Getting Everyone Ready For The Exam

When the examiners announce they are coming, a flurry of activity begins. You review your internal audits, check monitoring reports and responses, convene your committee (or committees) and notify everyone you can think of. You compile the information the examiners have requested. If you are on top of things, you review it before you send it out so you know what they might find.

If you have done all this preparation, what can go wrong when the examiners come? Besides the possibility that they will find something that they think is a violation, there is plenty that can go wrong: involving almost everyone in the bank.

Bank employees are almost universally nervous about examiners. Some talk about examiners in hushed voices. Others make themselves scarce. The body language of some employees is enough to convince examiners that something big is being hidden from them. How do you manage this?

The trick here is to establish some rules about communications with examiners and - simultaneously - build a comfort level with those communications. You want to minimize employee fears and concerns while elevating their comfort level. But don't elevate their comfort level so much that they will tell the examiners anything. That is what the rules about communications are for.

You may also encounter problems when someone decides that it is a good idea to be extra helpful to the examiners. Once started, they many say all kinds of things. You never know when an examiner, looking for some excitement, will pick up on something your talker has mentioned and turn it into a new examination issue.

You should establish rules for who talks to examiners and what they may talk about. You should also have guidelines on who is limited to "good morning, how was your drive?" and "would you like coffee? I'm just going to get some for myself."

You also want to develop confidence for those who do talk with examiners so that they present themselves and the bank well. To do this, they need to understand how examiners work and what their questions actually mean. What sounds sinister is usually not anything significant. It is just that it can sound that way when an examiner says it.

So, consider holding some training on how to behave around examiners. You can explain what the examiners will be doing. You can also cover the communication rules, including who may or may not say what to which examiners. And equally important, cover the examiner courtesy rules. The goal is to give everyone a high enough comfort level so that no-one acts foolish or looks guilty.

ACTION STEPS

• Explain the examination process. Describe what examiners look at and information they will need. Estimate how long they will be here.
• Assign responsibility for providing information to examiners and for answering examiners' questions about specific functions and products. Make sure everyone knows who is supposed to answer these questions. Everyone else should refer the examiners to the designated responders.
• Discuss how to talk to examiners. Recommend that people are candid but only answer questions if they are designated responders. Everyone else should remind the examiner (politely) to "see Sam about that."
• Explain that the examiner's responsibility is to determine that the bank is doing business in full compliance with laws and regulations. It is the examiner's responsibility to ensure that the bank does business in a safe and sound manner. In short, it is the examiner's job to keep the bank open.
• Do not expect praise from the examiners. It is not their job. Their job is to identify and correct any problems. Giving praise is nerve-wracking - what if they missed something?
• Examiners are not allowed to accept gifts or things of value. This is to ensure that their examination and findings are not influenced by how nice you are to them or the value of a gift. In short, be polite, but don't push favors on them. A cup of coffee is as far as it goes. Most important, don't expect anything in return.
• Examiners do appreciate creature comforts. It is ok to offer to bring them something or to take something back to the files.
• Examiners are examiners, not friends. Don't put the examiner in a difficult position by attempting to make friends. Be polite and friendly, but keep it at arm's length.

Copyright © 1999 Compliance Action. Originally appeared in Compliance Action, Vol. 4, No. 10, 8/99