Financial Institutions

Monday, 11 December 2017

Accounting and tax update for today's financial institutions

Written by The Rehmann Team

The accounting and tax tips your need to know today.  Accounting standards and regulations are becoming more complex and costs to comply are on the rise. Let Rehmann keep you informed of the latest accounting and tax changes to keep your institutions moving forward...

Friday, 27 October 2017

Regulatory agencies issue updated CECL Q&A

Written by Rehmann Team

In June 2016, the Financial Accounting Standards Board (FASB) issued a new accounting standard that introduces the current expected credit losses (CECL) methodology for estimating allowances for credit losses. The standard applies regardless of bank size, for institutions that file regulatory reports that conform to U.S. GAAP...

Regulatory agencies listened to bankers’ feedback when developing the new Consolidated Reports of Condition and Income for Eligible Small Institutions (FFIEC 051), a shorter call report to replace FFEIC 041. The new call report, used since March 31, 2017, balances banks’ requests for a less burdensome reporting process with the need to collect enough data to monitor the condition, performance, safety and soundness of financial institutions. FFIEC 051 applies to approximately 5,200 banks with domestic offices only and assets of less than $1 billion. An institution’s total assets are measured as of June 30 each year to determine its eligibility to file FFIEC 051 beginning in March of the following year...

Friday, 27 October 2017

Was the Equifax breach avoidable?

Written by Rehmann Team

Cybersecurity has been a hot issue in the banking industry for years, with regulators pushing bank leadership to mitigate risks by testing the security of platforms and online delivery channels to expose potential weaknesses. Equifax learned the hard way just how important this is. Cybercriminals found and exploited a flaw in Equifax’s website in March 2017. Since Equifax failed to patch the hole, it was used again in May, June and July in a massive data breach...

Friday, 27 October 2017

FIL-22-2017: Adoption of supervisory guidance on model risk management

Written by Rehmann Team

The FDIC is adopting the Supervisory Guidance on Model Risk Management previously issued by the Fed and the OCC. However, it is not expected to apply to FDIC-supervised institutions with under $1 billion in total assets, unless the institution's model use is significant, complex, or poses elevated risk to the institution. The guidance addresses supervisory expectations for model risk management, including: model development, implementation, and use; model validation; and governance, policies and controls. The FDIC is adopting this guidance due to bank’s increasing use of and reliance on data-driven, quantitative tools...

Friday, 04 August 2017

Shortage of appraisers raises concerns

Written by Rehmann Team

The FDIC, the Board of Governors of the Federal Reserve System, the OCC, and the NCUA are aware of the issues related to the shortage of certified and licensed appraisers, and how that impacts timely real estate appraisals in rural areas. The agencies have issued an advisory that is not a new policy, but rather highlights the authorization for temporary practice permits and temporary waivers. Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) requires that appraisals for federally related transactions (FRT) be performed by individuals who meet certain certification or licensing requirements. An FRT is any real estate transaction that the FDIC or any FDIC-regulated institution engages in or contracts for, and requires the services of an appraiser...

Friday, 04 August 2017

Residential sales values rebound since great recession

Written by Rehmann Team

Regionally and nationally, the value of residential homes has generally increased following the recent financial crisis. In most regions, home values reached their lowest levels in from 2009 through 2011, and have rebounded above levels seen in 2006. “Home prices continue to climb and outpace both inflation and wages,” says David M. Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices...

Since 2015, more than 244 lawsuits have been filed against businesses, including some banks, alleging that individuals with disabilities are being denied access to goods and services due to inaccessible websites. Specifically, Title III of the ADA requires companies to “provide auxiliary aids and services (including accessible electronic information technology (EIT) for individuals with visual, hearing, motor and cognitive disabilities) to ensure effective communication, absent an undue burden or fundamental alteration to the goods and services.” It is unlikely that Department of Justice (DOJ) or a court would conclude that website accessibility modifications would cause undue burden to a bank; therefore, non-compliance with the ADA opens a bank to legal and financial risk. Since definitive standards have not yet been developed, and are not expected to be developed by the DOJ until 2018, technical standards of WCAG 2...

Friday, 04 August 2017

Supervisory guidance on model risk management

Written by Rehmann Team

The FDIC’s recent supervisory guidance on model risk management provides financial institutions with detailed information that will help them prepare for supervisory examinations related to model risk management. The guidance addresses: model development, implementation and use; model validation; governance, policies, and controls. However, the guidance does not apply to institutions with under $1 billion in total assets “unless the institution's model use is significant, complex, or poses elevated risk to the institution.” Financial institutions increasingly rely on quantitative analysis of complex modeling for much of their decision making, including enterprise risk management, underwriting, valuing instruments and positions, measuring risk and determining adequate capital ratios, among other financial decisions...

Friday, 04 August 2017

Cybersecurity assessment tool updates

Written by Rehmann Team

The Federal Financial Institutions Examination Council (FFIEC) has released an update to the Cybersecurity Assessment Tool (CAT). While there were no changes to the questions on the Inherent Risk Profile Input or the declarative statements of the Cybersecurity Maturity Input, the updates address changes to the FFEIC IT Examination Handbook and provide more response options that allow financial institution management to include additional behaviors, practices and processes to better represent current practices that support its CAT. The FFIEC CAT was initially developed as voluntary guidance to help management determine the institution's risk profile and cybersecurity preparedness by providing a repeatable and measurable process, including: Inherent risk profile – identifies the risk by the types, volume, and complexity of the bank’s technologies and connections, delivery channels, products and services, organizational characteristics, and external threats, notwithstanding the bank’s risk-mitigating controls. Cybersecurity maturity – evaluated in five domains: Cyber Risk Management and Oversight, Threat Intelligence and Collaboration, Cybersecurity Controls, External Dependency Management, and Cyber Incident Management and Resilience...

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