Financial Markets and Institutions:

Differences in Screening Bank Executives

GGD-95-181R: Published: Aug 17, 1995. Publicly Released: Aug 17, 1995.

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GAO examined federal financial regulators' practices for screening applicants for director and senior bank executive positions under section 32 of the Federal Deposit Insurance Act. GAO noted that: (1) the Federal Reserve Board (FRB) requires applicants to fill out a 3-page questionnaire, while the Office of the Comptroller of the Currency (OCC) requires applicants to submit a 15-page biographical profile, in order to assess the applicants' qualifications for bank executive positions; (2) FRB is the only federal financial regulator that does not require applicants to submit fingerprints; (3) OCC and the Office of Thrift Supervision (OTS) routinely request information on applicants' professional certifications, while the other regulators do not request such information; (4) FRB and OCC only request information on applicant's past bankruptcies, but the Federal Deposit Insurance Corporation (FDIC) and OTS request full disclosures of all sources of income and obligations; (5) OTS requires applicants to furnish employment data for the past 5 years, while FDIC requires that applicants provide information on all past and present employment; (6) regulators' background check procedures vary based on their individual past experiences and they follow different procedures when background checks take longer than the statutorily prescribed 30-day processing period; and (7) the differences in regulatory practices for gathering and processing applicant information could result in the uneven treatment of banks and of applicants seeking confirmation as bank officers.

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