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4000 - Advisory Opinions
Request for Opinion on the Existence of Prohibited
Management Official Interlocks
FDIC-79-6
August 23, 1979
Daniel W. Persinger, Pamela E. F. LeCren, Attorney
The following is in response to your letter of August 2, 1979
requesting clarification on whether or not *** is in violation of the
Depository Institution Management Interlocks Act ("Title II" of
FIRIRCA) and its implementing regulations (12 C.F.R. Part 348) as the
result of engaging the service of an independent auditor.
{{4-28-89 p.4023}}
Title II in general prohibits the same person from concurrently
serving as a management official of any two depository institutions
that are located in the same Standard Metropolitan Statistical Area or
that are located in the same, adjacent, or contiguous cities, towns, or
villages. The term "management official" is defined to include,
among other things, an employee or officer with management functions.
(See § 348.2(h) of the regulations and § 202(4) of the statute.)
You indicate in your letter that *** has engaged the services of an
independent auditor who will perform the internal audit functions of
the bank. The auditor is currently serving as an officer of a savings
and loan association in the same community in which *** is
located. 1
It is our opinion that the facts presented do not reflect a
prohibited management official interlock. An independent auditor who is
performing an internal audit for a bank is not normally considered an
employee with management functions. Some unusual circumstances would
have to be present before we would consider such a person to be a
management official for the purposes of Title II.
If you have any further questions regarding Title II or the
regulations implementing Title II, please call
me.
1 I am assuming for the purposes of this opinion that *** and
the savings and loan association are located in the same city, town, or
village. Go Back to Text
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