On why this doesn't make sense: This doesn't make a lot of sense, as sampling post-Enron (not just banks, anyone), should follow a SOX-404 type of methodology

On why this doesn't make sense: This doesn't make a lot of sense, as sampling post-Enron (not just banks, anyone), should follow a SOX-404 type of methodology (and banks internally, at least in the US, tend to follow this sampling methodology). On why this does make perfect sense: What might have really happened is the bank didn't want to push this, as the regulator were holding something else to their head, or might hold something else to their head (which they may also be unaware of) and [the bank] wants to be seen as a cooperative, not uncooperative, institution. This is extremely likely. It isn't like a regulatory body can instantly understand a bank's business. They can't come in at a micro-level and try to understand the books (at least, for a larger bank). There's not the organisational understanding level there. So, an uncooperative institution gets hit by fines and warnings against directors. Small level non-infraction which may blow-up later (related or unrelated), the bank thinks just take the hit and don't fight it. A smaller organisation may really be worried they're not doing something right (but they don't know what) so this gives some time to get things in order. A larger organisation... similar. This also benefits the regulators (not to push if the bank put up their hands for a minor crime) as it is super easy for a highly complex organisation to obstifucate things later, if they want to, if they see the regulator as somewhat pesky. In this case, the regulator will have to be extremely sure of their case and push things through legal channels often at a country's executive level, and then things also get difficult. For the case of a rural credit cooperative, the regulator may see them as a general social good (as in 'good thing') but needing to be punched on the nose a few times to keep in line. And then there's internal pressure and politics within a regulator of what 'good' actually is. >a bank or credit union's best bet is to use the power of business intelligence to continually prove that it is lending fairly in the community and climate that it dwells Completely agree.