How To Handle A Tough Bank Examiner

I know this may sound a little crazy, but there are some difficult examiners out there. This article is not an attack on examiners; I was an examiner for 6 years. It was the best job I ever had. Lucky for me, I worked with a great team of people, but I’ve seen some unpleasant experiences and heard many stories over the years of examiners not handling interactions with bankers tactfully and vice versa. I was part of nearly 100 exams in my career, so I’ve seen some interesting situations. Examiners frequently have to give bad news, and sometimes it’s to people that don’t want them there in the first place. That can make a challenging job even harder. So, what do you do if you are dealing with an examiner who seems overly strict, uncooperative, and just hard to deal with? There are really two simple steps: be polite and professional, and stick to the facts.

I’ve seen banker-examiner relationships erode over the course of an examination, but whenever the banker stays polite and professional, they have always have a much better outcome. An examiner’s job is to evaluate your institution, provide feedback, and rate the strength of your program. If you always present a positive and professional attitude, they will remember that. If you think a mistake has been made, collaborate with the exam team to find the right answer or find the solution. At the same time, this is the easiest and hardest of the two tips. Remember: professionalism never goes out of style. Work with them to find solutions, not against them to find a way out. Attitude is not an element banks are rated on, but management oversight is. You better believe that management's attitude towards compliance and whether or not they are proactive and willing to address issues plays a part in that rating.

Making fact-based arguments is the easiest and most effective way to get your point across when you have a disagreement with an examiner. Sounds obvious, right? Well, not always. I was examining a smaller rural institution a few years back. I found 9 violations across multiple areas. When I presented the first finding to the president, he immediately said I was wrong and that I misread the regulation. Not wanting to argue, I told him I would re-evaluate and come back (already knowing the answer because I had looked it up in the regulation 4 minutes prior). So, I printed it off for him and went over what he needs to do to comply. “Huh, it must have changed,” he told me. After seeing the evidence, he was more receptive. We decided on corrective action and I moved on to my next area of review. When I had my next finding it was like an old Yogi Berra quote: "Déjà vu all over again." Same reaction, same "gut" feeling, same result. On my third finding, I learned my lesson. I preemptively printed the regulation off, knowing he would likely challenge me again. He did. This went on all week with violations and weaknesses in nine areas. He had every right to challenge me along the way, but rather than make fact-based arguments, he went with his gut and emotions. He practically did my job for me by pointing out all of the CMS weaknesses from these interactions. Oversight was weak (he was the president), policies and procedures were outdated (several violations were from regulatory changes he didn't know about), training needed improvement, and monitoring and auditing was non-existent. Had he done some research, read the regulation, and presented factual arguments, things could have gone much different. Your credibility will increase with professional, factual, and well-thought out arguments.

These tips may not lead to significant decreases of your stress level during an exam, but it should help you have the best outcome when dealing with a tough examiner. 

Jake Peterson