wait until the end of the exam to recommend formal order.
Should consult with RO ASAP.
What should be included in the memo to the RO for the formal order? - Answers -
Should include suggested measures and timeframes for correcting each undesirable
practice or condition.
Should also include names and home addresses of any individuals to be named in the
formal action to facilitate the service of a Notice of Charges.
(True/False) Examiners have to review compliance with a formal order during exams.
They should include a summary of O/S formal enforcement actions in the ECC section.
Document in factual manner the steps management has taken to comply with
provisions. - Answers -True.
Can Examiners use conclusory statements of opinion (bank in compliance with
provision)? - Answers -No, not for us to decide.
Does the FDI Act define the difference between unsafe and unsound practice versus
condition? - Answers -No. The FDIC Board has established some examples from
previous Section 8 proceedings.
What is this, an unsafe and unsound practice or condition? If continued, would result in
abnormal risk of loss or damage to the bank, its shareholders, or the DIF. - Answers -
Unsafe and unsound practice.
What are some practices deemed unsafe and unsound? - Answers -- Inadequate capital
- Hazardous lending and tax collection practices (extending credit without info,
inadequately secured, overdrafts w/o controls, etc.)
- Inadequate liquidity
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller millyphilip. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $11.99. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
75759 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now