BOARD OF GOVERNORS
FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20551
DIVISION OF BANKING
SUPERVISION AND REGULATION
SR 95-19 (SUP)
March 30, 1995
TO THE OFFICER IN CHARGE OF SUPERVISION
AT EACH FEDERAL RESERVE BANK
SUBJECT: Revisions to Guidance on Meetings with Boards of Directors
This SR letter amends guidance presented in SR 85-28, "Examination Frequency and Communicating with Directors," and supersedes guidance provided in SR 88-12, "Meetings with Boards of Directors of Troubled Small Bank Holding Companies."
Meetings with Directors of Shell Bank Holding Companies with Less Than $500 million in Assets
SR 85-28 specifies that a meeting should generally be held with the board of directors at the conclusion of any full-scope examination or inspection in which a state member bank is rated CAMEL composite 4 or 5 or a bank holding company (BHC) is rated BOPEC composite 4 or 5. In addition, it specifies that a meeting should also be held if an organization is rated composite 3 and its condition is deteriorating or has shown little improvement since a prior examination/inspection in which it was rated composite 3.
SR 88-12 authorizes an exception to this general policy by delineating conditions under which a meeting need not be held with the directors of shell BHCs with less than $150 million in assets that are rated BOPEC composite 4 or 5. This SR letter extends this exception to all shell BHCS with less than $500 million in assets that are rated BOPEC composite 3, 4, or 5 and updates the conditions listed in SR 88-12.
Specifically, a meeting with the board of directors need not be held after an inspection that results in a BOPEC composite rating of 3, 4, or 5 for a shell BHC with less than $500 million in assets if all of the following conditions are met:
(a) a meeting was held when the BHC was first downgraded to a BOPEC composite rating of 3, 4, or 5;
(b) the examination of the subsidiary bank(s) revealed no significant deterioration since the prior meeting;
(c) no significant violations were revealed by the inspection of the BHC; and
(d) the BHC is in compliance with any informal or formal enforcement actions.
Participation of Reserve Bank Officers in Meetings with Directors
Under current guidance, members of the Reserve Banks' official staffs are expected to represent the Federal Reserve at meetings with the directors of banks and bank holding companies. This SR letter amends this guidance to grant Reserve Banks the discretion to have senior examination staff represent the Reserve Bank in meetings with the directors of banks and bank holding companies with less than $500 million in assets.
Reserve Banks are further authorized to conduct conference calls with directors in place of on-site meetings for BHCs with less than $500 million in assets, when considered appropriate and if an on-site meeting was held following the previous inspection.
Participation of Reserve Bank Presidents in Meetings with Directors
Under current guidance, Reserve Bank Presidents are expected to participate in meetings with directors of the largest multinational and regional organizations that are rated BOPEC composite 3, 4, or 5. This SR letter amends that guidance to grant Reserve Banks the discretion to determine the circumstances under which the participation of Reserve Bank Presidents is appropriate and necessary.
If you have any questions regarding the changes discussed above, please contact Mr. Kevin Bertsch (202/452-5265).
Stephen C. Schemering
Cross-Reference: SR 85-28
Supersedes: SR 88-12
SR letters | 1995