BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON, D. C.  20551
			DIVISION OF BANKING SUPERVISION AND REGULATION
			SR 98-37 (SPE) December 23, 1998

	TO THE OFFICER IN CHARGE OF SUPERVISION           AT EACH FEDERAL RESERVE BANK SUBJECT: Uniform Interagency Trust Rating System SUMMARY:  On October 13, 1998 the Federal Financial Institutions Examination Council (FFIEC) issued modifications to the Uniform Interagency Trust Rating System (UITRS).1  The revised UITRS, provided in the attached Federal Register notice, becomes effective January 1, 1999, and is to be used for all Federal Reserve examinations of fiduciary activities commencing on or after that date.                     The banking agencies originally adopted UITRS in 1978.  Since then, a number of changes have occurred in the fiduciary industry and in supervisory policies and procedures, prompting the current revisions.  The major revisions to the UITRS include the following: The definitions of the composite and component ratings have been revised to align the UITRS rating definitions with the language and tone of the CAMELS and BOPEC ratings. The Account Administration and Conflict of Interest rating components have been combined into a new Compliance component.  This component also addresses an institution's compliance with applicable laws, regulations, and internal policies and procedures on a broader, institution-wide basis. A rating is required to be assigned to the Earnings component only for those institutions that are required to file Schedule E of the FFIEC 001 report. The revised rating system emphasizes the importance of sound risk management processes.                     The Federal Reserve Implementing Guidelines are also attached and provide further clarification on certain aspects of the UITRS and implementation of the revised rating system.  Reserve Banks are asked to provide a copy of the revised rating system to each state member bank and non-deposit trust company in their district under the supervision of the Federal Reserve.  A suggested transmittal is attached for this purpose.                     Should your staff have any questions, please have them contact Michael Martinson, Deputy Associate Director, at 202-452-3640, Heidi Richards, Manager at 202-452-2598, or William Stanley, Supervisory Trust Analyst, at 202-452-2744. Stephen C. Schemering Deputy Director Attachments Revised Uniform Interagency Trust Rating System (35 KB PDF) Federal Reserve Implementing Guidelines (9 KB PDF) Suggested Transmittal Letter (7 KB PDF) Supersedes:   SR letter 82-28 Cross-References:   AD letter 98-15 SR letter 96-26 Notes 1.   63 Federal Register 54 704 (October 13, 1998).  Return to text
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