On March 3, the OIG for the Fed and CFPB published a report titled “The Bank Exams Tailored to Risk Process Promotes Risk-Focused Supervision of Community Banking Organizations, but Training Can Be Enhanced,” evaluating the effectiveness of the Bank Exams Tailored to Risk (BETR) process implemented by the Fed. The report highlighted how the BETR process promotes a risk-focused approach to supervising community banking organizations, ensuring that supervisory efforts are aligned with the specific risk profiles of these institutions. It also identified a need for enhanced training on the BETR process and models, as some examination staff expressed a desire for more information and resources. The report recommended developing comprehensive training that covers BETR risk model metrics, adjustment factors, bump-up rules, and the process for using BETR to scope examinations. Additionally, the report recommended establishing a process to periodically assess training needs as the BETR program evolves. The Fed concurred with the recommendations and outlined actions to address them, including implementing new training modules and assessing training gaps.
