Banking and Finance Law Daily FHFA OIG releases compliance review on supervisory guidance for community investment examinations
Thursday, January 7, 2021

FHFA OIG releases compliance review on supervisory guidance for community investment examinations

By Charles A. Menke, J.D.

The review sought to determine whether the FHFA’s Division of Federal Home Loan Bank Regulation complied with a 2018 quality control reviewer independence mandate in connection with community investment examination activity.

The Office of Inspector General for the Federal Housing Finance Agency has released a compliance review in which it found no evidence that quality control branch (QCB) examination specialists who performed quality control (QC) reviews of the Division of Federal Home Loan Bank Regulation’s (DBR) community investment examinations participated in the underlying examinations. The review stemmed from a 2018 audit, in which the OIG recommended the FHFA to ensure that individuals conducting community investment examinations under DBR’s revised independent QC process did not participate in the examination activity under review.

The OIG’s 2018 Audit found that DBR had not strictly prohibited personnel who performed community investment examinations from conducting QC reviews of those examinations. As a result of the audit, the DBR issued revised guidance precluding QCB specialists performing a QC review from having participated in the activity being reviewed. The OIG initiated the compliance review in August 2020 to determine if DBR QCB staff complied with the prohibition contained in the revised guidance. The OIG "found no instance where this prohibition was not followed."

MainStory: TopStory CommunityDevelopment OversightInvestigations

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