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197104049428BORROWER-IN-CUSTODY (BIC) PROGRAMAUDIT CERTIFICATION00BORROWER-IN-CUSTODY (BIC) PROGRAMAUDIT CERTIFICATIONPart I: Institution OverviewDateABA NumberInstitution NameMailing AddressCity/State/ZipContact (OC-10/Other BIC Contacts)Name/TitleName/TitlePhonePhoneEmailEmailPart II: Pledge Arrangement OverviewIndicate the loan types that your institution is currently pledging (check all that apply):FRB Loan CategoryFFIEC Call Report CodesNCUA Call Report CodesFBO Call Report Codes?Agricultural Loans (705):31.g. & 2.g.8?Agricultural Loans secured by farmland (780):1.b.1.b. & 2.b., 111.b.?Commercial Leases (710):10.b.NA9.a.2?Commercial Loans (710):4. 4.a., 9. 9.a 9.b 9.b(1) 9.b(2), 2. 2.a.(1) 2.a.(2) 2.a. 2.b.1.h., 1.j., 1.i., 2.h., 2.j., 2.i., 132.a.(1), 2.a.(2), 2.b., 3., 4.a., 7., 8.2?Commercial Real Estate Loans (780):1.e.(2)1.e. & 2.e., 11, 121.e.?Construction Loans (790):1.a.(1) & 1.a.(2)1.a. & 2.a.1.a.?Consumer Leases—Auto, Marine (743):10.a.79.a.2?Consumer Loans—Secured Auto, Marine (741):6.c. & 6.d.5, 6, 882?Consumer Loans—Unsecured (740):6.b. and 6.d.482?Home Equity Loans or Lines (760):1.c.(1) & 1.c.(2)(b)101.c.(1), 1.c.(2) 2?Mortgage 1-4 Family Loans (750):1.c.(2)(a)91.c.(2)?Multifamily 5+ Mortgage Loans (780):1.d.1.c., 2.c.1.d.?Municipalities Loans (550):8NA82?Owner Occupied CRE (780):1.e.(1)1.d. & 2.dNA?Raw Land Loans (791):1.a.(2)1.a. & 2.a., 111.a.?Student Loans (744):6.d.3NA?US / US Agency Guaranteed Loans (720 ):Gtd loan amountsPart III: Documentation and Perfection OverviewAre documentation exceptions tracked (e.g., missing notes, insurance, etc.)?? Yes? No? No ChangeIf yes, are there procedures in place for tracking exceptions?What is the name of the tracking system?Are there procedures to remove loans with documentation exceptions from the monthly pledge listing? ? Yes? No? No ChangeAre pledged loan documents imaged?? Yes? No? No ChangeIf yes, and there are no changes to the most recent submission of the BIC Imaging Questionnaire indicate “No Change” above. If yes and there are updates to the last submission of the BIC Imaging Questionnaire, complete and submit the form located at the pledged loans designate your institution as lender or payee? ? Yes? No? No ChangeIf not, then which entity originated the loans (i.e. affiliate or subsidiary of the institution, dealership – indirect loans, or other)?If not, then how are the loan assignments or transfers evidenced? Is the institution pledging the following to the FRB? Loan participations/syndications(If yes, complete Audit Addendum section 1 at the end)? Yes? No? No ChangeDealer floor plan loans(If yes, complete Audit Addendum section 2 at the end)? Yes? No? No ChangePart IV: Collateral Management OverviewIs the Appendix A location(s) correct and up to date? ? Yes? No? No ChangeIf no, explain why, and action/next steps taken to update the Appendix A: Does the latest BIC-1 transmittal form indicate the current location(s) of all pledged collateral? ? Yes? No? No ChangeIf no, explain why, and action/next steps taken to ensure correct locations are reflected on the BIC-1 transmittals:Describe the physical storage facility where the original loan documents are held for:Promissory notes:Security/collateral agreements:Credit files:Has the location of the pledged loan documents changed since the last BIC Audit Certification? ? Yes? NoIf yes, when did the change in location occur, and was notification given to the Reserve Bank prior to the move?Does the institution monitor access and removal of key loan documents held in the storage area(s)?? Yes? No? No ChangeIf yes, describe the monitoring process:In general, how much time elapses from loan origination until storage of the documentation in the storage area(s)?Does the institution use a third party service provider for the maintenance or storage of pledged loan documents? (including any electronic/hard copy Certificate of Titles)? Yes? No? No ChangeIf yes, does Audit, or a similar function, periodically conduct a review of the third party service provider?What was the date of the last audit (excluding FRB BIC Review) relating to the pledged loans or the relevant loan operations area(s)? Provide a copy of the most recent audit report. [If applicable, include information for internal/external review of third party servicer]Detail any findings and/or observations noted in the most recent audit report, as well as management’s responses to address the findings and/or observations.Are personnel involved in the daily maintenance of loans familiar with the terms and conditions of the BIC program?? Yes? No? No ChangeAre there internal procedures in place relating to the BIC program?? Yes? NoIs any collateral being pledged to the FHLB or another lender?? Yes? No? No ChangeIf yes, what is/are the name of the lender(s) and how does the institution distinguish between collateral pledged to the FRB and the other lender?Are loans sold to other entities?? Yes? No? No ChangeIf yes, how does the institution ensure that pledged loans are not sold to other entities?Part V: Monitoring and Maintenance OverviewAre pledged loans subject to your institution’s internal loan grading/risk rating system?(If no, proceed to question 3)? Yes? No? No ChangeHave there been any changes to the loans grading/risk system since the most recent examination conducted by your institution’s regulator or last BIC Audit Certification submission?? Yes? No? No ChangeIf yes, then when did change(s) occur; provide the current risk ratings with the completed audit certification.How does your institution monitor for bankruptcies, foreclosures, changes in credit grades, and delinquencies, and how are these loans removed from the monthly pledge listing? ? No ChangeDescribe the process of gathering information for the monthly pledge listing and communicating submission to internal parties: ? No ChangeInstitutions are required under the BIC Guidelines to monitor the outstanding balance of pledged loans to ensure that the aggregate balance does not decrease by 10% or more between reporting periods. Describe your institution’s monitoring process, including frequency and department/individual(s) responsible:? No ChangeHow does your institution ensure compliance with the latest Federal Reserve’s Collateral Guidelines: Acceptance Criteria for Individual Loans? ? No ChangePart VI: MiscellaneousDo obligation (loan) numbers contain customer deposit account or social security numbers?? Yes? No? No ChangeIn the next twelve months, do you anticipate any changes that would affect the administration of the BIC program by the Institution?Part VII: CertificationI certify that all information provided in this Audit Certification is complete and truthful.I acknowledge that if the institution holds pledged loan documents with a third party custodian, the Federal Reserve Bank of San Francisco may contact the custodian directly to request certain information regarding their policies and practices.?I certify that all relevant internal policies and procedures have been reviewed and examined for the BIC Program and confirm this institution to be in compliance with the BIC Guidelines. Authorized Signature*_________________________________________Date____________________Print Name__________________________________________________________________________Print Title_____________________________________________Appointed by Board of Directors? ? Yes ? No*The Audit Certification must be signed by the institution’s internal or external auditor, Chair of the Board of Directors, or Chair of the Audit Committee. For smaller institutions that are not required by their primary regulator to have an internal audit function, the Audit Certification may be signed by an executive officer. Contact FRBSF for any questions at sf.crmcco@sf.. Please Return the Completed and Signed Certification to:sf.crmcco@sf.or: Credit Risk ManagementFederal Reserve Bank of San Francisco101 Market Street, Mailstop 830San Francisco, CA 94105AUDIT CERTIFICATION ADDENDUMSection 1: Participation or Syndication LoansAre pledged loans originated by the institution or purchased? Does the institution have copies of the loan documents and an origination participation certificate/agreement to evidence its interest? If no, then explain:If the institution originated these loans, does it have possession of the original loan documents and original participation agreement? If no, then explain:Are there any restrictions in the participation certificates/agreements that would limit or restrict assignability, transfer, sale or pledging? If yes, then explain:Are there further obligations to lend funds under these participations? If yes, then explain:Only the portion of a participation retained or purchased by the FI is eligible for pledging to the FRB. Explain the process for ensuring that the retained/purchased balance is reported accurately on the pledge listing:Section 2: Dealer Floor PlansHas the institution, and/or its Board of Directors, adopted a written floor plan loan policy? If yes, then submit a copy of the policy. ................
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