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F e d e r a l R e s e r v e B a n k o f N e w Yo r k N E W Y O R K , N. Y. 1 0 0 4 - 5 - 0 0 0 1 AREA CODE FACSIMILE C h e s t e r 212 212 7 2 0 -6 3 7 5 7 2 0 -8 7 4 2 B. F e l d b e r g E x e c u t i v e V ice P r e s i d e n t A 1 109/5 - June 13, 1994 To: The Chief Executive Officer of Each State Member Bank SUBJECT: Coordination of Specialty Examinations with Full Scope Safety and Soundness Examinations of State Member Banks Over the years, the banking industry has become more complex as banking organizations have increased their activities in specialized areas. In order to address this change, the Federal Reserve has established various specialty examination programs to evaluate electronic data processing, trust, and other specialized functions. In general, these approaches have helped to ensure that specialized functions receive high supervisory priority. However, in recent years, a number of banking organizations have reported that the increasing number of specialty examinations add significantly to the workloads of their staffs and management. As a result, and consistent with other Federal Reserve initiatives to lessen the burden of regulation on the banking industry, your state member bank is offered the option of having its electronic data processing, trust, and other specialty examination(s)1 conducted simultaneously with its regular safety and soundness bank examination. When considering this option, please be aware that during the period of a concurrent examination the number of examiners in your institution is likely to be increased from the number required to conduct a single bank or specialty examination, and that the demands on your office space and your staff may be greater over this period. In conducting these examinations concurrently, however, the Federal Reserve believes the overall amount of time that your staff spends meeting the requirements of various Federal Reserve examinations conducted over the course of a year will be greatly reduced. Consumer Compliance examinations will continue to be performed on existing, separate schedules. (Over) fa FEDERAL RESERVE BANK O F NEW Y O R K -------------± ------------------------------------ If you decide that the coordinated examination approach will be beneficial to your institution, this Reserve Bank will strive to implement that decision. However, certain constrains may preclude full coordination of all examinations each year. We ask you to recognize, further, that the coordination of examinations will not preclude Reserve Banks from conducting targeted examinations in areas of financial or operational concern at any time. Please be assured that requests for the coordination of specialty examinations with regular, full scope, safety and soundness examinations will be given our full and prompt attention. If you wish to have the Federal Reserve examination staff begin to arrange its scheduling so that these aspects of regular safety and soundness examinations of your state member bank can be conducted concurrently, or if you have any questions about this program, please call Mr. Donald E. Schmid, Manager, Domestic Bank Examinations, at (212)720-6611. Yours truly, Chester B. Feldberg Executive Vice President
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