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GAO-07-593R 1 (2007-04-30)

handle is hein.gao/gaocrptavcl0001 and id is 1 raw text is: S=GAO Accountability * Integrity * Reliability United States Government Accountability Office Washington, DC 20548 April 30, 2007 The Honorable Bernard Sanders United States Senate Subject: Information on Selected Issues Concerning Banking Activities Dear Senator Sanders: This letter responds to your request for information on (1) selected federal expenditures, policies, and programs that affect the U.S. banking industry and (2) certain banking industry trends. These include the savings and loan industry crisis, trade finance, tax policies, and profits and executive compensation. Your letter also asked us for information on bank fees; as agreed with your staff, we will discuss this topic in a separate report. On December 11, 2006, we briefed your staff on information gathered during our preliminary work. This letter summarizes and updates the information presented at the briefing. The U.S. banking industry encompasses different types of federally insured depository institutions, including over 8,000 state and national banks, over 860 savings and loan associations (known as thrifts), and nearly 8,700 federally insured credit unions. Five federal banking regulatory agencies are collectively responsible for supervision of the industry: the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System (the Federal Reserve), the Office of Thrift Supervision (OTS), and the National Credit Union Administration (NCUA). During the 1980s, many thrifts experienced severe financial losses. In response to this crisis, Congress took a number of steps, including augmenting the Federal Savings and Loan Insurance Corporation's (FSLIC) insurance fund through the issuance of bonds and ultimately creating new insurance funds administered by FDIC. Congress also established new organizations to resolve the failing thrifts, and incentives were offered for financially healthy banks and thrifts to take over the troubled ones. These incentives included certain tax benefits administered by the Department of the Treasury's Internal Revenue Service (IRS). Banks engaged in financing international trade may participate in programs offered by the Export-Import Bank of the United States (Ex-Im), which helps finance exports of goods and services.' Among other things, Ex-Im guarantees loans-including loans made by U.S. banks-to private companies engaged in exporting and provides credit insurance. 'First established by executive order in 1934, Ex-Im currently operates as an independent agency of the U.S. government and is the official export credit agency of the United States. GAO-07-593R Banking Activities Page I

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