Question

Pursuant to the requirements of 12 CFR 9.9, the Trust Audit Committee of a national bank must report specifically in writing to the Board of Directors:

a. the number regulatory violations disclosed by internal/external audits during the audit year.
b. whether fiduciary activities are being administered in accordance with law, 12 CFR 9 and sound fiduciary principles.
c. the criminal violations disclosed by internal/external audits during the audit year.
d. the results of audits (annual and continuous) including significant actions taken as a result of audit.

Answer 1

The Trust Audit Committee of a national bank must report to the Board of Directors about whether fiduciary activities comply with the law, 12 CFR 9, and sound fiduciary principles, to ensure safe banking operations.

Step-by-step explanation:

Under the requirements of 12 CFR 9.9, the Trust Audit Committee of a national bank is required to report specifically in writing to the Board of Directors about whether fiduciary activities are being administered by law, 12 CFR 9, and sound fiduciary principles. The regulation is aimed at ensuring that national banks operate safely and soundly, particularly in their capacity as fiduciaries, which includes the role of managing trusts and assets on behalf of others.

This regulation falls under the broad supervision of banks and the role of the Board of Directors and the audit committee in overseeing that banks comply with applicable laws and principles to maintain positive net worth and manage risks appropriately, which is essential for the stability of the financial system, as highlighted by lapses preceding the 2008-2009 recession.