Differences in Screening Bank Executives

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.