Federal bank examiners could get new post-employment restrictions

Prompted in part by conflict-of-interest allegations stemming from the Riggs Bank investigation, Senate Governmental Affairs Investigations Subcommittee Chairman Norm Coleman, R-Minn., and ranking member Carl Levin, D-Mich., Monday introduced a bill calling for a "cooling off period" before certain federal bank examiners could go to work for financial institutions they had previously supervised.

The Coleman-Levin bill would require senior examiners who retire from their jobs at the Office of the Comptroller of the Currency and other federal banking regulatory agencies to wait at least one year before taking positions at the banks for which they once had oversight responsibility.

House Financial Services Oversight and Investigations ranking member Luis Gutierrez, D-Ill., introduced a similar bill last week. Financial Services Oversight and Investigations Subcommittee Chairwoman Sue Kelly, R-N.Y., is co-sponsoring that bill.

A one-year cooling-off period is among the recommendations included in a staff report Levin issued last July, following the subcommittee's year-long investigation into allegations that Riggs Bank had violated anti-money laundering laws. Comptroller of the Currency John Hawke also has urged lawmakers to enact a one-year cooling off period.

The report raised conflict-of-interest questions about a former OCC examiner who took an executive level job with Riggs shortly after retiring from OCC in 2002.

"Federal bank examiners are our first line of defense against money laundering and terrorist financing at U.S. banks, and we can't allow their independence to be undermined by the lure of a job at the banks they oversee," Levin said last week.

The Coleman-Levin bill falls under the jurisdiction of the Senate Banking Committee, which will examine the proposal as part of its broader inquiry into terrorist financing, according to a committee spokesman.

"We've held quite a few hearings on terror finance, and we think we will hold another couple of hearings prior to adjournment," the spokesman said. "It's a process we're moving through, and this is part of it."

A House aide familiar with the Gutierrez-Kelly bill said that legislation is not identical to the Senate bill, but is meant to cover the same ground. "I think there's a really large group of members who really think this needs to be done now," the House aide said.

The aide added that Gutierrez and Kelly hope to include their legislation in a package of proposals the House Financial Services Committee expects to mark up later this month to implement the recommendations of the 9/11 Commission. The Financial Services Committee also plans to hear testimony from Treasury officials Wednesday on 9/11-related proposals.

"We're having discussions with the [banking] agencies and working with committee staff to make changes and accommodate any concerns they may have," the House aide said of the Gutierrez-Kelly bill. "We're working out the details to make sure it captures the appropriate universe without being overzealous in scope."

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
Close [ x ] More from GovExec

Thank you for subscribing to newsletters from GovExec.com.
We think these reports might interest you:

  • Forecasting Cloud's Future

    Conversations with Federal, State, and Local Technology Leaders on Cloud-Driven Digital Transformation

  • The Big Data Campaign Trail

    With everyone so focused on security following recent breaches at federal, state and local government and education institutions, there has been little emphasis on the need for better operations. This report breaks down some of the biggest operational challenges in IT management and provides insight into how agencies and leaders can successfully solve some of the biggest lingering government IT issues.

  • Communicating Innovation in Federal Government

    Federal Government spending on ‘obsolete technology’ continues to increase. Supporting the twin pillars of improved digital service delivery for citizens on the one hand, and the increasingly optimized and flexible working practices for federal employees on the other, are neither easy nor inexpensive tasks. This whitepaper explores how federal agencies can leverage the value of existing agency technology assets while offering IT leaders the ability to implement the kind of employee productivity, citizen service improvements and security demanded by federal oversight.

  • IT Transformation Trends: Flash Storage as a Strategic IT Asset

    MIT Technology Review: Flash Storage As a Strategic IT Asset For the first time in decades, IT leaders now consider all-flash storage as a strategic IT asset. IT has become a new operating model that enables self-service with high performance, density and resiliency. It also offers the self-service agility of the public cloud combined with the security, performance, and cost-effectiveness of a private cloud. Download this MIT Technology Review paper to learn more about how all-flash storage is transforming the data center.

  • Ongoing Efforts in Veterans Health Care Modernization

    This report discusses the current state of veterans health care


When you download a report, your information may be shared with the underwriters of that document.