A recent review of how federal regulators have handled COVID-caused disruptions in banking reviews led the Government Accountability Office to make two recommendations on how those same regulators could better prepare for future disruptions.
In a report last week, the GAO noted that regulators could not review most banks and credit unions in person during the pandemic, so they implemented workarounds such as postponing reviews and reviewing scanned copies of loan records. Of the five regulators reviewed that have risk management programs, three had updated their programs to reflect pandemic-related risk changes and also reviewed lessons learned from the pandemic. The other two had done one or the other, but not both.
The GAO singled out the two regulators that had not taken both actions. The agency recommended that the Federal Reserve develop and document specific action steps and timelines to complete components of its enterprise risk management framework related to identifying and assessing risks to its mission. monitoring. The Fed neither accepted nor disagreed with the recommendation, the GAO said. The agency also recommended that the Office of the Comptroller of the Currency review potential lessons learned from how it handled adjustments to supervisory activities during the COVID-19 pandemic. The OCC said a review would be completed by March 2023.