How is my bank examined for compliance with banking laws and regulations?
Federal and state banking regulators routinely examine trust departments for compliance with laws and regulations, as well as the bank’s management of various risks. These thorough onsite examinations occur at least every eighteen months. Some institutions have regulators within the bank’s premises throughout the year to examine fiduciary activities continuously. During an examination, examiners do not simply rely on documentation provided by the institution to determine compliance with banking laws. Examiners sample and test various operations to ensure that important transactions may be properly completed and that the record-keeping function is accurate. In addition, examiners review and test the bank’s internal controls on custodial and investment management activities, conflicts of interest, recordkeeping of securities transactions, and management information systems. The testing of internal controls allows the examiner to determine whether the bank is able to identify transactiona
