The CSBS Accreditation Process
By: Erik Berggren, Review Examiner
What comes to mind when you hear the word "accredited" or "accreditation"? If you have spent any time searching for a prospective college or university for one of your children to attend, an accredited institution is one of the first criteria you might look for. Or, if you or someone you know has recently been the recipient of some medical services, perhaps you learned that the hospital, doctor, or nurse carried some form of accredited status. A quick Google search of "accredited" produces a list of over 12,600,000 links. Rest assured, I did not take the time to peruse the entire list, but I did browse the list long enough to get a glimpse of what entities and people can be accredited. A small sample of what I found includes: child care facilities, athletic trainers, summer camps, libraries, hospitals, nurses, architects, foresters, surveyors, gem appraisers, colleges and universities, high schools, buyer representatives, investors, and types of lenders.
How much time you devote to following the links to learn of or confirm the accredited status of someone or something of interest to you is your decision, but if you want to confirm that the OSBC is accredited, look no further. You will be happy to know that the OSBC was first accredited by the Conference of State Bank Supervisors (CSBS) on May 26, 1995, and was re-accredited April 10, 2001. The original framed certificate hangs in what we call "the secured room" of the OSBC's main office, and the most current framed certificate hangs in the lobby area of our main office. Be sure to take note of it, and the plaques evidencing annual renewal, next time you visit. The OSBC is one of 44 state banking departments that have been accredited by CSBS. Accreditation through CSBS is voluntary, and is not a requirement of our membership in CSBS.
In order to obtain accreditation from the CSBS, the OSBC must successfully complete the steps composing the CSBS Accreditation Program. This program consists of an intensive self-evaluation process and annual renewals thereafter. Additionally, once accredited, the self-evaluation process must be successfully completed every fifth year. Since the OSBC was first accredited in 1995, you would be correct in concluding that 2005 is a year the OSBC will go through the self-evaluation portion of CSBS's Accreditation Program. We received our self-evaluation questionnaire October 8, 2004, will submit a completed questionnaire April 9, 2005, undergo an on-site evaluation starting May 9, 2005, and then await the results, which will likely be sometime after June 2005.
The self-evaluation process is quite extensive and perhaps somewhat comparable to full-scope examinations conducted by our examining staff. First, the OSBC must complete and submit a very detailed and comprehensive self-evaluation questionnaire - 62 pages in length before we have answered any of the questions. The questionnaire focuses on the following areas: Department Administration/Finances; Personnel; Training; Examination; Supervision; and Legislative Powers. The questionnaire also measures the OSBC against the CSBS list of the "Best Practices" state banking departments should implement concerning each of the focus areas previously mentioned. This questionnaire is submitted to the CSBS Performance Standards Committee, which then schedules a time for a Review Team to conduct an on-site evaluation of our department. The Review Team typically includes at least one former state bank regulator (not from Kansas), and one or two former regulators from the FDIC, the FRB, or the OCC. The on-site review usually occurs about one month after the questionnaire is submitted and spans the better part of a week. During this time, the Review Team reviews department records, scrutinizes policies, and conducts interviews of personnel and management. The Review Team then writes a report they submit to the CSBS Audit Team - a two or three member team comprised of current or former bank regulators from state and federal regulatory agencies. The CSBS then communicates the results to our department.
The annual renewal process is not as intense. It typically consists of a questionnaire focused more on statistical information concerning budget, personnel, financial institution data, examinations, and significant changes involving any of the six focus areas detailed in the previous paragraph. Results of this process consists simply of a written communication from CSBS that the OSBC has or has not achieved renewal of its accredited status, along with a certificate suitable for framing.
Both of these processes (self-evaluation and renewal) usually result in exposing matters and/or areas that the OSBC should strive to address and/or implement. Some of these matters are easily resolved, others are of longer duration. In any case, the CSBS is achieving its goal of encouraging state banking departments to enhance their capability to promote safe and sound banking with a minimum of regulatory burden and cost. And, the OSBC is voluntarily and successfully participating in an accreditation program that promotes its success in achieving its stated goals: 1) ensuring the fair and reliable supervision of state chartered banks, trust companies/departments, savings and loans, and suppliers of mortgage and consumer credit; 2) educating regulated entities to promote a better understanding of and compliance with governing laws and regulations; 3) protecting Kansas consumers from unfair or unscrupulous credit practices; 4) preserving the dual banking system through chartering of new state banks, maintenance of existing state charters, and equitable regulation of state banks; and 5) promoting and maintaining the public's trust in a state financial system.
