FRB: Supervisory Letter SR 93-15 (FIS) on system training procedures -- March 25, 1993

TO THE OFFICER IN CHARGE OF SUPERVISION
AT EACH FEDERAL RESERVE BANK

SUBJECT: System Training Procedures

In 1990, the System undertook a project to revise and strengthen its examiner training program, and to implement a proficiency test covering core training courses and self-study modules. SR Letter 91-1 (January 4, 1991) set forth a program of training and testing designed to ensure that Federal Reserve staff members that seek to become commissioned examiners master a core curriculum, and demonstrate that mastery by passing a core proficiency test.¹ SR 91-1 did not contemplate exceptions to mastering the core curriculum or passing the proficiency test for commissioning examiners hired after December 31, 1990.²

The extensive educational and work experience backgrounds of many of the people hired since December 31, 1990, have given rise to questions about whether, and if so when, waivers of certain of the training or testing requirements set forth in SR 91-1 might be warranted.

In response to those questions, the Executive Training Committee identified the following situations in which Reserve Banks could waive training or testing requirements. Each is presented below as described to the Officers in Charge of Supervision at the meeting in Dallas on February 17, 1993.

At the Reserve Bank's discretion:

The training and testing requirements may be waived for any System staff member hired after December 31, 1990, who was previously commissioned by another Federal financial regulatory agency.
The training and testing requirements may be waived for any System staff member hired after December 31, 1990, who was previously commissioned by a state banking agency that has a comparable certification process.
The training requirements may be waived for any System staff member hired after December 31, 1990, who has significant³ previous banking experience.
Attendance at the System's Introduction to Examinations School may be waived for any System staff member hired after December 31, 1990, who has relevant education beyond an undergraduate business degree. However, the staff member will be expected to successfully pass an "exemption" examination covering the materials presented in the Introduction to Examinations School. Reserve Banks also may waive the requirement to complete this exemption test for any staff member, regardless of education, hired prior to the date of this letter. However, the staff member will be expected to attend the other core schools, complete the self-study modules, and pass the core proficiency examination.

Staff members receiving System commissions before the core proficiency examination becomes available will not be required to take the test.

Board training staff, working together with the Reserve Banks, will develop written guidance to assist Reserve Bank training staffs in providing a review of the curriculum for all candidates taking the core proficiency examination. The core proficiency examination will be given in a computerized format at testing sites convenient to Reserve Banks throughout the country on dates selected by the individual Reserve Banks. Further information regarding the administration of the examination will be made available once it is developed. The test and administration procedures are expected to be available during the second quarter of 1993.

In exercising the discretion given to grant any of the above waivers, Reserve Banks should be careful not to compromise the training and experience standards required to qualify for commissioning as a Federal Reserve examiner. Neither successfully completing the training and testing required by SR 91-1, nor being granted a waiver of training or testing requirements, automatically qualify a person for commissioning. Each recommendation to issue a commission should be supported by sufficient evidence of training, experience and performance to ensure that consistently high standards are applied throughout the System to qualify for an examiner's commission.

Should you have specific questions regarding the training procedures, please call Nancy Griggs, Examiner Training Administrator, at (202) 452-3848.

Don E. Kline
Associate Director

Cross Reference: SR 91-1

Footnotes

1. The test is to cover course content from Examiner Training School I (Introduction to Examinations), Examiner Training School II (Financial Institutions Analysis), Examiner Training School III (Loan Analysis), Examiner Training School IV (Bank Management), and fourteen self-study modules. Return to text

2. The requirements of SR 91-1 apply to all System staff regardless of examination specialty designation. A key purpose of the core proficiency test was to insure that all staff members achieve mastery of a defined core of supervisory knowledge. Return to text

3. Significant experience should be determined by each Reserve Bank, but should be no less than five years relevant experience with a financial institution. Return to text