34 

The Meeting of the Advisory Committee of State Regulators 

of the 

Federal Deposit Insurance Corporation 

Federal Deposit Insurance Corporation Building 

Washington, D.C. 

Open to Public Observation 

October 18, 2023 – 1:00 P.M. 

The meeting of the Federal Deposit Insurance Corporation 

(FDIC) Advisory Committee of State Regulators (Committee) was 

called to order by Martin J. Gruenberg, Chairman, FDIC Board of 

Directors (FDIC Board). 

Committee members in attendance: Kevin R. Allard, 

Superintendent, Division of Financial Institutions, State of 

Ohio; Charles G. Cooper, Commissioner, Department of Banking, 

State of Texas; James M. Cooper, President and CEO, Conference 

of State Bank Supervisors, Washington, D.C.; Mary L. Gallagher, 

Commissioner of Banks, Commonwealth of Massachusetts; Greg 

Gonzales, Commissioner, Department of Financial Institutions, 

State of Tennessee; Kevin B. Hagler, Commissioner, Department of 

Banking and Finance, State of Georgia; Melanie G. Hall, 

Commissioner, Division of Banking and Financial Institutions, 

State of Montana; Dawn E. Holstein, Commissioner of Banking, 

Division of Financial Institutions, State of West Virginia; I. 

Lise Kruse, Commissioner, Department of Financial Institutions, 

State of North Dakota; Antonio P. Salazar, Commissioner, Office 

of the Commissioner of Financial Regulation, State of Maryland; 

and Mick Thompson, Commissioner, Banking Department, State of 

Oklahoma. 
Bret Afdahl, Director, Division of Banking, State of South 

Dakota; and Thomas C. Fite, Director, Department of Financial 

Institutions, State of Indiana, were absent from the meeting. 

Travis J. Hill, Vice Chairman, and Jonathan P. McKernan, 

Director, of the FDIC Board, also attended the meeting. 

FDIC and FDIC contractor staff in attendance: Lisa D. 

Arquette, Daniel H. Bendler, Luke H. Brown, Suzanne L. Clair, 

Kymberly K. Copa, Debra A. Decker, Doreen R. Eberley, Sheila R. 

Finlayson, G. Chris Finnegan, Fasil Getachew, Shannon N. Greco, 

Mark L. Handzlik, Sean M. Healey, Nicholas S. Kazmerski, Thomas 

F. Lyons, Brandon Milhorn, Krishna K. Patel, Mark E. Pearce, 

Nikita Pearson, Ariana L. Rambuyan, Lisa K. Roy, Betty J. 

Rudolph, Camille C. Schmidt, Michael Shaheen, and Clarisse A. 

Young. 

FDIC Chairman Martin J. Gruenberg opened the meeting and 

presided over the proceedings. Doreen R. Eberley, Director, 

Division of Risk Management Supervision (RMS), and the 

Committee’s Designated Federal Officer, moderated the 

proceedings. 

35 

Introductory Remarks 

Chairman Gruenberg welcomed members to the meeting, 

remarking briefly on the banking industry and economy and that 

he was looking forward to receiving the Committee’s feedback on 

the agenda topics. He recognized FDIC Vice Chairman Travis 

Hill, who thanked the members, expressing that he too was 

looking forward to the discussions. The Chairman also 

acknowledged FDIC Board Member Jonathan McKernan. 

Chairman Gruenberg then turned the meeting over to Ms. 

Eberley to moderate the meeting. 

 Ms. Eberley provided an overview of the agenda and 

introduced the FDIC staff presenters and panelists for each 

discussion item. 

October 18, 2023 
Economic and Banking Conditions Discussion 

Ms. Eberley introduced the first panel. Camille Schmidt, 

Section Chief, RMS, and Krishna Patel, Section Chief, Division 

of Insurance and Research, provided briefings on the economic 

and banking conditions with particular emphasis on the economy 

and rising interest rates, funding and interest rate risk, and 

credit risk. Following the presentation, panelists invited 

members to comment and discuss any additional risks they have 

observed. 

 Commissioner Hagler opened the discussion by expressing 

concerns about commercial real estate (CRE) concentrations. 

Superintendent Allard also discussed CRE concentrations, 

particularly office buildings. He stated that he hoped banks 

were better prepared for this cycle given the conversations with 

bankers during the previous crisis, which focused on the 

importance of concentration risk management. Ms. Eberley added 

that there has been general improvement in risk management 

practices over time. 

Commissioner Kruse mentioned the impact of products and 

services offered by nonbanks, such as mortgage lending, on the 

banking system. She discussed the importance of credential 

standards. Several members added that cyber risks are also 

concerning. Commissioner Holstein then asked about banker 

concerns regarding the Bank Term Funding Program. Ms. Eberley 

responded that the FDIC has heard remarks from bankers and has 

emphasized that from a regulatory standpoint, there is no stigma 

to using the Bank Term Funding Program or the discount window. 

Ms. Eberley thanked the members and staff for the 

discussion. 

36 

2022 Financial Institution Diversity Self-Assessments 

Nikita Pearson, Deputy to the Chairman for External Affairs 

and the Director of the Office of Minority and Women Inclusion, 

provided a briefing on the FDIC’s 2022 Financial Institution 

Diversity Self-Assessments. She explained that the selfassessment is a confidential questionnaire on diversity, 

distributed by the FDIC to its supervised financial 
on Prudent Commercial Real Estate Loan Accommodations and 

Workouts, issued on June 29, 2023.

37 

institutions, in accordance with Section 342 of the Dodd-Frank 

Wall Street Reform and Consumer Protection Act of 2010. The 

purpose of the self-assessment is to help financial institutions 

assess their diversity practices and establish diversity 

programs. Ms. Pearson said that self-assessments would not only 

benefit the financial institutions, but also their surrounding 

communities. She noted that completion of the self-assessment 

is voluntary and is not included or considered in a bank’s 

safety and soundness or compliance examinations or Community 

Reinvestment Act performance evaluation. Ms. Pearson concluded 

by asking the state regulators to direct any questions they may 

receive from their examiners or their banks on the selfassessment to the FDIC. Members followed up by asking questions 

about practices for promoting diversity and the availability of 

a state breakdown of banks that completed the self-assessment. 

Ms. Eberley thanked Ms. Pearson for the presentation. 

State-Federal Coordination 

Ms. Eberley along with, G. Chris Finnegan, Senior Deputy 

Director of the Division of Depositor and Consumer Protection 

(DCP); Suzanne Clair, Associate Director, RMS; Thomas Lyons, 

Associate Director, RMS; and Luke Brown, Associate Director, 

DCP, provided updates various risk management and consumer 

protection matters. 

Ms. Clair began this presentation, expounding on the 

information shared earlier by Ms. Patel and Ms. Schmidt on 

economic conditions, rising interest rates and funding and 

liquidity risk management. She also briefed the committee on 

updates regarding the Interagency Policy Statement on Funding 

and Liquidity Risk Management on the Importance of Contingency 

Funding Plans. 

Next, Mr. Lyons provided an update on the Policy Statement 

October 18, 2023 
38 

Then, Messrs. Brown and Lyons reported on the updated 

Interagency Guidance on Third-Party Relationships: Risk 

Management, issued on June 6, 2023. 

Ms. Eberley and Mr. Finnegan wrapped up the presentations 

by commenting on the FDIC’s return to banks and how it has 

progressed over the past year. Ms. Eberley also discussed 

training the FDIC has provided to state examiners. 

General Discussion 

Ms. Eberley then opened the floor for a general discussion 

of the covered topics. 

Several members concurred that hybrid examinations are 

receiving positive feedback from bankers and that they are 

working out well for all parties involved. Commissioner 

Gonzales asked if the FDIC was working on any additional tools 

for third—party risk management to help community banks. Mr. 

Lyons stated that discussions are being held with the Federal 

Reserve and the Office of the Comptroller of the Currency (OCC) 

to possibly issue additional resources. Commissioner Gonzales 

followed up by inquiring if examiners will cite to the thirdparty risk management guidance if any issues are identified 

concerning third-party risk management. Mr. Brown noted that 

the guidance is not a regulation and examiners will not cite to 

the guidance. He emphasized that we would take appropriate 

action if we had concerns from a risk perspective. Ms. Eberley 

mentioned third-party relationship challenges that bankers are 

facing regarding deposits and lending. She also highlighted 

guidance that was issued by the FDIC, Federal Reserve, and OCC 

for community banks about how to conduct due diligence on 

financial technology companies. 

Commissioner C. Cooper emphasized how important it is to 

train examiners. Commissioner Thompson concurred that training 

is important, and he appreciates the training provided by the 

FDIC for state examiners. 
At the conclusion of the discussion, Ms. Eberley thanked 

the members and presenters for their participation and 

conversation. Chairman Gruenberg followed by expressing his 

appreciation to the members and staff for the excellent 

presentations and meaningful discussion. 

There being no further business, the meeting was 

concluded at 2:53 p.m. 

_____________________________________________ 

39 

Closing Remarks 

Debra A. Decker 

Federal Deposit Insurance Corporation 

Executive Secretary 

and Committee Management Officer 

FDIC Advisory Committee of State Regulators 

October 18, 2023 
 

 

Meeting of the Advisory Committee of State Regulators 

of the 

Federal Deposit Insurance Corporation 

Federal Deposit Insurance Corporation Building 

Washington, D.C. 

Open to Public Observation Via Webcast 

October 18, 2023 – 1:00 PM 

I hereby certify that, to the best of my knowledge, the attached 

minutes are accurate and complete. 

________________________________ 

Martin J. Gruenberg

Chairman 

Board of Directors 

Federal Deposit Insurance Corporation