383

July 20, 2016

The Meeting of the Advisory Committee on Community Banking

of the

Federal Deposit Insurance Corporation

Held in the Board Room

Federal Deposit Insurance Corporation Building

Washington, D.C.

Open to Public Observation

July 20, 2016 – 9:00 A.M.

The meeting of the FDIC Advisory Committee on Community Banking (“Committee”) 

was called to order by Martin J. Gruenberg, Chairman, Federal Deposit Insurance Corporation 

(“FDIC”) Board of Directors.

The members of the Committee present at the meeting were: Cynthia L. Blankenship, 

Vice Chairman and Chief Operating Officer, Bank of the West, Grapevine, Texas; Pedro A. 

Bryant, President and Chief Executive Officer (“CEO”), Metro Bank, Louisville, Kentucky; 

Leonel Castillo, President and CEO, American Bank of Commerce, Provo, Utah; Christopher W. 

Emmons, President and CEO, Gorham Savings Bank, Gorham, Maine; Jane Haskin, President 

and CEO, First Bethany Bancorp, Inc., Bethany, Oklahoma; James Lundy, CEO, Western 

Alliance Bank, Phoenix, Arizona; Mary Ann Scully, Chairperson, President and CEO, Howard 

Bank, Ellicott City, Maryland; David Seleski, President, CEO and Director, Stonegate Bank, Fort 

Lauderdale, Florida; Gwen Thompson, President and CEO, Clover Community Bank, Clover, 

South Carolina; John Tolomer, President and CEO, The Westchester Bank, Yonkers, New York; 

and Derek Williams, President and CEO, First Peoples Bank, Pine Mountain, Georgia. 

Roger Busse, President and CEO, Pacific Continental Bank, Eugene, Oregon; Jack 

Hartings, President and CEO, The Peoples Bank Co., Coldwater, Ohio; Mark Hesser, President, 

Pinnacle Bank, Lincoln, Nebraska; and Arvind Menon, President and CEO, Meadows Bank, Las 

Vegas, Nevada, were absent from the meeting.

Corporation staff who attended the meeting included: Willa M. Allen, Ruth R. Amberg, 

Frank M. Blanchard, Julianne F. Breitbeil, Luke H. Brown, Michelle L. Cahill, Christine Davis, 

Debra A. Decker, Patricia B. Devoti, A.T. Dill, Willie B. Donaldson, Doreen R. Eberley, Diane 

Ellis, Shannon N. Greco, Nicholas Kazmerski, Katie L. Kramer, Eun Si Lee, Christopher Lucas, 

Greg A. Lyons, Michael S. McCoy, Gregory L. McElroy, Roberta K. McInerney, Jonathan N. 

Miller, Rae-Ann Miller, Patrick M. Mitchell, Mark Moylan, Sumaya A. Muraywid, Faye 

Murphy, Shayna Olesiuk, Mark E. Pearce, Sylvia H. Plunkett, Lee Price, Claude A. Rollin, 
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Barbara A. Ryan, Stephen H. Simpson, Robert Storch, Gordon S. Talbott, Rachel A. Ursery, 

Lester P. Washington, James C. Watkins, and Mindy West.

William A. Rowe, III, Deputy to the Chief of Staff and Liaison to the FDIC, Office of the 

Comptroller of the Currency was also present at the meeting. 

Chairman Gruenberg opened the meeting by welcoming the Committee members and 

participants. He began by acknowledging the following committee members for whom this will 

be their last meeting: Cynthia Blankenship, Vice Chairman and CFO of Bank of the West, 

Grapevine, Texas; Pedro Bryant, President and CEO, Metro Bank of Louisville, Kentucky; 

Lionel Castillo, President and CEO of American Bank of Commerce, Provo, Utah; Jane Haskin, 

President and CEO, First Bethany Bank Corp, Bethany, Oklahoma; Mark Hesser, President, 

Pinnacle Bank, Lincoln, Nebraska; James Lundy, Chief Executive Officer, Western Alliance 

Bank, Phoenix, Arizona; David Seleski, President, CEO, and Director of Stonegate Bank in Fort 

Lauderdale, Florida; and Derek Williams, President and CEO of First People's Bank, Pine 

Mountain, Georgia. Chairman Gruenberg expressed his personal gratitude to each of the 

departing Committee members and commented that each has made important contributions to the 

Committee and has enhanced the FDIC's appreciation of the challenges and opportunities facing 

community banks.

Chairman Gruenberg then provided an overview of the meeting agenda. First, a 

summary update would be provided on the FDIC’s Community Banking Initiative and the 

Community Banking Conference. Next, a panel would be presented with the intent of providing

a better understanding of the perspectives of millennials on banking. Following that an update 

would be provided of the FDIC's regulatory review under the Economic Growth and Regulatory 

Paperwork Reduction Act (“EGRPRA”). The next panel would cover issues relating to 

consumer compliance, including an interagency proposal being developed under the FFIEC to 

revise the existing Consumer Compliance Rating System to better reflect the current consumer 

compliance supervisory approaches. Next, there would be a discussion concerning 

developments in financial technology. Following that a panel would present recent supervisory 

developments, including recent updates to FDIC IT examination procedures to provide a more 

efficient, risk focused IT examination approach. In addition, senior staff from the Division of 

Risk Management Supervision (“RMS”) would provide the Committee with an update on some 

recent developments with the Financial Accounting Standards Board (“FASB”). Finally, senior 

staff would provide the Committee with some information about the interagency proposal 

concerning incentivized compensation and brokered deposits.

Chairman Gruenberg then introduced Barbara A. Ryan, Chief of Staff and Deputy to the 

Chairman and Chief Operating Officer, who would be the moderator for the day’s proceedings.

Ms. Ryan introduced the panelists for “Updates on Community Banking Initiative and 

Follow-Up from the Community Banking Conference,” Doreen Eberley, Director, RMS and 

Mark Pearce, Director, Division of Depositor and Consumer Protection (“DCP”). Ms. Eberley 

began by discussing ongoing FDIC initiatives, including the recent addition of a technical 

assistance video on corporate governance. Ms. Eberley stated that they were looking at updating 

and possibly adding to the Directors' College portfolio of videos. She indicated that over the 
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course of the next few weeks, copies of the Community Bank Resource Kit would be mailed to 

FDIC supervised institutions. 

Ms. Eberley next mentioned the discussion at the community banking conference 

concerning de novo banks and what steps that the FDIC was taking to be more helpful in the 

formation of de novo institutions. One item Ms. Eberley pointed out in particular involves

hosting roundtable meetings with organizing groups around the country starting with three 

regions, San Francisco, New York, and Atlanta, with the San Francisco roundtable meeting to 

begin held on September 28th. Ms. Eberley specifically thanked and recognized John Tolomer 

for his suggestion of using a panel of successful de novo bankers as part of the sessions. Ms. 

Eberley pointed out that this way the panel can discuss the process and the best ways to approach 

it, their experiences, what worked, what lessons were learned along the way and take questions. 

Ms. Eberley pointed out that the FDIC maintains a special page on fdic.gov for mutual 

institutions. She also mentioned that every other year the FDIC hosts a mutual bank conference 

jointly with the OCC and the Federal Reserve, the next conference is scheduled on August 4th. 

Ms. Eberley then discussed the work streams coming out of the community banking

conference relating to schools that are offering banking degrees and finding a way to facilitate 

conversation between those schools, bankers, and state banking associations, about how they 

could work together. Ms. Eberley stated that she envisions the FDIC role as bringing the parties 

together. Ms. Eberley next mentioned that the FDIC is working on its handbook for deposit 

insurance, which will be available later this year. She pointed out that in the meantime, the 

FDIC might be having a shorter article in the next version of Supervisory Insights discussing the 

process and outlining it. 

Ms. Eberley next discussed the FDIC’s ongoing work regarding technology service 

providers. In this regard, she indicated that the FDIC is actively working on ways to ensure

institutions are able to partner with their technology service providers in an equal way. Ms. 

Eberley also mentioned that FDIC guidance applies both to the institutions serviced by 

technology service providers and the technology service providers themselves. In this way, the 

FDIC is continuing to explore ways to help with that relationship and make sure that institutions 

are well positioned to perform necessary due diligence and manage those relationships. 

Ms. Eberley pointed out another way the FDIC is working to increase transparency in 

IT examination is through the new Information Technology Risk Examination Program 

(InTREx). She explained that one of the purposes of the new program is to better allow 

institutions to understand the rating system and the components of that rating system. Ms. 

Eberley went on to state that the work program has been redesigned and now aligns with the 

rating system again with the idea of increasing transparency and understanding. 

Finally, Ms. Eberley mentioned that the FDIC was conducting research into the pressure 

that institutions felt to provide liquidity to shareholders and the different ways that institutions 

are addressing that. Ms. Eberley then tuned the presentation over to Mark Pearce to provide a 

perspective from the Division of Depositor and Consumer Protection.
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Mr. Pearce began by pointing out that DCP has updated certain Technical Assistance 

Videos including those dealing with flood insurance and later this summer the ability to repay 

rule and qualified mortgage videos would also be updated. 

To better support community banks in the mortgage area, Mr. Pearce stated that the 

FDIC is providing information about how community banks can access affordable mortgage 

programs. He added that there are programs at the state level through state housing finance 

agencies. Mr. Pearce mentioned that Federal Home Loan Banks have a series of programs that 

community banks can access and there are also various Federal programs like USDA or FHA. 

Mr. Pearce pointed out that the FDIC has been working for some time to learn how community

banks have and are utilizing these programs to serve customers and doing research to put 

together a resource guide for community banks on affordable mortgage programs. Mr. Pearce 

mentioned it is his hope that by later this summer the FDIC will publish a resource guide that 

that will cover a whole series of federal programs and the opportunities in those programs, some 

potential risks or concerns for those programs, and also some stories from community bankers 

about how they have actually utilized those programs.

Finally, Mr. Pearce mentioned that over the last couple of years the FDIC has been 

trying to improve the risk focusing aspect of the pre-exam planning process. Mr. Pearce 

explained that the intent is to make sure that by the time the examiners get on site at the bank, 

they have a good understanding of the bank’s risk profile, complexity and business model. He 

said that there has been positive feedback so far on this program. 

Ms. Ryan then invited questions or comments for the panel. 

Member Tolomer commented that the video on corporate governance was excellent and 

would both be helpful for de novo as well as current boards. 

Member Lundy commented on the information provided regarding flood insurance. He 

indicated that his bank has had issues arise with flood insurance related to contents not being 

covered. He went on to explain that there are instances when flood insurance is taken on the 

building, but not on the contents. This, Member Lundy explained, is creating a situation of 

unintentional technical violations of the flood insurance policy. Mr. Pearce stated that the FDIC 

is working to try and make sure that technology service providers are providing software or 

disclosure forms in a way that helps support community bank compliance, not just technical 

compliance. 

Member Blankenship commented that the Community Bank Resource Kits were 

excellent and have also received positive feedback from her bank’s board. 

Ms. Ryan then introduced the next panel “Millennials’ Perspective on Banking.” The

intent of the panel, Ms. Ryan explained, is to provide the Committee a perspective from 

Millennials on their attitudes toward banking and how they generally access and use financial 

services. Ms. Ryan introduced the members of the panel: Stephen Simpson (moderator), 

Senior Financial Analyst in the Division of Insurance and Research (“DIR”); Frank Blanchard, 

Economic Analyst, DIR; Greg Lyons, Student Trainee, DCP; and Michael McCoy, Student 
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Trainee, RMS. Each member of the panel provided a brief summary of their respective 

experience and background. 

Mr. Simpson began the presentation by going through a slide presentation entitled 

“Millennials Shaping the Future of Community Banks.” Mr. Simpson mentioned that the idea 

behind this discussion came from the April 2016 Community Banking Conference in which four 

main themes emerged relevant to how millennials view banking. The first theme, Mr. Simpson 

explained, was the shift in focus on the generations and the differing banking needs, primarily 

the discussion was between baby boomers and millennials. The second theme was the differing 

styles of communication and related expectations of millennials. Mr. Simpson then explained 

that the third theme was the dynamic landscape of technology and its role in banking. The final 

theme, Mr. Simpson stated, concerned millennials in the workforce and attracting and retaining 

talent.

Mr. Simpson defined the term “millennial” as the population born between 1980 and 

2000. He went on to state that using the definition of being born from 1982 to 1998, the most 

recent full estimate available from the U.S. Census Bureau, identifies the millennial population at 

a little over 74 million as of July 2015 which is about 23 percent of the U.S. population and 

places them in the same category as baby boomers in terms of overall size. Mr. Simpson 

explained that not only is the sheer size important, but also the demographic is rapidly 

approaching a critical life stage where the youngest millennials are approaching financial 

independence and the older millennials are rapidly approaching their prime earning years. This, 

Mr. Simpson stated, makes millennials a target market. 

Mr. Simpson then explained what distinguishes millennials from prior generations. 

First, he pointed out that according to U.S. Census data, in 1975, three out of every four 30 year 

olds held a job, owned a home, and had started a family. By 2015, the share of 30 year olds that 

had tackled those same life events fell to just one in three. Mr. Simpson pointed out that is has 

been a significant change and according to a 2015 Pew Research Study, it is taking millennials a 

little bit longer to figure out a defined career path and longer to get married. 

Mr. Simpson reported that the Pew Study shows millennials have a tendency to live in 

city centers, be more educated or at least attain higher levels of education and save more than 

previous generations. He then stated that millennials have a tendency to be socially connected, 

having been raised on social networks and tend to care about social issues. Importantly, he

pointed out that millennials are more comfortable trying out new technologies. From this data, 

Mr. Simpson drew some key trends; first housing formation had been affected due to the delay in 

marriage, which affects the timing of the initial home purchase and subsequent home purchase. 

Second, urbanization, housing affordability and preference have pushed millennials into city 

centers. This is not only affecting home buying, but also car buying, i.e. the millennial living in 

the city is less likely to need to buy a car, and even less likely to buy multiple cars. Another 

trend is that increased education is leading to more student loans. Two thirds of bachelor degree 

recipients have outstanding student loans with an average debt of about $27,000. This compares 

to two decades ago where only half of recent graduates had college debt, and the average was 

around $15,000. Mr. Simpson explained that this affects affordability because this is part of 

household debt. Finally, Mr. Simpson pointed out that millennials are more apt to research, 
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identify, establish, and maintain relationships with businesses based solely off of their web or 

online experiences. This impacts the way that financial institutions do business with millennials. 

Thereafter the panel entertained questions such as how millennials use financial 

services, how they chose their bank (and what factors they use in choosing a bank) and whether 

the panel views their banking service needs changing rapidly or in a major way. The panel also 

discussed how they prefer to be communicated with by their financial institution and what 

factors they would consider in changing banks. 

Member Williams and several other Committee Members commented that it appeared 

that the community banks have an edge in that they provide an individual service relationship 

that is unique and differentiates them from the larger, mega banks. Thereafter there was a 

general discussion concerning the questions and issues presented by the panel. 

Chairman Gruenberg observed that the millennial panel all appeared to value 

technology and the ability to engage with an institution on a remote basis, as well as have real 

people at institutions they can call for assistance, if necessary. Chairman Gruenberg commented 

that he found this dichotomy interesting and encouraging, observing that smaller institutions can 

offer millennials basic services online as well as the value of having an actual contact at the 

bank. 

The Committee stood in recess at 10:31 A.M. and reconvened at 10:45 A.M. that same 

day. 

After the break, Ms. Ryan introduced the next panel discussion “Update on the FDIC’s 

Regulatory Review under the Economic Growth and Regulatory Paperwork Reduction Act 

(“EGRPRA”).” Ms. Ryan introduced Roberta McInerney, Deputy General Counsel in the Legal 

Division, and Ruth Amberg, Assistant General Counsel, in the Legal Division, who provided a 

general update on EGRPRA. Jim Watkins, Senior Deputy Director, RMS, and Bob Storch, 

Chief Accountant, provided a report on a number of initiatives currently under way. 

Ms. McInerney began by mentioning that the EGRPRA statute requires the FDIC, 

OCC, and Federal Reserve to review regulations at least once every ten years. The purpose of 

the review, Ms. McInerney went onto explain, is to identify any outdated or unnecessary 

regulations that affect insured depository institutions. Ms. McInerney reported that the last 

EGRPRA review was in 2006 and that the current review is on target to be completed by the end 

of this year. Ms. McInerney went on to explain that the agencies began the EGRPRA review in 

2014 by publishing the first in a series of four Federal Register notices that requested comments 

from bankers and other interested parties. The comment period for the fourth and final notice 

ended this past March. She stated that the four notices covered all regulations issued by the 

agencies through December 31, 2015, so as to allow comment on Dodd Frank regulations, as 

requested by bankers and others. Ms. McInerney explained that each regulation was organized 

according to 12 substantive categories, applications and reporting, powers and activities, 

international operations, banking operations, capital, Community Reinvestment Act, consumer 

protection, directors, officers, and employees, money laundering, rules of procedure, safety and 

soundness, and securities. Ms. McInerney noted that in addition to the Federal Register notices, 
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the agencies held six outreach events across the country in the West, the East, in the middle of 

the country, and with over 1,000 participants attending in person, by telephone, or via live stream

with the Kansas City outreach meeting specifically focused on rural and community bank issues.

Ms. McInerney then reported that the Agencies received over 250 written comment 

letters in response to the four (4) Federal Register notices. The Agencies are now in the process 

of analyzing the comments and plan to complete the final EGRPRA report by the end of this year 

and submit the report to Congress, as required under the statute. Ms. McInerney noted that the 

Agencies have already begun to take action in response to some of the comments received. Ms. 

McInerney then turned the discussion over to James Watkins to report on actions the FDIC has 

taken so far and is still in the process of taking, and also some of the comments received. 

Mr. Watkins began by touching on some of the regulatory burden reducing initiatives 

and actions taken or in the process of being taken. He explained that the FDIC has so far issued 

several financial institution letters relating to the deposit insurance application process to aid 

applicants in developing proposals for federal deposit insurance, and to enhance transparency of 

the application process. Mr. Watkins pointed out that the FDIC previously released a financial 

institution letter relating to applications which have significantly streamlined the requirements 

for applications to conduct permissible activities for certain bank subsidiaries organized as 

Limited Liability Companies or LLCs. 

Mr. Watkins next mentioned that the FDIC remains committed to working with groups 

interested in organizing community banks. To this end, Mr. Watkins explained, the FDIC is 

developing additional resource materials, as suggested by Director Doreen Eberley this morning, 

to guide applicants through the application process. 

Lastly, Mr. Watkins mentioned that upon authorization provided under the FAST Act, 

the banking agencies moved quickly to make an 18-month examination cycle available to more 

community financial institutions by increasing the eligibility threshold for qualifying institutions 

from $500 million in total assets to $1 billion in total assets. 

Mr. Watkins then turned the discussion over to FDIC Chief Accountant Robert Storch 

to discuss issues relating to call reports. Mr. Storch began by reporting that the FDIC and the 

other banking agencies are continuing to move forward with the FFIEC’s Community Bank Call 

Report Burden Reduction Initiative. One action area in particular, he stated, that the agencies are 

in the final stage is the implementation of an initial number of burden reducing changes to the 

call report. He pointed out that these burden reducing changes were issued as part of a proposal 

in September of 2015 and after considering the comments and the proposal, the FFIEC and the 

banking agencies recently finalized these provisions. Mr. Storch also indicated that drafts of the 

revised reporting forms and instructions for these changes were posted on the FFIEC's website in 

early July. Mr. Storch mentioned that bankers offered suggestions for streamlining the call 

report. He pointed out that the constructive banker feedback about call report burden and these 

options from the task force’s community banker outreach activities have helped the agencies 

develop a specific call report streamlining proposal for small institutions. Mr. Storch explained 

that this proposal is now being reviewed by senior leadership of the FFIEC’s member entities. 

Mr. Storch reported that the FFIEC and the agencies anticipate publishing this proposal within 
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the coming months and believe it should meaningfully expand the burden reducing changes to 

the call report well beyond those included in the September 2015 proposal.

The panel then took brief comments from the Committee. 

Ms. Ryan then introduced the panelists for “Update on Consumer Compliance Issues,” Jonathan 

Miller, Deputy Director, DCP, Luke Brown, Associate Director, DCP, and Faye Murphy,

Section Chief, DCP.

 Mr. Miller moderated the discussion and introduced Mr. Brown and Ms. Murphy to 

present on the new compliance ratings proposal.

 Mr. Brown began the presentation by reporting that on May 3, 2016, the member 

agencies of the FFIEC released a proposal for updating the interagency Consumer Compliance 

Rating System. He explained that the rating system is used by examiners to evaluate financial 

institutions’ adherence to consumer compliance laws and regulations, the main purpose of the 

rating system is to ensure that institutions are evaluated by the FFIEC agencies in a 

comprehensive and consistent manner. Mr. Brown went on to explain that the goal is to ensure 

that supervisory resources are appropriately focused on areas that exhibit risk and on institutions 

that warrant elevated supervisory attention. 

 Ms. Murphy then provided a summary of the proposal. She explained that the proposal 

retains the current five scale framework for the Consumer Compliance Rating System. She went 

on to explain that the proposed rating system reflects risk based expectations commensurate with 

the size, complexity, and risk profile of institutions and provides incentives for institutions to 

prevent, self-identify, and address compliance issues. Ms. Murphy stated, each institution would 

be assigned a consumer compliance rating based primarily on the adequacy of its compliance 

management system which is designed to ensure compliance on a continuing basis. Ms. Murphy 

stated that the agencies are proposing a rating system that includes three categories of assessment 

factors, board and management oversight, compliance program, and violations of laws and 

consumer harm.

 Ms. Murphy explained that when assigning a rating under the proposed rating system, 

the examiners will consider each of the assessment factors in each category; there are a total of 

12. She went on to explain that the three categories allow examiners to distinguish between 

varying levels of supervisory concern when rating institutions for compliance with federal 

consumer protection laws. Ms. Murphy then mentioned that the consumer compliance rating is 

intended to reflect a comprehensive evaluation of the institution’s performance. It is not based 

on a numeric average or any other quantitative calculation. Specific numeric ratings will not be 

assigned to any of the twelve assessment factors.

 It is important to stress that all institutions, regardless of size, should maintain an 

effective CMS. The sophistication and formality of the CMS typically will increase 

commensurate with the size, complexity, and risk profile of the entity. It is also important to 

note that the articulation of CMS assessment factors is not intended to create new expectations 

for lower risk institutions. Ms. Murphy next described the rating system categories and the 
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assessment factors. She explained that the first category of the proposed rating system, board 

and management oversight will be used to analyze the institution’s CMS and the role of its board 

and management officials. The four assessment factors in this category would be oversight and 

commitment, which will measure the institution’s compliance risk management program; 

change management which will measure the effectiveness of the institution’s change 

management processes, including responding timely and satisfactorily to any variety of change, 

internal or external, to the institution; comprehension, identification and management of risk

that arises from the institution’s products, services, or activities and corrective action and selfidentification which considers any corrective action undertaken as consumer compliance issues 

are identified. She reminded the Committee that Compliance expectations contained within this 

category extends to third-party relationships into which the financial institution has entered. 

Examiners should evaluate activities conducted through third-party relationships as though the 

activities were performed by the institution itself. She also reminded the Committee that the 

Agencies believe the above factors would provide examiners with an effective and consistent 

framework for evaluating whether or not board and management are engaged to a satisfactory 

degree at a particular institution. All institutions, regardless of size, should maintain an effective 

CMS. However, each institution should be evaluated based on its size, complexity and risk 

profile and that

Ms. Murphy explained that the second category, compliance program, would be used to 

analyze other elements of an effective CMS. Ms. Murphy stated that the assessment factors for a 

compliance program are whether the policies and procedures are appropriate to the risk in the 

products, services, and activities of the institution; next is training which is where the degree to 

which compliance training is current and tailored to risk and staff responsibilities is evaluated; 

the next factor is to evaluate the institution’s sufficiency of monitoring and/or audit; finally, Ms. 

Murphy discussed consumer complaint response where the responsiveness and effectiveness of 

the consumer complaint resolution process is evaluated. Additionally, Ms. Murphy added, 

examiners review a financial institution’s management of third party relationships and services 

as part of its overall compliance program. In addition, Ms. Murphy indicated that the Agencies 

believe these factors, along with Board and Management Oversight would provide an effective 

and consistent framework to evaluate an institution’s CMS. Each of these assessment factors 

would be considered in evaluating risk and assigning a consumer compliance rating. As 

explained above, each institution would be evaluated based on its size, complexity and risk 

profile.

 Ms. Murphy next discussed the third category, violations of law and consumer 

harm. This, Ms. Murphy added, will provide examiners with a framework for considering the 

broad range of violations of consumer protection laws and evidence of consumer harm. Ms. 

Murphy pointed out that consumer harm may occur as a result of a violation of law; and while 

many instances of consumer harm can be quantified as a dollar amount associated with financial 

loss, such as charging higher fees for a product than was initially disclosed, consumer harm may 

also result from a denial of an opportunity. In this way, Ms. Murphy stated, in conjunction with 

assessing an institution’s CMS, based on the first two categories, examiners will evaluate the 

consumer protection violations, if any, and related consumer harm, based on the following four 

assessment factors; The root cause assessment factor analyzes the degree to which weaknesses 

in the CMS gave rise to the violations, the severity assessment factor weighs the type of 
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consumer harm, if any, that resulted from violations of law, the duration assessment factor 

describes the length of time over which violations occurred, and the pervasiveness assessment 

factor evaluates the extent of the violations and resulting consumer harm, if any. Ms. Murphy 

indicated that examiners are directed to consider all violations of consumer law, based on the 

root cause severity, duration and pervasiveness of the violation. In this way, Ms. Murphy said, 

the approach emphasizes the importance of a range of consumer protection laws and is intended 

to reflect a broad array of risks in the market and the potential harm caused by consumer 

protection related violations.

 

 Mr. Miller then opened the panel up to comments and questions from the Committee. 

 Member Bryant asked for clarification regarding self-identification; he asked when 

there is a safety and soundness examination, would the examiners be able to look at the Board 

minutes for compliance issues and that it was properly identified and corrective action 

taken? Mr. Brown responded by stating that there are a number of ways compliance issues can 

be identified whether through monitoring or audit, if an issue is identified and resolved, that is 

something that the examiners would like to see when they come in for a formal 

examination. Mr. Brown went on to state that there is no express mention of self-identification 

in the current rating system, so the idea was to include it in the proposal so that banks could 

receive credit when they self-identify appropriately. Mr. Miller added that active participation 

and oversight of the Board is included in the new rating system and pointed to the chart on page 

24 of the proposal. 

Member Williams asked for clarification on the component ratings and the overall 

ratings. Mr. Brown clarified that the new rating system has an overall rating, but the examiners 

will still consistently think through the 12 components. 

Member Haskin commented that there have been waves and waves of new consumer 

regulations put upon the banks and some have not had very large windows to train and educate, 

and even to acquire software to be prepared. In this instance, Mrs. Haskin stated that she hoped 

that the examiners would be mindful of the time involved to train and educate on the new 

regulations, especially the mortgage rules. Members Williams and Blankenship also voiced 

concern on this issue. Mr. Miller responded that examiners would look for efforts by the banks 

to actively get into compliance, 

Member Haskin commented that the reference material for lenders to use is complicated

and not user friendly. Mr. Miller responded by stating that this is a helpful comment and that it 

would be passed along. 

Member Lundy suggested that a common road map be developed that takes into 

account the various States have differing laws concerning joint property ownership. 

Mr. Miller then provided a summary update of developments regarding the Community 

Reinvestment Act (CRA). He indicated that last week the FDIC released a second set of CRA 

questions and answers which provide additional guidance in a number of areas including 

availability and effectiveness of retail banking services and innovative and flexible lending 
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practices. Two areas in particular that Mr. Miller pointed out are a bank’s investment in 

broadband infrastructure, (the whole community including low and moderate income segments)

and energy efficiency. In this way, Mr. Miller commented, if it is a small community and the 

bank is providing access to the whole community, then the bank would receive credit. 

The Committee stood in recess at 11:40 A.M. and reconvened at 1:09 P.M. that same 

day.

After the break, Ms. Ryan introduced Doreen Eberley, Director, RMS, James Watkins, 

Senior Deputy Director, RMS, Rae-Ann Miller, Associate Director, RMS, Mark Pearce, 

Director, DCP, and Jonathan Miller, Deputy Director, DCP, to give a presentation entitled 

“Fintech Developments.” 

Mr. Watkins began the discussion by indicating that the FDIC has formed a Fintech 

Steering Committee (“FSC”) comprised of FDIC executives from supervision, as well as the 

insurance and research areas. It also includes representation from our Office of Corporate Risk 

Management and the Legal Division. Basically, Mr. Watkins explained, the purpose of the 

Committee is to gain an understanding and monitor fintech activities, developments, and trends, 

evaluate the impact on stakeholders, banking, and the deposit insurance structure which includes 

supervision, oversight, economic inclusion, and consumer protection. Mr. Watkins also noted 

that the FDIC has internal working groups that are actively researching and gaining an 

understanding and insights into the fintech area related to banking. Mr. Watkins then turned 

the program over to Ms. Miller.

Ms. Miller began her presentation by quoting the definition of the term “fintech” from 

the Financial Stability Oversight Council as “the use of technology in an attempt to make 

financial services more efficient.” Ms. Miller explained that in some respects, fintech is viewed 

as having the potential to expand existing financial services and in other respects fintech is 

attempting to improve efficiencies in the back office space. Ms. Miller then went on to expand 

on the dimensions of fintech. In this regard, she explained, there are fintech companies and 

processes that develop credit products related to marketplace lending, there are companies that 

specialize in offering deposit accounts without brick and mortar, there are companies, mostly 

partnering with banks, at this point, that just offer deposit-gathering services. Then Ms. Miller

explained that within the payment sphere, there are a number of person-to-person payment 

systems, international payment transfer and currency exchanges and in terms of investment 

management and personal finance, there are companies and applications that aggregate accounts. 

Ms. Miller further explained that there are investment allocation packages and high frequency 

trading. Then the back office processing covers things like distributed ledger technology and 

smart contracts. She said that under capital markets, we look at companies and services that 

facilitate, trading, settlement and even security valuation services. 

Ms. Miller then explained the basic benefit of fintech which essentially is that 

technological innovation tends to promise speed, cost reduction and a better customer 

experience. Additionally, Ms. Miller added that fintech can increase access to the banking 

system with deposit and credit products. 
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Ms. Miller then turned the program over to Jonathan Miller.

Mr. Miller began by discussing some of the challenges and risks posed by fintech. He

explained that when banks enter into any new product, service or third party relationship, 

whether fintech or any other area, they need to identify and understand the associated risks and 

then manage and mitigate those risks. In this way, depending on the activities and business 

model of the fintech company, Mr. Miller explained, risks presented by fintech are similar to 

those faced by banks but there may be heightened risks. Mr. Miller provided an example of a 

technology-focused service, there will be cyber issues, and in the IT area, reliance on the 

technology may be a particular risk to be aware of. Mr. Miller also indicated that since some of 

the firms rely very heavily on sophisticated models, such as underwriting models, and they so far 

have been untested under stress conditions, they may, if not properly monitored, pose fair 

lending risk.

Other challenges, Mr. Miller explained, include disintermediation, or disruption, as he 

called it, of traditional banks and their service providers and changes in capital markets 

processing, given market breadth and the size and number of the participants that could be 

affected.

Mr. Miller next mentioned ongoing efforts by the FDIC to follow the developments in 

fintech. In this regard, Mr. Miller discussed FDIC steering groups including two interdivisional 

working groups, split between wholesale and the retail aspects of fintech.

The wholesale aspect focuses on repos, derivatives, clearing, central counterparties and credit; 

monitors distributed ledger technology, smart contracts, as well as the development of virtual 

and alternative currencies. The retail group focuses on consumer and small business aspects of 

fintech, follows trends in marketplace lending; alternative scoring systems and mobile and 

virtual deposit services, account aggregators and person-to-person payments.

Mr. Miller also mentioned that the FDIC has frequent interactions with interested 

stakeholders, for example companies that offer fintech products and services, and attend and 

participate in conferences. These meetings, Mr. Miller reported, are an important source of 

information.

Mr. Miller next discussed the various ways, on an ongoing basis that the FDIC monitors 

and responds to innovation. One of the principal areas the FDIC has been working on is 

increasing access to mainstream financial services and much of this involves technological 

innovation. Mr. Miller pointed to the work done through the Advisory Committee on Economic 

Inclusion or ComE-IN. The focus, Mr. Miller explained, is on the use of mobile financial 

technology to increase access. Mr. Miller also mentioned the Alliance for Economic Inclusion 

and Bank-On movement as another effort to involve the unbanked and underbanked into 

mainstream financial services and the use of technology to achieve that goal. Finally, Mr. 

Miller pointed out that the FDIC monitors and addresses issues related to fintech through the 

examination process. Mr. Miller then concluded the presentation and welcomed questions and 

comments from the Committee. 
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Member Seleski asked whether there has been thought about non-bank entities entering 

and eroding community bank’s traditional profit areas. 

Mr. Pearce responded by stating that the FDIC has been monitoring that issue and has 

seen some non-bank fintech companies coming in and attempting to disrupt what has been a 

traditional banking process such as remittance or wire transfers. Mr. Pearce did agree that this 

does pose a risk of putting pressure on revenue at certain banks that are relying on those services.

Member Blankenship mentioned the importance of focusing on the end liability of 

community banks; in this way, payments and the way money is transferred around, eventually it 

will end up at a bank. In this regard, she mentioned that the end liability of banks is something 

that the Committee should look at. 

Member Haskin pointed out the area of online accounting is a challenging one for banks 

that are regulated and it would be helpful if there were clear definitions on how a bank can go 

about those processes within the regulations. He mentioned that it would be helpful for 

community banks and their regulators to work together to establish a clear method and requested 

the FDIC explore this issue more. 

Member Castillo made the observation that managing third party technology risk will 

continue to be a large issue going forward. Mr. Pearce responded by pointing to FDIC guidance 

on third party relationships and the management factors and despite the evolution of technology, 

the principles in this guidance still remain; risk appetite, and performing due diligence of the 

firm and the monitoring of the firm and the structure of contracts to be effective in managing that 

risk. This, Mr. Pearce explained, remains consistent with long standing FDIC guidance. 

Member Castillo mentioned that he felt the guidance is really excellent.

Chairman Gruenberg then asked each member of the Committee if they could comment 

on the extent to which their institution is committed to fintech and provide a spectrum of 

concerns and/or benefits to fintech. 

Member Tolomer commented that his institution had a full array of electronic services;

online banking, business online banking, consumer online banking and mobile. So, he reported 

that his institution is offering pretty much what all the banks are offering, large and small, to 

small and medium sized businesses and the consumer. In terms of concerns, Member Tolomer 

was not concerned with third party lending. In terms of payment systems, Member Tolomer 

continued, it would be important to remain true to the particular banking model and continue 

doing what you're doing and recognize that there's plenty of competition every which way, 

whether it's a traditional bank or it's one of these fintechs.

Member Scully commented that the payment system front end worries her the most 

from a competitive standpoint. She also commented that her bank is investigating online 

accounting and feels optimistic about opportunities in internal processing. Member Scully 

indicated that her bank has a task force of loan officers looking into fintech with the purpose of 

monitoring risk.
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Member Lundy mentioned that the most effective tool his bank uses is deposit capture

and they are going through a core processor of conversion now. He commented as to risks and 

that his bank spends significant time with BSA and the compliance risks.

Member Castillo mentioned that his bank has most if not all of the fintech services used 

by the other banks represented on the Committee and that they were of great benefit to his 

institution over the last ten years. On the concern side, Member Castillo mentioned that the 

biggest challenge -- whether on the loan side or the deposit side -- is trying to eliminate some of 

the friction points that Member Haskin earlier spoke about. So, Member Castillo indicated that 

one of the biggest challenges is making that experience online close to (or as good as it is) when 

they talk to the person. 

Member Williams agreed with Member Castillo and the comments made by the other 

Committee members. He felt P2P is going to get bigger. On the deposit side, Member 

Williams stated that his bank has the technology to be competitive. 

Member Haskin mentioned in relation to her bank’s technology framework, her bank 

keeps two areas of focus, mobile and real time payments. Member Haskin also mentioned that 

the use of technology has shrunk her bank’s employee base, so that her bank, when it was half 

the size it is now, had over 100 employees; currently the bank is twice the size, and has 37 full 

time employees. This, Member Haskin pointed out, demonstrates the impact of technology on 

banking. Member Haskin mentioned that her bank is also struggling with the “friction points” 

mentioned by the other Committee members, but reminded that any bank is only going to be as 

good as its core processor and their technology. In this regard, Member Haskin pointed out that 

because there are four and five year contracts it requires planning four and five years into the 

future to know exactly how the bank is going to get to the end goal. Member Haskin also 

mentioned that she felt real time is going to be important to millennials.

Member Williams indicated agreement with the comments made by the previous 

Committee members. He mentioned that one of his bank’s bigger concerns was a general 

lessening of the amount of non-interest income that could be brought in. For example, Member 

Williams explained, that his bank has a secondary market in mortgage loans which customers are 

now more apt to go online to get those. Member Williams stated that his bank moved into a 

new line of business (credit cards) to offset the revenue loss that will come due to technology 

changes. 

Member Bryant mentioned that his bank is different in that they do not offer transaction 

accounts. Member Bryant stated, in the last couple years, has his bank started offering online 

banking. Member Bryant indicated that his bank also looked at acquiring institutions that will 

give access to transaction accounts. That being said, Member Bryant did say that he would be 

exploring ways that he could grow his institution, by looking at non- traditional sources.

Member Blankenship stated that her bank offers most of the fintech services that are 

readily available, but clarified that her bank is in a metropolitan area. She indicated that the bank 

has found that there is not any one sector of the population that is more accepting of new 

technology. Member Blankenship mentioned that with technology, the biggest question is risk 
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versus reward; where is the bank’s risk tolerance, and how much of that is the bank going to be 

forced into taking to stay relevant in the market? Other areas of concern involve the use of 

social media and marketing. 

Member Thompson mentioned that her bank fairly offers all the same products as the 

other members of the Committee. The big challenge for her bank, Member Thompson said, is 

whether there is enough monitoring going on. So despite cutting down the number of available 

employees, the bank still is expected to monitor and measure whatever it is that the bank is 

putting out there, not only for regulatory purposes, but for internal purposes as well. 

Member Emmons finished up the roundtable by indicating that he generally agreed with 

the comments made by the other Committee members. He went on to point out that all of those 

deposits and transactions bypass the banking system, and the banking community is left with a 

real strategic challenge. Member Emmons opined that in the current environment, community 

banks need to make sure that they are on top of all of the changes that are coming technology 

wise. What is concerning, Member Emmons went on, is the pace of change and the fact that 

change is coming quickly and there are going to be many options in the P2P space. He 

explained that the challenge will come from the pressure on the bank to stay on top of the 

payment system model that the customers want in the face of rapidly changing and evolving 

technology. He added that another area of technology development is business to business or 

the commercial side of the banking business. Member Emmons pointed out that cash 

management systems and the way a bank delivers services and the treasury functions with the 

businesses still can be customized, still can be priced, and still makes a difference. In this way, 

Member Emmons explained, the bank can build relationships on the business to business side of 

payments, and it becomes very similar to what is currently happening on the retail side (person to 

person).

Chairman Gruenberg then thanked the Committee members for their input and 

suggestions. 

Ms. Ryan then introduced the next panel “Recent Supervisory Developments.” Joining 

Director Eberley and Associate Director Miller are Deputy Director Mark Moylan and Chief 

Accountant Robert Storch. The focus of this panel, Ms. Ryan explained, is on recent 

supervisory developments, including a new work program for examiners called InTREx, and 

FASB's new CECL accounting standard. 

Ms. Eberley began by introducing Mark Moylan to discuss the FDIC’s new IT 

examination program, InTrex.

Mr. Moylan began by introducing the InTrREx program. He explained, the InTREx or 

Information Technology Risk Examination Program, is an enhancement of the existing FDIC IT 

examination work program. Mr. Moylan stated that the regulatory requirements surrounding a 

bank establishing an appropriate information security program are nothing new; however, the 

parameters set forth have lacked the recognition of cyber risk. Mr. Moylan explained that 

nTREx now specifically recognizes the emergence of the cyber risk element and better aligns 

and defines regulatory expectations in the assessment of a bank’s information security program 
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and the identification and mitigation of this new risk. He went on to explain that InTREx 

introduces three areas of change, pre examination procedures, changes to the format and 

structure of the examination work program, and new examination findings procedures; all of 

these changes are made to affect better risk scoping, enhance the examination process, and 

increase transparency, as well as board awareness.

First, Mr. Moylan discussed the pre exam procedural changes. The IT questionnaire has 

been replaced by the IT profile document which has 65 percent fewer questions for bank officials 

to answer and is better focused. Bank officials will now receive the document and have 

approximately two weeks to complete and submit it to the FDIC. Mr. Moylan explained that the 

two week preparation time, along with more effective questions, will provide the examiners with 

better information to risk focus the examination and appropriately staff the examination 

commensurate with the risk profile of the institution. 

Next Mr. Moylan discussed the work program and went through the module with the 

Committee. Mr. Moylan explained that the module represents the framework that the examiners 

will go through; in this way, the work program modules now directly correspond to each of the 

Uniform Rating Systems for Information Technology (“URSIT ratings”), and provides 

examination staff with specific decision factors and analysis procedures, including basic and 

expanded procedures. Mr. Moylan indicated that the new program will provide better examiner 

guidance, a more consistent examination approach, and better support for the conclusions drawn. 

One of the other points, Mr. Moylan stated, was that the new program provides better 

transparency in that it discloses the entire URSIT rating. Historically, Mr. Moylan explained, the 

FDIC has only been disclosing the IT composite rating, going forward the FDIC will now be 

disclosing all of the components. This, Mr. Moylan explained, will allow the bank board to 

better understand and be more attuned to the recommendations. 

Mr. Moylan next explained that the ECC page will still give a summary comment 

regarding the IT overall examination findings but there will now be an information technology 

assessment page and this is mandatory. This page, Mr. Moylan explained, will have a 

discussion of each of the components and the rating and also a summary comment on the bank’s 

cybersecurity preparedness. Mr. Moylan indicated that this will provide transparency of not 

only he components, but also the examiner opinion of the bank’s cyber preparedness. 

Mr. Moylan also welcomed feedback on how the program works going forward. 

Ms. Miller then reported that on June 30th her group issued a FIL on an updated set of 

brokered deposit Frequently Asked Questions (“FAQs”). Ms. Miller indicated that the FDIC 

originally issued the broker deposit FAQs in January of 2015 with the intention of providing

plain language information about categorizing brokered deposits all in one place. The FAQs, 

she explained, are based on the statute and on a regulation, but also on explanations of the 

requirements that the FDIC provided to the industry through advisory opinions from time to 

time. 

Ms. Miller next mentioned that pursuant to Section 956 of the Dodd Frank Act, the 

FDIC issued a notice of proposed rulemaking (NPR) on April 26th regarding incentive 
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compensation. Ms. Miller explained that Section 956 requires six agencies (the FDIC, OCC, 

Federal Reserve, NCUA, SEC and FHFA) to jointly prescribe either guidance or rules that 

prohibit any type of incentive-based compensation arrangements or any feature of those 

arrangements that the agencies determine encourage inappropriate risks by a covered financial 

institution. She went on to explain that Section 956 requires that financial institutions disclose to 

the appropriate Federal regulator the structure of incentive-based compensation arrangements 

sufficient to determine whether that structure provides excessive compensation that could lead to 

material loss to the institution. Ms. Miller stated that Section 956 applies to incentive-based 

compensation arrangements offered by covered financial institutions, which are defined as 

insured depository institutions, depository institution holding companies, credit unions, broker 

dealers, investment advisors, Fannie Mae, Freddie Mac, and other institutions that the agencies 

jointly determine should be covered by the rule. She went on to explain that within those 

covered companies, those over $1 billion are covered and thus any institutions that are less than 

$1 billion are exempt from the rule. Further, she explained, the NPR uses a tiered approach with 

respect to its requirements, so Level 1 are institutions $250 billion or more; Level 2 is $50 billion 

to $250 billion, and Level 3 is $1 billion to $50 billion. Ms. Miller stated that all covered 

institutions would be subject to a set of basically programmatic elements, policies, procedures, 

and recordkeeping type of requirements; then as the institutions get larger they would be subject 

to more stringent provisions.

Member Scully asked whether the NPR could be restructured to make it easier to 

understand for those banks that are at Level 3. Member Scully explained that due to the length 

of the NPR (some 600 pages) it was challenging to locate the sections that applied to the Level 3 

banks. 

Ms. Miller indicated that the FDIC would take that into consideration. She reminded 

the Committee that the FDIC is currently taking comments as it moves through the process. 

Mr. Storch then provided an update on activity at the Financial Accounting Standards 

Board (“FASB”). Recently, Mr. Storch reported, FASB issued an Accounting Standards Update 

(“ASU”), on the measurement of credit losses on financial instruments, which represents several 

years’ work by the FASB to improve the accounting for credit losses. The ASU, Mr. Storch 

explained, formally introduces the Current Expected Credit Losses (“CECL”) methodology for 

estimating allowances for credit losses and will replace today’s incurred loss methodology when 

the new standard takes effect. Mr. Storch stated that the new standard can be downloaded from 

the FASB’s website. 

Mr. Storch explained that the allowance for credit losses under CECL is a valuation 

account measured as the difference between the amortized cost basis of financial assets and the 

net amount you actually expect to collect on those assets. In other words, he said, the allowance 

is an estimate of lifetime credit losses for however long those assets will remain on the bank’s 

balance sheet. Further, Mr. Storch explained, the CECL methodology applies to all financial 

assets carried at amortized cost, including loans or investments, traditional loan portfolios, held

to maturity securities, off balance sheet exposure such as loan commitments, and standby letters 

of credit. He added that the new CECL standard also updates the measurement of credit losses 

for available-for-sale debt securities. Mr. Storch stated that to estimate expected credit losses 
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July 20, 2016

under the CECL methodology, institutions will use a broader range of data than other existing 

generally accepted accounting principles, or GAAP accounting; including information about 

past events, current conditions, and reasonable and supportable forecasts relevant to assessing 

collectability of cash flows on financial assets. In contrast, Mr. Storch explained, under today’s 

incurred loss methodology, only past events and current conditions can be considered when 

estimating credit losses. 

Mr. Storch then set forth some differences between today’s incurred loss methodology 

and the coming CECL methodology. He explained that the FASB strived to ensure that the new 

accounting standard will be scalable to institutions of all sizes and does not expect smaller and 

less complex institutions will need to implement costly and complex modeling techniques. 

Further, Mr. Storch explained, institutions should be able to modify their existing allowance 

methodologies to meet the newer accounting standards; in so doing, institutions will, however, 

need to change certain of the inputs and assumptions they use to achieve an estimate of lifetime 

credit losses. Mr. Storch stated that acceptable estimation methods under the CECL 

methodology that are identified in the standard include loss rate methods, world rate and 

migration methods, discounting cash flows, probability of default and loss given default methods

and the new standard explicitly states that institutions are not required to use a discounted cash 

flow methodology to estimate expected credit losses. Mr. Storch explained that because the 

ASU doesn’t specify a single method for measuring expected credit losses, the standard allows 

institutions to use judgment to determine the relevant information and estimation methods that 

are appropriate in their individual circumstances; in addition, an institution may apply different 

estimation methods to different groups of financial assets. 

Mr. Storch reported that FASB has provided significant lead time for institutions to 

prepare for their implementation of the CECL methodology until the new accounting standard 

takes effect and at the same time they provided the agencies with significant lead time to prepare. 

Mr. Storch explained that for those institutions that, for accounting purposes, are deemed SEC 

filers, the new standard will take effect in 2020. All other institutions will begin reporting under 

the CECL methodology either in their first quarter of 2021, or as they end fiscal '21, depending 

on an institution's characteristics.

Mr. Storch advised that in the joint statement, the agencies encouraged institutions to 

start their planning and preparation for the new accounting standard now, including becoming 

familiar with the new standard. In this regard, Mr. Storch recommended that bank directors 

begin now obtaining a basic understanding of the new standard, since it will change the metrics 

the bank looks at. Finally, Mr. Storch stated that both during and after the transition to the 

CECL methodology, the FDIC’s goal is to ensure consistent and timely communication to 

institutions about the new standard and to develop and issue updated supervisory guidance 

pertaining to the standard, particularly with respect to smaller and less complex institutions.

Mr. Storch then opened the discussion up to questions and comments from the 

Committee.

Member Williams asked about the FDIC’s role moving forward toward implementation. 

Mr. Storch responded that FDIC accounting policy staff have been discussing what sort of 
(

I

401

expectations examiners should have and that these questions are on the list of what the FDIC

would expect to be communicating to banks. He suggested that it might be advisable for banks

to perform some dry runs in advance of when implementation finally takes effect and noted that

the FDIC will have a good level of examiner preparation so'they understand, as well.

Member Castillo asked whether FASB or the FDIC has modeled what they think an

allowance might look like under the CECL method.

Mr. Storch responded that there has been some modeling to assess what the potential

impact would be. Mr. Storch went on to explain several different scenarios relating to modeling

loss allowances.

Member Lundy made an observation that there has been significant margin pressure

over the last five years and bankers and regulators, based on (his bank's) historical experience,

have been rightly concerned abolit interest rate risk. '

There was then a discussion among Committee members and the Panel concerning

some of the specific points of application concerning the CECL method.

Chairman Gruenberg then thanked the Committee members in general and specifically

thanked those Committee members who were leaving due to the expiration of their terms.

There being no further business, the meeting was adjourned at 2:49 p.m.

Robert

#K

E. Feldman

Executive Secretary

Federal Deposit Insurance Corporation

And Committee Management Officer

FDIC Advisory Committee on Community Banking

July 20, 2016
,Minutes

of the

Meeting of the FDIC Advisory Committee on Community Banking

of the

Federal Deposit Insurance Corporation

Held in the Board Room

Federal Deposit Insurance Corporation Building

Washington, D.C.

Open to Public Observation

July 20, 2016 - 9:00 A.M.

I hereby certify that, to the best of my knowledge, the attached minutes are accurate and

complete.

~J.~ Martin J. Gruenbe

Chairman

Board of Directors

Federal Deposit Insurance Corporation