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GAO-22-105606 1 (2022-06-01)

handle is hein.gao/gaonee0001 and id is 1 raw text is: U.S. GOVERNMENT ACCOUNTABILITY OFFICE 441 G St. N.W. Comptroller General Washington, DC 20548 of the United States June 1, 2022 The Honorable Martin J. Gruenberg Acting Chairman Federal Deposit Insurance Corporation 550 17th St., N.W. Washington, D.C. 20429 Priority Open Recommendations: Federal Deposit Insurance Corporation Dear Acting Chairman Gruenberg: The purpose of this letter is to provide an update on the overall status of the Federal Deposit Insurance Corporation's (FDIC) implementation of GAO's recommendations and to call your personal attention to open recommendations that should be given high priority.1 In November 2021, we reported that on a government-wide basis, 76 percent of our recommendations made 4 years ago were implemented.2 FDIC's implementation rate for these recommendations was 97 percent. As of March 2022, FDIC had 10 open recommendations. Fully implementing these open recommendations could significantly improve FDIC's efforts to more effectively oversee risks to consumers and the safety and soundness of the U.S. banking system. Since our May 2021 letter, FDIC has not implemented our one priority recommendation, and we have not added any priority recommendations for this year. We ask your attention to the remaining open priority recommendation, which is related to financial technology (fintech). Specifically, in December 2018, we recommended that FDIC coordinate with other financial regulators to communicate to banks engaged with third-party relationships with fintech lenders on the appropriate use of alternative data in the underwriting process. In December 2021, the financial regulators told us they were working collaboratively on guidance, but they did not have a time frame for completing it. By implementing this recommendation, federally regulated banks may be better able to manage the risks associated with partnering with fintech lenders that use these data. (See enclosure for the recommendation and actions needed to implement it.) In March 2021, we issued our biennial update to our High-Risk List, which identifies government operations with greater vulnerabilities to fraud, waste, abuse, and mismanagement or the need 1Priority recommendations are those that GAO believes warrant priority attention from heads of key departments or agencies. They are highlighted because, upon implementation, they may significantly improve government operation, for example, by realizing large dollar savings; eliminating mismanagement, fraud, and abuse; or making progress toward addressing a high-risk or duplication issue. 2GAO, Performance and Accountability Report: Fiscal Year 2021, GAO-22-4SP (Washington, D.C.: Nov. 15, 2021). GAO-22-105606 FDIC Priority Recommendations Page 1

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