Choose your examination adventure: are you Winston Churchill or Neville Chamberlain?

by: Shelbey Neil

Winston Churchill once said, “To build may have to be the slow and laborious task of years. To destroy can be the thoughtless act of a single day.”

Financial institutions can surely relate to that quote—compliance is certainly the slow and laborious task of years and then your examiner comes in and can, so it seems, destroy your hard work in the matter of a day. That’s why examinations can feel like a power struggle between institution and examiner—and examiners typically have the upper hand. But there is a way to help tip the scales back in your favor and assert control of your examination.

Before I get to that, however, one thing to keep in mind is that nothing presented below is meant to suggest an attempt to divert your examiner’s attention from important issues. However, you want to be the one supplying them with relevant material to review. Otherwise, you can expect your examiner to spend his or her time delving in any number of directions, the outcome of which is uncertain and is sure to lead to follow-up questions after reviewing an entire loan file.

These questions are often posed well after the fact and may be directed at a loan officer, who, lacking adequate documentation for decisions and processes, is forced to rely on his or her memory. That’s not easy for anybody to do. Next thing you know, your loan officer may be saying things that aren’t compliant and you have just triggered a lot more scrutiny, a difficult examination, and even the potential for civil monetary penalties and referrals.

continue reading »