2022 Trust Examiner School - Presentations
Trust Examiner School
October 18-27 , 202 2
@ www.csbs.org � @csbsnews
CONFERENCE OF STATE BANK SUPERVISORS 1129 20th Street NW / 9th Floor / Washington, DC 20036 / (202) 296-2840
Trust Examiner School Live Virtual October 18 – 27, 2022
Tuesday, October 18, 2022
Introduction & Pre ‐ Course Review
1:00 pm – 2:30 pm 2:30 pm – 2:45 pm 2:45 pm – 4:00 pm
Break
Introduction (continued)
Wednesday, October 19, 2022 Prior Class Review
1:00 pm – 1:30 pm 1:30 pm – 2:30 pm 2:30 pm – 2:45 pm 2:45 pm – 3:30 pm 3:30 pm – 4:00 pm
Supervision & Organization
Break
Supervision & Organization
Operations, Internal Controls & Audit
Thursday, October 20, 2022 Prior Class Review
1:00 pm – 1:30 pm 1:30 pm – 2:45 pm 2:45 pm – 3:00 pm 3:00 pm – 4:00 pm
Operations, Internal Controls & Audit
Break
Asset Management
Tuesday, October 25, 2022 Prior Class Review
1:00 pm – 1:30 pm 1:30 pm – 2:15 pm 2:15 pm – 2:30 pm 2:30 pm – 4:00 pm
Asset Management
Break
Account Administration
Wednesday, October 26, 2022 Prior Day Review
1:00 pm – 1:30 pm 1:30 pm – 2:15 pm 2:15 pm – 2:30 pm 2:30 pm – 4:00 pm
Account Administration
Break
Conflicts of Interest
Thursday, October 27, 2022 Prior Day Review
1:00 pm – 1:30 pm 1:30 pm – 2:15 pm 2:15 pm – 2:30 pm 2:30 pm – 3:30 pm 3:30 pm – 4:00 pm
Conflicts of Interest
Break
Earnings
Final Assessment
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Virtual Trust Examiner School Introduction
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Introductions
NAME
STATE AGENCY
YEARS OF EXAMINATION EXPERIENCE & WITH TRUST
FUN FACT ABOUT YOU
SOMETHING YOU HOPE TO LEARN DURING THIS CLASS
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Instructor Contact Information
Kirk Schreiber
Senior Depository Analyst Indiana Department of Financial Institutions kschreiber@dfi.in.gov
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Instructor Contact Information
Bank Examinations Supervisor Alabama State Banking Department Andre.Scott@banking.alabama.gov Andre Scott
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Instructor Contact Information
CSBS Senior Director of Learning & Development arichardson@csbs.org Amy Richardson
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Session Learning Objectives: 1. Review Day One: Trust Examiner Training
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Session Learning Objectives: 2. Understand the
role of pre-exam planning in risk scoping an exam
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Session Learning Objectives: 3. Discuss agency and/or joint exam
approaches to pre-notification package
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Session Learning Objectives: 4. Understand Trust
Department and Trust Company structures
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Session Learning Objectives: 6. Recognize Trust
Companies have additional rating components
10
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Session Learning Objectives: 7. Understand who regulates trusts
11
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Session Learning Objectives: 8. Understand the Uniform Interagency Trust Rating System (UITRS) and other rating systems
12
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Session Learning Objectives: 10. Apply concepts to exam scenario exercises
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Introduction
Review Day One: Trust Examiner Training
Trust Pre-Examination Planning
Trust Department VS Trust Company
Ratings
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Go to www.kahoot.it
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Introduction
Overview of Day One: Trust Examiner Training
Trust Pre-Examination Planning
Trust Department VS Trust Company
Ratings
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Trust Pre-Examination Planning
Prior Issues
Prior Exam & Workpapers
Call Reports & Financials
Financial Condition
Off ‐ Site Review
Requested Information
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Trust Pre-Examination Planning
Familiarize Yourself with the Trust Department/Company • Internal and external documents • Conversations with examiners and management
Identify Key Risk Areas • Draw conclusions on risks, examination
Initial Contact with Management • Introduction • Sooner rather than later
strategy, and assignments
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Trust Pre-Examination Planning
Requesting Examination Information • Draw conclusions about risks, examination strategy, and assignments
Creation of Scope Memo • Varies by department • At a minimum, should cover • Institutional overview • Risk assessment • Discussions with Management • Prior examination findings • Financial analysis • Assignments/logistics
Determine Staffing
• Subject matter experts • Sufficient to complete a timely examination
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Pre-Notification Package
Also called: • Entrance Letter • First Day Letter • Request List
20
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Off-Site Review of Workpapers
• Prior examination issues • Any enforcement actions • Logistics • Information from the confidential pages
21
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Introduction
Overview of Day One: Trust Examiner Training
Trust Pre-Examination Planning
Trust Department vs. Trust Company
Ratings
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What is a Trust Department? • Part of a bank
• Not assigned CAMELS ratings • Earnings component based on size • Regulators: • If nationally chartered, OCC • If state chartered, State & Federal agencies (FDIC, FRB)
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What is a Trust Company? • Stand-alone
• Assigned CAMELS ratings • Earnings component is standardized • Regulators: • If nationally chartered, OCC • If state chartered
• State & FRB if bank in org chart • State only if not
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Trust Department vs. Trust Company
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Introduction
Overview of Day One: Trust Examiner Training
Trust Pre-Examination Planning
Trust Department VS Trust Company
Ratings
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Trust Rating System
• Uniform Interagency Trust Rating System (UITRS) • Five components of an institution’s fiduciary activities to be evaluated • An overall Composite rating considers each component
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Trust Rating Components
1. Management 2. Operations, Internal Controls & Audit 3. Earnings 4. Compliance 5. Asset Management
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Trust Rating Scale
• Scale from 1 to 5 • 1 is the best rating available • Ratings are distinguished by key words or phrases
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Rating the Component:
Management
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Rating the Component: Operations,
Internal Controls & Audit
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Rating the Component: Earnings
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Rating the Component: Compliance
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Rating the Component: Asset
Management
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Resources • FDIC Trust Examination Manual https://www.fdic.gov/regulations/examinations/trustmanual/index.html
• UITRS Update Letter – 10/7/1998 https://www.fdic.gov/news/news/financial/1998/fil98115b.html
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Exercise
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Virtual Trust Examiner School Supervision & Organization
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Session Learning Objectives: 1. Understand the role of the Statement of Principles
2
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Session Learning Objectives: 2. Discuss
evaluation of staffing and organization
3
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Session Learning Objectives: 3. Provide examples of areas to review related to Board oversight
4
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Session Learning Objectives: 4. Understand the role of the Trust Committee
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Session Learning Objectives: 5. Discuss the role of policies and procedures
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Session Learning Objectives: 6. Provide tips for
evaluating insurance coverage
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Session Learning Objectives: 7. Discuss some common legal issues
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Session Learning Objectives: 8. Apply concepts to exam scenario exercises
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Supervision & Organization Statement of Principles of Trust Department Management
Staffing & Organization
Fiduciary Insurance Coverage
Legal Counsel & Litigation
10
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Statement of Principles of Trust Department Management
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Statement of Principles of Trust Department Management
Designate Officer
Trust Committee
Legal Counsel
Policies
Internal Controls
Examination Reports
Audit
Reports
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Statement of Principles of Trust Department Management
Designate Officer
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Statement of Principles of Trust Department Management
Trust Committee
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Statement of Principles of Trust Department Management
Policies
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Statement of Principles of Trust Department Management
Legal Counsel
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Statement of Principles of Trust Department Management
Internal Controls
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Statement of Principles of Trust Department Management
Audit
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Statement of Principles of Trust Department Management
Reports
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Statement of Principles of Trust Department Management
Examination Reports
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Supervision & Organization Statement of Principles of Trust Department Management
Staffing & Organization
Fiduciary Insurance Coverage
Legal Counsel & Litigation
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Board Duties
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Committee Duties
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Management
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Policies & Procedures
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Staffing & Organization
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Supervision & Organization Statement of Principles of Trust Department Management
Staffing & Organization
Fiduciary Insurance Coverage
Legal Counsel & Litigation
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Fiduciary Insurance Coverage
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Supervision & Organization
Statement of Principles of Trust Department Management
Staffing & Organization
Fiduciary Insurance Coverage
Legal Counsel & Litigation
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Legal Counsel & Litigation
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Resources • Statement of Principles of Trust Department Management https://www.fdic.gov/news/inactive-financial-institution-letters/1998/ fil98100b.html
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Virtual Trust Examiner School Operations, Internal Controls & Audits
1
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Session Learning Objectives: 1. Understand the importance of recordkeeping related to trust accounts, as well as the trust company/department
2
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Session Learning Objectives: 2. Discuss the importance of internal routines & controls, including reconciliations & segregation of duties
3
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Session Learning Objectives: 3. Understand audit requirements under the Statement of Principles of Trust Department Management
4
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Session Learning Objectives: 4. Discuss audit
program cycles & audit committee responsibilities
5
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Session Learning Objectives: 5. Understand the scope of audits
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Session Learning Objectives: 6. Discuss what factors are included in the evaluation of the audit function
7
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Session Learning Objectives: 7. Discuss call report requirements, including frequency, accuracy & timeliness
8
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Session Learning Objectives: 8. Apply concepts to exam scenario exercises
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Operations, Internal Controls & Audits
Recordkeeping
Internal Routines & Controls
External & Internal Audit
Call Reports
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Recordkeeping
Maintain records in sufficient detail to properly reflect all activities Report the assets of each trust account separately from unrelated accounts Account for principal and income according to the governing agreement
11
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Operations, Internal Controls & Audits
Recordkeeping
Internal Routines & Controls
External & Internal Audit
Call Reports
12
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Internal Routines & Controls
Segregation of Duties
Reconcilements Vault Control Procedures
Blank Check Control
Hold-Mail Procedures
Vacation Policies
Suspense Accounts
13
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Operations, Internal Controls & Audits
Recordkeeping
Internal Routines & Controls
External & Internal Audit
Call Reports
14
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Statement of Principles of Trust Department Management
Provide for an adequate audit (by internal or external auditors or a combination thereof) of all fiduciary activities, annually. Trust committee minutes should record the findings of the audit, including actions taken as a result of the audit.
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Statement of Principles of Trust Department Management
Continuous Audit Process
Annual Audit Process
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Audit Program
• Cycle • Audit Committee
Charter and/or Policy
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Audit Scope
• Verification of trust assets • Sufficient records • Review procedures • Accuracy of transactions • Fee calculation & collection
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Factors Evaluated
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SAS, SSAE & SOC Reports
• Statement on Auditing Standards (SAS) 70
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SAS, SSAE & SOC Reports
• Statement on Standards for Attestation Engagements (SSAE) 16 & 18
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SAS, SSAE & SOC Reports
System and Organization Controls (SOC) Reports
• SOC 1 • SOC 2 • SOC 3
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Operations, Internal Controls & Audits
Recordkeeping
Internal Routines & Controls
External & Internal Audit
Call Reports
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Call Reports
FFIEC Call Report
State Specific Requirements
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Resources • FDIC: Audits & Accounting Issues https://www.fdic.gov/regulations/examinations/trustmanual/section_2/fdic_section_ 2-internal_controls_and_auditing.html#audits_and_accounting_issues • SOC for Service Organizations https://www.aicpa.org/interestareas/frc/assuranceadvisoryservices/serviceorganiza tion-smanagement.html • FFIEC Call Report Requirements https://www.ffiec.gov/forms041.htm
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Virtual Trust Examiner School Asset Management
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Session Learning Objectives: 1. Discuss different types of investments and securities used by trust departments and trust companies
2
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Session Learning Objectives: 2. Understand the role of policies, procedures, and practices
3
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Session Learning Objectives: 3. Discuss how to approach asset review & how to assess asset quality
4
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Session Learning Objectives: 4. Understand the key factors to review related to asset management
5
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Session Learning Objectives: 5. Discuss what is required for investment reviews
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Session Learning Objectives: 6. Understand the implications related to insurance for real and personal property
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Session Learning Objectives: 7. Apply concepts to exam scenario exercises.
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Discussion Topics
Investments & Securities
Asset Quality
Policies, Procedures & Practices
Investment Reviews
Insurance for Real & Personal Property
Asset Review
9
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Investments & Securities
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Investments & Securities
Types of Investments: Cash Management
Fixed Income Products
Equity Securities
Unique or Hard-to-Value Assets
Mutual Funds
11
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Investments & Securities
Examples of Investments: Money Market Funds
Municipal Bond Issues
Exchange Traded Funds
Limited Partnerships
Real Estate
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Investments & Securities
Asset Allocation Models: Range from conservative to aggressive
• Conservative = less risky • Aggressive = more risky Approach to allocation models & percentages vary, but must be documented
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Investments & Securities
Examples of Asset Allocations:
Capital Preservation
Income/Modest Growth
Balanced
Growth/Modest Income
Other Asset Mix
Growth
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Policies, Procedures & Practices
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Policies, Procedures & Practices
Trust Company or Department Practices
Policies & Procedures
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Policies, Procedures & Practices
Review & Approval
Policy Exceptions
Unique Assets
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Asset Review
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Asset Review
Review
Determine
Consider
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Asset Review
Size or Circumstance
Titles
Risk
20
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Asset Quality
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Asset Quality Are holdings in line with investment objectives?
How often are unique assets being valued?
Are letters of retention obtained?
Annual reviews of Irrevocable Life Insurance Trusts (ILITs)?
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Asset Quality
Compliance with governing document?
Written authorizations obtained?
How are worthless assets tracked & addressed?
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Investment Reviews
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Investment Reviews
Annual Documented Reported Follow up Independence
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Investment Reviews
Explain the process Benchmarking Statement of Principles of Trust Department Management
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Insurance for Real & Personal Property
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Insurance for Real & Personal Property Insurance in place? Current? Who is paying for it?
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Insurance for Real & Personal Property Is amount sufficient? Tracking premium due dates?
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Resources • FDIC Trust Examination Manual – Asset Management https://www.fdic.gov/regulations/examinations/trustmanual/section_3/f dic_section_3-asset_management.html
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Virtual Trust Examiner School Account Administration
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Session Learning Objectives: 1. Discuss types of accounts
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Session Learning Objectives: 2. Understand how to complete account line sheets
3
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Session Learning Objectives: 3. Discuss guidelines for selection of accounts
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Session Learning Objectives: 4. Understand file review
procedures & best practices
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Session Learning Objectives: 5. Review the differences between discretionary & non-discretionary accounts
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Session Learning Objectives: 6. Discuss custodian responsibilities
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Session Learning Objectives: 7. What is ERISA and why is it important to us?
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Session Learning Objectives: 8. Review compliance and related issues
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Session Learning Objectives: 9. Discuss other types of accounts
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Session Learning Objectives: 10. Apply concepts to exam scenario exercises
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Discussion Topics
Account Line Sheets
Selection of Accounts
Discretionary / Non- Discretionary
Types of Accounts
File Review
Custodian ERISA
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Discussion Topics
Unique & Hard-to- Value Assets
Self- Directed IRAs
Special Needs Trust
Co- Fiduciary Accounts
Stale Estates
Compliance
13
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Types of Accounts
Court Appointed
Charitable Trusts
Personal Trusts
Corporate Trusts
Agencies
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Types of Accounts
Employee Benefits
IRAs
ESOPs
Investment Management
ILITs
15
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Account Line Sheets
Approach varies •Agency •Account type
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Account Line Sheets
Information on the line sheet •Confirms what is on synoptic record • Examples: • Date & type of governing document • Investment objective • Dates of annual reviews • Asset allocation • Discretionary distributions
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Account Line Sheets
Issues at prior exams •Review at current exam to determine if corrected
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Account Line Sheets
Investment authority • Is the trust company/department managing the investments? • Is an external company involved?
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Guidelines for Selection of Accounts Non ‐ Approved Assets High Cash Balances Asset Concentrations Recently Opened or Closed Prior Exam Issues
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Guidelines for Selection of Accounts Variety of Each Capacity Trustee & Co ‐ Trustee Agent, Custodian, etc. Riskier Account Types Accounts with Unique Assets
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File Review Procedures & Best Practices Start with synoptic record
Review statement preparation
Verify fee calculations
Court documentation
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File Review Procedures & Best Practices Account holdings as of review date
Account activity since prior exam
Partner with experienced trust examiner
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File Review – Common Issues Investments not within stated objective
Annual reviews
Account opening information
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File Review – Common Issues Non ‐ compliance with governing document
Written direction
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Discretionary/Non-Discretionary
Definitions: •Discretionary ‐ fiduciary makes investment decisions at their discretion for a clients account without the client's approval •Non ‐ Discretionary ‐ investment decisions must be discussed & approved by the clients before the transaction takes place
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Discretionary/Non-Discretionary
Discretionary: •Annual investment reviews required • Include more in account review sample •Distribution approvals • Investments within stated objectives
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Discretionary/Non-Discretionary
Non ‐ Discretionary: •Annual investment reviews not required • Include a few in account review sample •Co ‐ trustee account documentation
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Custodian Responsibilities Custody Account: An agency account concerning which the main duties of the custodian (agent) are to keep safe and preserve the property and to perform ministerial acts with respect to the property as directed by the principal. The agent has no investment or managerial responsibilities. To be distinguished from managing agency account and safekeeping account. Agent: A person who acts for another person by the latter's authority. The distinguishing characteristics of an agent are (1) that he acts on behalf and subject to the control of his principal, (2) that he does not have title to the property of his principal, and (3) that he owes the duty of obedience to his principal's orders. https://www.fdic.gov/regulations/examinations/trustmanual/appendix_h/appendix_h.html
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Custodian Responsibilities
Safekeeping
Annual reconciliation of holdings
Statements provided to appropriate parties
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ERISA
ERISA: An acronym for the Employee Retirement Income Security Act of 1974 which set up federal minimum standards for employee benefit plans, including standards regulating the conduct of plan fiduciaries and trustees. The Act also established an insurance program designed to guarantee workers receipt of pension benefits if their defined benefit pension plan should terminate.
https://www.fdic.gov/regulations/examinations/trustmanual/appendix_h/appendix_h.html
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ERISA
https://www.fdic.gov/regulations/examinations/trustmanual/section_5/section_v.html
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ERISA
Conformance with ERISA
Plan document: • What type is it? • What is trust company/department’s role? • Original plan date • Has there been a restatement of the plan?
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ERISA
Important to look at: • Participant loans
• Employer securities or real property • IRS favorable determination letters • Summary plan description • Form 5500 • Premium Benefit Guarantee Corporation (PBGC) filing • Prohibited transactions
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Compliance
• Policies & procedures • Account opening & closing procedures • Bank Secrecy Act/Anti-Money Laundering (BSA/AML) • Laws & regulations • 12B-1 fees • Insiders
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Self-Directed IRAs Regional Director Memorandum 98-058 June 23, 1998
Three minimum disclosures: • Not insured by the FDIC
• Not a deposit or obligation of, or guaranteed by, the institution • Subject to investment risks, including possible loss of principal
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• If the accounts are not trust accounts, they should be reviewed as part of the Nondeposit Products under the above RD Memo Self-Directed IRAs Regional Director Memorandum 01-035 September 5, 2001
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Self-Directed IRAs – Exam Concerns Account Documentation
Assets & Asset Valuations
Accounting Records
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Self-Directed IRAs – Exam Concerns Investment Advice
Illegal Investments
Recordkeeping
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Self-Directed IRAs – Exam Concerns Audit/Independent Review
Insurance
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Unique & Hard-to-Value Assets
Policies & Procedures Evaluations – timing & frequency Letters of Retention Assets booked & valued
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Unique & Hard-to-Value Assets
Consistency Safekeeping Secure & inventoried Insurance
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Special Needs Trust • Tax-advantaged savings option for parents & guardians of people with disabilities • To help pay for expenses such as education, housing, transportation and health care not covered by insurance • Somewhat similar to 529 plans
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Special Needs Trust • Account investments and earnings will not disqualify an eligible individual’s entitlement to federal benefits that are subject to income limits, such as Medicaid • Accounts are FDIC insured up to $250,000
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Special Needs Trust Review:
• Governing document • Any court orders • Policies & procedures • Volume of accounts • Distributions
45
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Co-Fiduciary Accounts
Shared administration of an account with another fiduciary Guardian of the Person
Family interests
Corporate fiduciary
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Co-Fiduciary Accounts
Act in unison
Reasonable care
Responsibilities
Standards of care
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Co-Fiduciary Accounts
Documentation is key
Physical control of account assets
Joint responsibility for administration
Disinterested or uncooperative co ‐ fiduciary
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Co-Fiduciary Accounts Review:
• Governing document or court appointed • Proper approvals for all activity • Loan activity
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Stale Estates
18 months or older
Court accounting records
Officer’s Questionnaire
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Resources • FDIC: Compliance/Account Administration - Personal and Charitable Accounts https://www.fdic.gov/regulations/examinations/trustmanual/Section_4/section_iv.html • FDIC: Compliance/Account Administration – Employee Benefit Accounts https://www.fdic.gov/regulations/examinations/trustmanual/section_5/section_v.html
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Resources • FDIC: Account Administration – Corporate Trust Accounts https://www.fdic.gov/regulations/examinations/trustmanual/section_6/section_vi.html • FDIC: Compliance – Pooled Investment Vehicles https://www.fdic.gov/regulations/examinations/trustmanual/section_7/section_vii.html
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Resources • FDIC: ERISA – Prohibited Transactions https://www.fdic.gov/regulations/examinations/trustmanual/appendix_e/e_erisa.html#statute_prohib itedtransactions • Department of Labor – ERISA Interpretation Letters https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/advisory-opinions
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Virtual Trust Examiner School Conflicts of Interest
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Session Learning Objectives: 1. Understand the importance of evaluating
investments in own bank, affiliates, or obligations of insiders
2
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Session Learning Objectives: 2. Discuss broker relationships
3
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Session Learning Objectives: 3. Review what is permitted related to investments in 12b-1 mutual funds
4
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Session Learning Objectives: 4. Understand the importance of evaluating investments in own bank or affiliate
repurchase agreements
5
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Session Learning Objectives: 5. Discuss what constitutes material inside information
6
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Session Learning Objectives: 6. Review requirements related to multi- account and inter-trust transactions
7
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Session Learning Objectives: 7. Apply concepts to exam scenario exercises
8
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Conflicts of Interest
Interest Bearing Deposits
Stocks or Obligations
Insider Investments
Broker Relationships
9
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Conflicts of Interest
12B-1 Mutual Funds
Repurchase Agreements
Inside Information
Multi-Account & Inter-Trust Transactions
10
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Introduction
11
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Conflict of Interest
12
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Self-Dealing
13
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Contingent Liabilities
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Contingent Liabilities - Types • Contravention of Trust • Commingling • Prudent Investor Rule • Real Estate & Mortgages • Deposits with Self • Acts without Consent/Approval • Failure to Invest
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Conflicts of Interest
Interest Bearing Deposits
Stocks or Obligations
Insider Investments
Broker Relationships
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Interest Bearing Deposits
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Interest Bearing Deposits
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Interest Bearing Deposits
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Interest Bearing Deposits
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Interest Bearing Deposits
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Conflicts of Interest
Interest Bearing Deposits
Stocks or Obligations
Insider Investments
Broker Relationships
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Stocks or Obligations
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Stocks or Obligations
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Stocks or Obligations
25
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Conflicts of Interest
Interest Bearing Deposits
Stocks or Obligations
Insider Investments
Broker Relationships
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Insider Investments
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Insider Investments
28
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Conflicts of Interest
Interest Bearing Deposits
Stocks or Obligations
Insider Investments
Broker Relationships
29
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Broker Relationships
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Broker Relationships
31
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Broker Relationships
32
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Conflicts of Interest
12B-1 Mutual Funds
Repurchase Agreements
Inside Information
Multi-Account & Inter-Trust Transactions
33
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12B-1 Mutual Funds
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12B-1 Mutual Funds
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Conflicts of Interest
12B-1 Mutual Funds
Repurchase Agreements
Inside Information
Multi-Account & Inter-Trust Transactions
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Repurchase Agreements Repurchase Agreement: As applicable to trust departments, means a "loan" by a trust account to a financial institution or securities dealer. Normally, these loans are secured by U. S. Government or agency securities, bear a fixed rate, are payable at a fixed maturity, and may be subject to other terms. The regulatory agencies have generally taken the position that repurchase agreements with the fiduciary bank are a conflict of interest and self-dealing unless specifically authorized. Also sometimes called reverse repurchase agreements, repo, asset repo, RP, and buy back.
https://www.fdic.gov/regulations/examinations/trustmanual/appendix_h/appendix_h.html
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Repurchase Agreements
Sample Repurchase Agreement Transaction
https://www.financialresearch.gov/working-papers/files/OFRwp-2015-22_Repo-Arbitrage.pdf
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Internal Use Only
Repurchase Agreements • Temporary investment vehicle for cash balances • Employee benefit plan investments • Written policies & written agreement for each transaction
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Internal Use Only
Repurchase Agreements • Investments in own bank or affiliate repurchase agreements • Similar to investments in interest bearing deposits & stocks • Also called “repos”
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Internal Use Only
Conflicts of Interest
12B-1 Mutual Funds
Repurchase Agreements
Inside Information
Multi-Account & Inter-Trust Transactions
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Internal Use Only
Inside Information
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Internal Use Only
Inside Information
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Internal Use Only
Conflicts of Interest
12B-1 Mutual Funds
Repurchase Agreements
Inside Information
Multi-Account & Inter-Trust Transactions
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Internal Use Only
Multi-Account & Inter-Trust Transactions
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Internal Use Only
Multi-Account & Inter-Trust Transactions
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Internal Use Only
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Internal Use Only
Virtual Trust Examiner School Earnings
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Internal Use Only
Session Learning Objectives: 1. Understand earnings for non-depository institutions
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Internal Use Only
Session Learning Objectives: 2. Discuss Trust Department earnings and the impact on
overall bank profitability
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Internal Use Only
Session Learning Objectives: 3. Understand expected growth trends and the impact on earnings
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Internal Use Only
Session Learning Objectives: 4. Discuss principal sources of new trust business
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Session Learning Objectives: 5. Apply concepts to exam scenario exercises
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Internal Use Only
Discussion Topics
Trust Department Earnings Impact on Overall Bank Profitability
Principal Sources of New Trust Business
Actual Earnings Non-Depository
Expected Growth Trends
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Internal Use Only
Actual Earnings Non-Depository Budget vs. actual
Budget process
Rating approach
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Internal Use Only
Actual Earnings Non-Depository Regulatory reporting
Dividends
Affiliate relationships
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Internal Use Only
Trust Department Earnings on Overall Bank Profitability Budget vs. actual
Budget process
Rating approach
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Internal Use Only
Trust Department Earnings on Overall Bank Profitability Regulatory reporting
Impact on bank profitability
Losses or future events
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Internal Use Only
Expected Growth Trends
New & Closed Account List
Fee Schedules
Fee Waivers
Growth Expectations vs. Experience
Market Performance Impact
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Internal Use Only
Principal Sources of New Trust Business Types of new accounts
• Marketing/advertising • Declining account types Referrals New Employees Divesting or acquiring product lines
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Internal Use Only
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