"Our goals are the same": veteran bank examiner Stephen Jenkins enjoys his RMA interaction with bankers

RMA Journal, The, April, 2003 by Carol McGinn

The potentially adversarial relationship between regulator and banker is a thing of the past, and rightfully so, says Stephen Jenkins, vice president, Federal Reserve Bank of Cleveland, and president, RMA's Northern Ohio Chapter.

"Both bankers and regulators realize that our goals are the same," he says. "We both want the banks to be profitable, to meet the credit needs of their communities, and to be well run from a risk management standpoint."

At the Fed, Jenkins is responsible for the supervision and regulation of state member banks, bank holding companies, and certain nonbank activities. A former field examiner for the Office of the Comptroller of the Currency and now with the Fed for the past 16 years, Jenkins understands what his team of examiners face during each examination.

"I enjoyed my time in the field," he recalls. "It was interesting to go to the different institutions and see how banks operated."

As with most bankers, there is no "typical" day for Jenkins; any day has the potential for surprises. However, Jenkins says that most days he has a lot of interaction with bankers and examiners, often discussing the results of an examination with both parties.

"At the end of an examination, a report goes to the bank's officers and board of directors for their review," Jenkins explains. "I will attend the bank board meeting and review the report with the directors so that we can work together to enact changes."

Jenkins is seeing continued consolidation, albeit at a slower pace than five years ago, and banks have entered such new activities as merchant banking and capital markets. Regulators must keep tip with these changes, especially when it comes to training.

"We now must hire people with knowledge of certain businesses, such as insurance, and of course we emphasize continuing education. It's critical for examiners to keep tip their skills," Jenkins says.

Technology has improved the examination process, Jenkins adds. "Banks can now provide us with loan information electronically so we can do our homework before visiting the institution. It also reduces the time to do the examination and reduces the burden of the bank having the examiners there for a longer period of time."

Jenkins has developed some excellent verbal and written communication skills on the job. He says he also needs to be flexible and adaptive and to possess sound judgment. "I need to be able to analyze a situation quickly and make a judgment and move on to something else, to use my resources wisely," he adds.

An RMA member for six years, Jenkins is serving his second term as president of the Northern Ohio Chapter. "I got involved because I thought RMA's mission statement outlined to me what's important to a regulator, that is, sound risk management. I also like being able to interact with bankers outside the examination process in a more informal setting."

Jenkins finds his fine-tuned job skills useful as an RMA volunteer. "As a chapter leader, you need to keep people motivated and hold them accountable, even when you're not paying their salaries," he laughs.

McGinn is a Ft. Washington, Pennsylvania-based freelance writer and desktop publisher specializing in financial and business topics.