Review the following documents to identify any previously identified problems related to the floor plan lending area that require follow-up:

• Previous examination reports.

• Management’s responses to previous examination findings and other bank correspondence.

• Ongoing supervisory comments.

• Working papers from previous examinations.

• Internal loan review reports.

• Internal and external audit reports.

(Note: If an examiner is assigned “Internal and External Audit,” a copy of any significant deficiencies for this area should be obtained from that examiner. If Internal and External Audit is not part of the overall scope of the examination, review the work performed by the internal and external auditors in this area and obtain a list of any deficiencies noted in their most recent review.)

Review the Uniform Bank Performance Report (UBPR), BERT, and the bank’s current risk assessment to identify trends within the portfolio.

Obtain and analyze reports management uses to supervise floor plan lending:

• Schedule of curtailment requirements for each dealer.

• Schedule of approved floor plan lines for each dealer including outstanding balances.

• Delinquent curtailment billing report.

• Drafting agreements and amount of outstanding drafts.

• Delinquent interest billings, date billed, and amount of past due interest.

• Risk rating reports.

The analysis should consider:

• Growth and acquisitions.

• New product and services for floor plan lending.

• Management changes.

• Policy and underwriting changes.

• Changes in risk limits.

• • Changes in such external factors as:

• National, regional and local economy.

• Competition.

Obtain from the examiner assigned “Loan Portfolio Management” the following schedules, if applicable to this area:

• Past due loans.

• Exception reports.

• Participations purchased and sold since the preceding examination.

• Loans sold in full since the preceding examination.

• Loan commitments and other contingent liabilities.

• Extensions of credit to major shareholders, employees, officers, directors, and/or their interests.

• Extensions of credit to officers and directors of other banks.

• Miscellaneous loan debit and credit suspense accounts.

• Loans considered “problem loans” by management, denoting those loans added by officer/management since the last examination.

• Loans classified during the preceding examination.

• Information on directors, executive officers, principal shareholders, and their interests.

• Each officer’s current lending authority.

• Current interest rate structure.

• Any useful information obtained from the review of the minutes of the loan and discount committee or any similar committee.

• Reports furnished to the loan and discount committee or any similar committee.

• Reports furnished to the board of directors.

• A listing of rebooked charged-off loans.

Determine, during early discussion with management:

• How management supervises floor plan lending.

• Any significant changes in policies, practices, personnel, and control systems.

• Any internal or external factors that could affect floor plan lending.

• Management’s perception of the credit culture for floor plan lending.

Based on the findings and analyses of the previous steps and in consultation with the EIC and other appropriate supervisors, determine the scope of this examination.

Select from among the following examination procedures those steps that are necessary to meet examination objectives. Examiners should tailor the procedures to the risks identified in their findings and analyses discussed with the EIC. Note: Examiners will seldom be required to complete every step.

As the examination procedures are performed, test for compliance with all applicable laws, rules, and regulations and with established policies. Confirm the existence of appropriate internal controls. Identify any areas that have inadequate supervision or pose undue risk, and discuss with the EIC the need to perform additional procedures or testing.