VERIBANC, Inc.
VERIBANC, Inc.OpposeBusiness
Summary: The commenter opposes the removal of factors related to management depth, succession, and responsiveness to regulatory recommendations from the rating system. They argue that these factors are essential for ensuring the safety and soundness of banks and that removing them would weaken the regulatory oversight process.
It seems counter productive to remove the factors related to: “Management depth and succession,” “Responsiveness to recommendations from auditors and supervisory authorities,” Since regulators are charged with the safety and soundness of the banks they regulate, why would you want to remove critiquing management's responses to their recommendations? How is this suggested removal of language consistent with the issuance of regulatory enforcement actions (EAs)? EAs, by definition, are weaknesses in management's and/or the board of directors (BOD) implementation of policies and/or procedures as well as reactions to regulatory recommendations. A bank's safety and soundness is a result of management's decisions. Good or Bad. This proposed language will only lessen the natural tension that examinations provide for keeping banks safe and sound. Looking at bank failures historically (1991 to present), out of the 821 banks (not thrifts) that failed during this epoch only 21 banks failed due to fraud - less than 3 percent. This does not represent a flawed regulatory system needing the suggested change.