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Office of the Ombudsman

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Examples of ways in which the Office of the Ombudsman can help insured financial institutions:

Facilitating communication. A banker recently heard that FDIC examiners require banks to achieve a “quota” for filing Suspicious Activity Reports (SARs). The bank complained to the OO that “SAR quotas” would be unreasonable and contrary to statements made by FDIC executives in Washington, D.C. The OO confirmed through a subject matter expert at FDIC headquarters that examiners are not trained to expect a specific number of SARs. The FDIC Regional Director agreed to emphasize this fact in upcoming examiner training.
Providing Liaison Services. A small FDIC-regulated bank sells loan “packages” to a large, non FDIC-regulated bank. Since repurchase options are involved, the small bank carries a contingent liability for which the state banking department requires quarterly reporting. The large bank must generate and send reporting information to the small institution, but was being non-responsive. The OO was asked to intercede. By communicating and coordinating with the regulatory agency that supervises the large bank, the OO was able to persuade the larger institution to send the needed information on a quarterly basis going forward.
Finding answers and conducting research. A banker asked the OO about FDIC appraisal regulations, specifically regarding exceptions to appraisal requirements in business loans less than $1 million. The banker wanted to know if the exception applies if the purpose of the loan is investment; and if appraisals are required for both the real property underlying the loan, and other real property offered as collateral. The OO researched the FDIC Rules and Regulations and supplied the answers.
Responding to concerns about the application process. A bank official wished to speak to the OO confidentially about an application to establish a foreign branch. He needed additional information related to the applicable sections of the FDIC Rules and Regulations before the bank could complete and submit the application. The OO called a bank applications subject matter expert in one of FDIC’s Regional Offices who provided answers. The banker received the necessary information through the OO without identifying the name or location of his bank.
Providing feedback at appropriate levels in FDIC. If the number or nature of banker comments to the OO regarding a regulatory issue indicates a trend, the OO will report the issue to FDIC’s senior management for consideration and possible action. For example, the OO has heard from numerous bankers regarding credit unions. The concern most frequently expressed is “unfair competitive advantages,” including tax exempt status and issues related to credit union membership eligibility. In 2004, banker complaints regarding “unfair competition” expanded to mortgage brokers, investment firms, insurance companies, and mortgage loan firms. While FDIC’s authority and influence in the competitive arena is limited, the OO continues to compile industry competition concerns and report them to the highest levels of FDIC management.”

Last Updated 04/13/2009 ombudsman@fdic.gov

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