The Bureau Can Improve Its Periodic Monitoring Program to Better Target Risk and Enhance Training for Examiners

The Bureau's Division of Supervision, Enforcement and Fair Lending monitors supervised institutions to maintain reasonably current information on their activities and to assess whether changes in risks to consumers or markets warrant changes in SEFL's planned supervisory activities. We evaluated SEFL's approach to monitoring supervised institutions for consistency with the Bureau's strategic plan and internal policies and procedures.

We found that SEFL can improve its supervisory monitoring program by monitoring more nondepository institutions, better tailoring resources dedicated to monitoring based on risk, and hiring additional examiners. In addition, SEFL can improve its efforts to conduct and document periodic monitoring activities. During the drafting of our report, SEFL finalized updates to its periodic monitoring policy, which include monitoring more nondepository institutions. SEFL is also in the process of hiring additional examiners.

This report contains recommendations.