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GGD-95-181R 1 (1995-08-17)

handle is hein.gao/gaobackxh0001 and id is 1 raw text is: ,I United States General Accounting Office Washington, D.C. 20548 General Government Division B-259980 August 17, 1995 Mr. Joe M. Cleaver Executive Secretary Federal Financial Institutions Examination Council Dear Mr. Cleaver: This letter provides our observations on federal financial regulators' practices for screening applicants for director and senior bank executive positions under section 32 of the Federal Deposit Insurance Act. In implementing the law, federal bank and thrift regulators are to screen applicants' qualifications, background, and experience prior to their appointment or employment by insured depository institutions and holding companies falling into certain specified categories, such as newly formed or troubled institutions. We self-initiated work on this issue because of continued congressional interest in (1) the safety and soundness of financial institutions and (2) the fostering of uniform regulatory principles and supervision. Overall, we observed that the four regulators follow somewhat different requirements and practices when processing the section 32 notices that certain banks, thrifts, and holding companies must submit to regulators prior to appointing or employing senior bank officials. Specifically, we noted differences in the extent of information that regulators require for assessing applicants' qualifications for director and senior executive positions. We also noted that regulators follow different practices when required background checks take longer than the statutorily prescribed 30-day processing period. Section 303(a)(2) of the 1994 Riegle Community Development and Regulatory Improvement Act (P.L. 103-325) seeks to promote uniform supervisory policies among depository institution regulators. The differences we identified in regulatory practices could result in the uneven treatment of the institutions and of applicants seeking to be confirmed as key officers. GAO/GGD-95-181R Differences in Screening Bank Executives

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