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During Thomas Flattery's 14 years as a Federal Reserve examiner, the Brooklyn, New York, native found that some of his biggest battles weren't with the banks, but with other on-site regulators that tried to help the institution stave off an honest assessment of its compliance deficiencies. These embedded "point of contact" examiners sometimes would tell their counterparts in the Fed office that a bank warranted a clean bill of health even when there was reason to believe the institution violated some regulations, said Flattery, who now runs a consulting firm, TMF & Associates, in Hayworth, New Jersey. In the early...