Footnote 1:   Hurricane Katrina, which caused substantial damage in the Gulf Coast region, impacted 8 of the 11 financial institutions in our sample. The DRO developed a watch list to monitor and track the financial status of 43 FDIC-insured institutions that were impacted by hurricanes in 2005 (see details in Appendix II).

Footnote 2:   Real estate loans include commercial real estate, residential real estate, construction and land development, and farmland loans.

Footnote 3:   This provision was added to the FDI Act, which was later amended by the Federal Deposit Insurance Reform Conforming Amendments Act of 2005 to include the reference to the Deposit Insurance Fund.

Footnote 4:   On October 24, 2006, DSC replaced the Compliance Examination Manual with the Compliance Examination Handbook. Audit work was performed under the Manual and there were no relevant changes in the Handbook.

Footnote 5:   The form is completed by the institution, or its designee, to report whether a structure is located within a special flood hazard area.

Footnote 6:   Examiners prepare line sheets and/or real estate line cards to document their review of real estate loans, including information on appraisals and noncompliance with appraisal regulations.

Footnote 7:   Regional Directors Memorandum 2001-039, Guidelines for Examination Workpapers and Discretionary Use of Examination Documentation Modules, September 25, 2001.

Footnote 8:   Significant violations identified as such during the examination reflect deficiencies requiring prompt corrective action by the financial institution due to their serious nature, recurrent pattern, or system-wide impact.

Footnote 9:   The DRO percentages are similar to the FDIC’s national statistics for flood insurance violations and civil money penalties for all FDIC-supervised institutions examined during the same period. Specifically, of the 3,339 financial institutions DSC examined from January 1, 2005 through August 31, 2006, DSC identified 836 (25 percent) institutions with significant flood insurance violations. As of December 31, 2006, DSC's FIAT system showed that DSC had assessed civil money penalties for flood insurance violations against 48 (6 percent) of those 836 institutions, which were deemed by DSC to have a pattern or practice of violations consistent with the statutory provisions.

Footnote 10:   42 United States Code § 4012a(e).

Footnote 11:  ViSION is a bank-supervision tracking and reporting database. DSC refers to ViSION as an “information workstation” – a programmed means of handling all the computerized data needed to properly supervise an institution throughout its organizational life.

Footnote 12:   SOURCE is the system of record for the compliance and Community Reinvestment Act examination program and is extensively used by FDIC field supervisors, examiners, review examiners, and Washington Office policy staff.

Footnote 13:  STARS is DSC’s system for tracking and reporting consumer complaints.

Footnote 14:   The results of a non-statistical sample cannot be projected to the intended population by standard statistical methods.