Federal Financial Institutions Examination Council Research Articles

Geographic Reach of Surgery Residency Applicants During In-Person and Virtual Interviews.

Background Virtual interviews for surgery residency may improve interview opportunities for applicants from underrepresented in medicine (UIM) and lower socioeconomic backgrounds. Objective To compare the geographic reach of surgical residency applicants during in-person versus virtual interviews. Methods This study compared applicants for the 2019 (in-person) and 2020 (virtual interviews) application cycle for surgery residency. Geographic reach (GR) was defined as the distance between applicants' current location and the program. Federal Financial Institutions Examination Council's website supplied socioeconomic data using applicants' geographic locations. Applicant demographics, United States Medical Licensing Examination (USMLE) scores, and geographic distance to program were collected. Multivariable analyses examined GR with interaction terms between interview type, UIM status, and socioeconomic status, while controlling for USMLE scores. Results A total of 667 (2019) and 698 (2020) National Resident Matching Program applications were reviewed. Overall, there was no difference in GR for applicants during in-person and virtual interviews in multivariable testing. UIM status had no association with GR for in-person interviews, but virtual interviews were associated with an increased GR for UIM applicants compared to non-UIM applicants (235.17; 95% CI 28.87-441.47; P=.02). For in-person interviews, applicants living in communities with poverty levels ≥7% had less GR vs those in communities with levels <7% (-332.45; 95% CI -492.10, -172.79; P<.001), an effect not observed during virtual interviews. Conclusions There was no difference in overall GR, or the proportion of UIM applicants or those from higher poverty level communities, but virtual survey interviews during the COVID-19 pandemic were associated with increased GR for UIM and from lower socioeconomic backgrounds applicants.

Association of Socioeconomic Factors and Severity of Bronchiolitis Hospitalizations.

It is unclear if socioeconomic status (SES) factors influence severity of illness of patients hospitalized with bronchiolitis. This study was conducted to identify SES factors including the Center for Disease Control and Prevention's Social Vulnerability Composite Index (SVI), estimated income, proportion of minority, proportion of living below poverty, insurance status, and number of household members associated with length of stay (LOS) and intensive care unit admission. Infants hospitalized at a tertiary care urban center for bronchiolitis were identified using International Classification of Diseases codes. Federal information processing system codes were identified from home address and paired with SVI and 2018 census tract. Other measures of SES were obtained from the Federal Financial Institutions Examination Council. Number of household members, insurance, age, sex, and history of prematurity were recorded from patient chart. Length of stay was modeled with mixed effects negative binomial regression and pediatric intensive care unit (PICU) admission with mixed effects logistic regression with random intercept at the census tract and adjustment for clinical factors. A total of 417 infants had median age of 144 days (interquartile range (IQR): 61, 357) and 136 (33%) were born premature. Median LOS was 62 hours (24, 136) with 97 (23%) patients admitted to the PICU. Median household members were 4 (4, 5). For each increase in household member, there was 7% increase in LOS (incidence rate ratio 1.07, 95% confidence interval: 1-1.14, P = .038). Social Vulnerability Composite Index, subcategories, insurance status, estimated income, percent of minority, and percent of poverty did not show any associations with length of hospitalization or PICU admission. Increasing number of household members may be associated with increased bronchiolitis hospital LOS. We find no associations with other SES measures.

Geographic Reach of Surgery Residency Interviews During In-Person and Virtual Interviews

INTRODUCTION: Virtual recruitment for Surgery residency may improve interview opportunities for applicants from URM and lower socioeconomic backgrounds. We aim to estimate the impact of virtual interviews for Surgery residency on applicants’ geographic reach. METHODS: Retrospective cohort of applications for surgery residency for the 2019 (in-person) and 2020 (virtual interviews) in an academic surgery residency. Geographic reach (GR) was the distance between applicants’ current location and Beth Israel Deaconess Medical Center where interviews were conducted. Demographics, USMLE scores and geographic distance to target program were collected. Federal Financial Institutions Examination Council’s (FFIEC) website was used to obtain socioeconomic data. Multivariable analyses with interaction terms were conducted. RESULTS: Six hundred sixty-seven and 698 applications were reviewed in the 2019 and 2020 match, respectively. Overall, there was no difference in GR for in-person and virtual interviews (p = 0.826). For non-URM applicants, virtual interviews had no impact on geographic reach (-52.57 miles, 95% CI -150.60-45.47; Table 4) while for URM applicants, virtual interviews increased GR by 240.14 miles (95% CI 7.55-472.72, p = 0.043). For applicants from communities with low poverty levels, virtual interviews decreased GR by 195.33 miles (95% CI 372.53-18.12, p = 0.0316) while for applicants from communities with high poverty levels, virtual interviews increased GR by 238.91 miles (95% CI 34.08-443.73, p = 0.022). Analyses controlled for USMLE Step 1 score (p > 0.05). CONCLUSION: Virtual recruiting might increase interview opportunities for surgery residency for applicants of URM and lower socioeconomic backgrounds. Educational leadership should optimize virtual recruitment opportunities as part of the strategies to promote diversity in surgical training.

The effect of locality of residence (LOR) and socioeconomic status (SES) on mortality in patients with squamous cell carcinoma of the head and neck (HNSCC): 20-year experience at the UPMC Hillman Cancer Center.

e19043 Background: As cancer centers expand, evaluation of potential disparities in outcomes amongst the catchment area is critically important. We examined the effect of LOR and SES on overall survival (OS) in HNSCC patients treated at HCC, which spans 29 counties in western Pennsylvania with diverse socioeconomic profiles across urban and rural localities. Methods: Retrospective review included patients with primary HNSCC (excluding M1 and recurrent disease) treated at HCC 1997-2018. Using Rural-Urban Commuting Area codes, LOR was classified as urban/suburban or rural according to ZIP code. SES was defined by medium income level (low, moderate (Mod), middle (Mid), Upper) via Federal Financial Institutions Examination Council geocoded census tract data. Kaplan-Meier methods and Cox regression models were used to evaluate OS. Results: 3512 patients were identified. Median age was 61, 72.7% male, 93.2% White, 18% HPV +, 75.5% urban/suburban, and by SES: 4% Low, 21% Mod, 46% Mid, and 19% Upper. Primary site included 35.2% oral cavity, 28.4% oropharynx, 28.1% larynx, 8.3% other, stage was majority III/IVa (61%), 66% had surgery and 54% received multimodality treatment (tx). While median OS differed significantly by race (Black: 5.8 vs. White: 7.3 years, p = 0.0457) and SES (Low: 4.1 vs. Mod: 5.3 vs. Mid: 7.3 vs. Upper: 9.1 years, p &lt; 0.0001), there was no difference by LOR (rural: 7.7 vs. urban/suburban: 7.2 years, p = 0.99). Multivariable Cox Regression showed lower SES was associated with a higher risk of death [(Low vs. Upper, HR: 1.416, 95% CI: 1.023-1.959) (Mod vs. Upper, HR:1.443, 95% CI: 1.214 – 1.716), p = 0.0004], adjusting for LOR and factors associated with OS in univariate analysis (age, smoking status, primary site, staging, tx, HPV status, race, and enrollment on clinical trial). The effect of LOR, race, and enrollment on clinical trial were not significant in multivariate analysis. Conclusions: SES was independently associated with OS in HNSCC patients treated at HCC, while LOR was not associated with OS. The lack of difference by LOR may be partially explained by HCC’s efforts to increase access to care throughout the catchment area by establishing community sites. However, a focus on improving outcomes for lower SES HNSCC patients is needed.

Net stable funding ratio and profit efficiency of commercial banks in the US

The net stable funding ratio (NSFR) was introduced under the Basel III accord to promote financial stability. Under this new international regulation, individual financial institutions are required to maintain a sustainable funding structure. Hence this new universal requirement is expected to materially affect bank operations. In this paper, we provide one of the first empirical examinations of the non-linear impact of the NSFR on profit (in)efficiency for commercial banks using two data sets from Bankscope (from 2000 to 2015) and the Federal Financial Institutions Examination Council call reports (between 2000–2013). Our results suggest that modest intensification in liquidity helps to reduce bank profit inefficiency (i.e. increase efficiency) but a too greater liquidity enlargement could increase inefficiency. This result is consistent with the trade-off hypothesis based on an assumption of a non-linear relationship between liquidity and bank performance

Using anti-money laundering measures to curb pension fraud in Nigeria

PurposeThe purpose of this paper is to propose a new approach to curbing pension fraud in Nigeria. The approach involves the use of anti-money laundering tools, procedures and expertise to advance the fight against pension fraud in Nigeria. The guidance is non-binding and does not override the purview of the National Pension Commission. The intention is to build on the revised procedures on the processing of death benefits and to complement existing circulars and guidelines issued by the National Pension Commission, including in particular the guidelines for compliance officers.Design/methodology/approachThe analysis took the form of a desk study, which analyzed various documents and reports, such as the Financial Action Task Force (2012-2018), International Standards on Combating Money Laundering and the Financing of Terrorism and Proliferation (the FATF Recommendations); the Financial Action Task Force Guidance on the Risk-Based Approach to Combating Money Laundering and Terrorist Financing: High Level Principles and Procedures; National Pension Commission Regulations for Compliance Officers; the Joint Money Laundering Steering Group Guidance for the United Kingdom Financial Sector Part I, June 2017 [Amended December 2017] and the Federal Financial Institutions Examination Council (FFIEC) Bank Secrecy Act/Anti-Money Laundering Examination Manual 2014.FindingsThis paper determined that a strong due diligence process where the owner of the pension account and the next-of-kin/legal beneficiary are duly identified before the establishment of a business relationship is capable of reducing the risks associated with pension fraud to the barest minimum. This paper also determined that anti-money laundering measures, such as record keeping, suspicious transactions reporting, training for anti-fraud/money laundering compliance and an independent audit of systems and controls can help curb pension fraud.Research limitations/implicationsPension fraud involves the use of deceit or misrepresentation in connection with a pension claim. There are many different kinds of pension fraud, but the type where the fraud is aimed at stealing a person’s pension funds is what this paper is concerned with.Originality/valueAlthough most publications on pension fraud are focused on anti-fraud measures, this paper focuses on the anti-money laundering measures which can be used by Pension Fund Administrators to curb pension fraud.

Using Anti-Money Laundering Measures to Curb Pension Fraud in Nigeria

PURPOSE – This paper proposes a new approach to curbing pension fraud in Nigeria. The approach involves the use of anti-money laundering tools, procedures and expertise to advance the fight against pension fraud in Nigeria. The guidance is non-binding and does not override the purview of the National Pension Commission. The intention is to build on the revised procedures on the processing of Death Benefits and to complement existing circulars and guidelines issued by the National Pension Commission, including in particular the guidelines for Compliance Officers. DESIGN/METHODOLOGY/APPROACH – The analysis took the form of a desk study, which analyzed various documents and reports such as the Financial Action Task Force (2012-2018), International Standards on Combating Money Laundering and the Financing of Terrorism & Proliferation (the FATF Recommendations); the Financial Action Task Force Guidance on the Risk-Based Approach to Combating Money Laundering and Terrorist Financing: High Level Principles and Procedures; National Pension Commission Regulations for Compliance Officers; the Joint Money Laundering Steering Group Guidance for the United Kingdom Financial Sector Part I, June 2017 [Amended December 2017] and the Federal Financial Institutions Examination Council (FFIEC) Bank Secrecy Act/Anti-Money Laundering Examination Manual 2014. FINDINGS – This paper determined that a strong due diligence process where the owner of the pension account and the Next-of-Kin/legal beneficiary are duly identified before the establishment of a business relationship is capable of reducing the risks associated with pension fraud to the barest minimum. This paper also determined that anti-money laundering measures like record keeping, suspicious transactions reporting, training for anti-fraud/money laundering compliance and an independent audit of systems and controls can help curb pension fraud. RESEARCH LIMITATIONS – Pension fraud involves the use of deceit or misrepresentation in connection with a pension claim. There are many different kinds of pension fraud, but the type where the Fraud is aimed at stealing a person’s pension funds is what this paper is concerned with. ORIGINALITY/VALUE – While most publications on pension fraud are focused on anti-fraud measures, this paper focuses on the anti-money laundering measures which can be used by Pension Fund Administrators to curb pension fraud.

The Community Reinvestment Act: What Do We Know, and What Do We Need to Know?

ABSTRACTThe Community Reinvestment Act (CRA) was enacted in 1977 to encourage depository institutions to meet the credit needs of their communities. In 2018, the Office of the Comptroller of the Currency put out an advance notice of proposed rulemaking to gather feedback on how the CRA could be modernized. The 1,485 comment letters make clear there is no consensus on what modernization means. We argue that any revision of the regulations would be more effective if it had strong grounding in facts about current CRA lending. Using 2016 Home Mortgage Disclosure Act data and 2016 Federal Financial Institutions Examination Council loan files, we assess what we know about CRA lending from existing data sources and what we could analyze if we had more data and increased transparency on the data that are already collected.

Banking on burden reduction: how the global financial crisis shaped the political economy of banking regulation

The Economic Growth and Regulatory Paperwork Reduction Act (EGRPRA) of 1996 requires the Federal Financial Institutions Examination Council—an interagency council composed of US banking regulators—to conduct decennial retrospective reviews of existing banking regulations, with an emphasis on reducing regulatory burden. EGRPRA reviews provide a lens to study the political economy of banking regulation before and after the global financial crisis (GFC) of 2007–2009. Through comparative case studies of EGRPRA reviews in 2007 and 2017, this article documents how ex post impact assessment of banking regulation and stakeholder participation in banking regulatory processes have changed over the last 10 years. Using within-case process tracing and content analysis of an original dataset of government documents and public input, this article analyzes the extent to which changes in review processes, participation, and outcomes can be attributed to the policy shock of the GFC and/or shifting political, regulatory, and/or market contexts. The results suggest that government–market interactions have changed considerably since the GFC and that regulatory politics explain many of these changes. While retrospective review and stakeholder participation therein may enable more effective and legitimate regulations and rulemaking processes, much work remains to realize these potential benefits in banking regulation.

Did the regulatory changes of 1999 and 2001 affect income smoothing behavior of US banks?

This study examines the impact of the regulatory changes introduced by the Federal Financial Institutions Examination Council (FFIEC) in 1999 and by the Securities and Exchange Commission and FFIEC in 2001 on the income smoothing approaches and mechanisms employed by the United States (US) banking industry. We find that the relationship between previous quarter charge-offs and current quarter recoveries that was prevalent in the 1990’s to be insignificant for homogeneous loans but for heterogeneous loans the relationship became significant in the years following the regulatory changes. Recoveries are positively and significantly associated with the surprise net interest margin or return on assets which implies recoveries are primarily determined by the economic realities of the charged-off loans. The regulatory changes have strengthened the relationship between current quarter recoveries from heterogeneous loans and current quarter charge-offs but for homogeneous loans this relationship weakened insignificantly. The new regulations reduced the surprise gross loan charge-offs suggesting that the enforcement improved the accuracy of the provision as a predictor of next quarter’s gross loan charge-offs.

The Use of Credit Derivatives and Banks′ Risk Taking Behaviours

Abstract Credit derivatives are financial innovations that allow transferring credit risks separately from ownership. There is a common notion that credit derivatives are useful instruments in banks′ credit risk management. However, the current credit crisis has raised a doubt towards the perception that credit derivatives make banks sounder. This paper presents empirical evidence about the effects of the use credit derivatives on banks′ risk-taking behaviours. The study uses data of 179 large U.S. commercial banks that report to the Federal Financial Institutions Examination Council, with total assets at the end of 2009 equal or greater than 3 billion dollars. The methodology used is quantitative analysis methods - the “pooled” OLS regression. In consistent with existing literature, the results strengthen the statement that the use of credit derivatives does increase banks’ risk-taking. Particularly, the volume of net credit derivatives bought is the dominant contributor.

Cybersecurity as a global concern in need of global solutions: an overview of financial regulatory developments in 2015

Purpose To provide financial institutions an overview of the developments in cybersecurity regulation of financial institutions during 2015 by the United States, the United Kingdom, and the European Union, as well as guidance for developing effective cyber-risk management programs in light of evolving cyber-threats and cyber-regulatory expectations. Design/methodology/approach Reviews US, UK and EU regulatory developments in the cybersecurity area and provides several best practice tips financial institutions should consider and implement to improve their cybersecurity compliance programs. Findings While cyber-threats and financial regulators’ expectations for cyber-security are constantly evolving, recent guidance and enforcement efforts by the US, UK and EU illustrate the need for financial institutions to develop effective cybersecurity programs that address current regulatory compliance requirements and prepare for emergency cyber responses. Practical implications Financial institutions should utilize the Federal Financial Institutions Examination Council’s Cybersecurity Assessment Tool to assess their cyber-risk profile and cyber-preparedness. Originality/value Practical guidance from experienced financial regulatory and privacy lawyers that provides a survey of the current regulatory environment and recommendations for cyber-security compliance.

The Use of Credit Derivatives and Bankss Risk Taking Behaviours

Purpose -- Credit derivatives are financial innovations that allow transferring credit risks separately from ownership. There is a common notion that credit derivatives are useful instruments in banks’ credit risk management. However, the current credit crisis has raised a doubt towards the perception that credit derivatives make banks sounder. This research presents empirical evidence about the effects of the use credit derivatives on banks’ risk-taking behaviours.Data and methodology -- The study uses data of 179 large U.S. commercial banks that report to the Federal Financial Institutions Examination Council, with total assets at the end of 2009 equal or greater than 3 billion dollars. The methodology used is quantitative analysis methods -- the “pooled” OLS regression. Findings -- In consistent with existing literature, the results strengthen the statement that the use of credit derivatives does increase banks’ risk-taking. Particularly, the volume of net credit derivatives bought is the dominant contributor.

Net Interoffice Accounts of Global Banks: The Role of Domestic Funding

Existing literature has identified domestic restrictive monetary policy and deteriorating funding conditions as the predominant factors explaining the increase in net interoffice accounts of global banks, that is, the net liabilities of parent offices due to their related foreign offices. The purpose of this research is twofold. Firstly, it quantifies the responsiveness of net interoffice accounts to variations in different types of domestic funding. Secondly, the paper assesses whether the relationship between net interoffice accounts and domestic policy-steered rates depends on cross-sectional differences in the funding structure of global banks. Using US banks’ balance sheets data collected by the Federal Financial Institutions Examination Council, the results highlight the importance of domestic repo borrowings in explaining net interoffice accounts, especially for larger banks during the crisis. On the other hand, a negative relationship between policy rates and net interoffice accounts is observed only for those global banks with a relatively higher share of repo borrowings.

Authentication and protection for e-finance consumers: the dichotomy of cost versus ease of use

Multifactor authentication is a tool to combat identity theft and is mandated by the Federal Financial Institutions Examination Council. However, there are only a few US financial institutions that have implemented two-factor authentication. A goal for financial institutions is to provide both a secure and easy-to-use system for customers. This article describes web authentication technologies that are currently available to financial institutions and provides an interpretation of survey results to identify the perceptions/expectations of online customers. In our online banking customer survey, we found that online banking customers are willing to sacrifice some ease-of-use for more secure online banking transactions.

The State of Information Security Law: A Focus on the Key Legal Trends

Information security is rapidly emerging as one of the most critical legal issues facing companies today. Concerns regarding corporate governance, individual privacy, accountability for financial i...

The 2007 HMDA Data

The Home Mortgage Disclosure Act of 1975 (HMDA) requires most mortgage lending institutions with offices in metropolitan areas to publicly disclose information about their home-lending activity. The information includes characteristics of the home mortgages that lenders originate or purchase during a calendar year, the geographic location of the properties related to these loans, and demographic and other information about the borrowers.1 The disclosures are intended not only to help the public determine whether institutions are adequately serving their communities’ housing finance needs but also to facilitate enforcement of the nation’s fair lending laws and to inform investment in both the public and private sectors. Under the 1975 act, the Federal Reserve Board implements the provisions of HMDA through regulation.2 In addition, the Federal Financial Institutions Examination Council (FFIEC) is responsible for collecting the HMDA data and facilitating public access to the information.3 Each September, the FFIEC releases summary tables pertaining to lending activity from the previous calendar year for each reporting lender and an aggregation of home-lending activity by metropolitan statistical area (MSA).4 The FFIEC also makes available a consolidated data file containing virtually all the reported information for each lending institution.5 The HMDA data consist of information reported by about 8,600 home lenders, including all of the nation’s largest mortgage originators. The loans reported are estimated to represent about 80 percent of all home lending nationwide; thus, they likely provide a broadly representative picture of home lending in the United States. This article presents key findings from the 2007 HMDA data. In doing so, it highlights the notable changes in relationships that are revealed when the 2007 data are compared with data from earlier years.6 Because of the importance of the loan-pricing information included in the HMDA data and because of the recent turmoil in the residential mortgage market, particularly the higher-priced segment of the market, much of the focus here is on the data pertaining to that market segment.7

The 2006 HMDA Data

Since 1975, the Home Mortgage Disclosure Act (HMDA) has required public disclosures from most mortgage lending institutions with offices in metropolitan areas. The release of the information, which includes the geographic location and other characteristics of the home mortgages lenders originate or purchase during a calendar year, is intended to help the public determine whether institutions are adequately serving their communities&amp;#x27; housing finance needs; the disclosures are also intended to facilitate enforcement of the nation&amp;#x27;s fair lending laws and guide investment in both the public and private sectors. Under the 1975 act, the Federal Reserve Board implements the provisions of HMDA through regulation. The Federal Financial Institutions Examination Council (FFIEC) is responsible for facilitating public access to the HMDA data and for aggregating the data by metropolitan statistical area.

Two-factor authentication – a look behind the headlines

Statements which have appeared in recent months about two-factor authentication are not just incorrect - they are irresponsible. Oversimplification of the October 2005 Federal Financial Institutions Examination Council (FFIEC) recommendations has recently lead to sensational headlines. Another view needs to be voiced.