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Federal Reserve Bank of Dallas
2200 N. PEARL ST.
DALLAS, TX 75201-2272

August 17, 2005
Notice 05-43
TO: The Chief Executive Officer of each
financial institution and others concerned
in the Eleventh Federal Reserve District
SUBJECT
One-Year Post-Employment Restrictions
for Senior Examiners
DETAILS
The Board of Governors, Office of the Comptroller of the Currency, Federal Deposit
Insurance Corporation, and the Office of Thrift Supervision (the agencies) are proposing to adopt
rules to implement Section 6303(b) of the Intelligence Reform and Terrorism Prevention Act of
2004 (Intelligence Reform Act), which added a new Section 10(k) to the Federal Deposit
Insurance Act (FDI Act).
Section 10(k) imposes post-employment restrictions on senior examiners of depository
institutions and depository institution holding companies. Under Section 10(k), a senior examiner
employed or commissioned by an agency may not knowingly accept compensation as an
employee, officer, director, or consultant from certain depository institutions or depository
institution holding companies he or she examined, or from certain related entities, for one year
after the examiner leaves the employment or service of the agency. If an examiner violates the
one-year restriction, the statute requires the appropriate federal banking agency to seek penalties.
Accordingly, the examiner may be subject to an order of removal and prohibition or a civil
money penalty of up to $250,000. The agencies have the discretion to seek both types of remedy.
Section 10(k) will become effective on December 17, 2005.
The Board must receive comments by October 4, 2005. Please address comments to
Jennifer J. Johnson, Secretary, Board of Governors of the Federal Reserve System, 20th Street

For additional copies, bankers and others are encouraged to use one of the following toll-free numbers in contacting the Federal
Reserve Bank of Dallas: Dallas Office (800) 333-4460; El Paso Branch Intrastate (800) 592-1631, Interstate (800) 351-1012;
Houston Branch Intrastate (800) 392-4162, Interstate (800) 221-0363; San Antonio Branch Intrastate (800) 292-5810.

-2and Constitution Avenue, N.W., Washington, DC 20551. Also, you may mail comments
electronically to regs.comments@federalreserve.gov. All comments should refer to Docket No.
R-1230.
The public can also view and submit comments on proposals by the Board and other
federal agencies from the www.regulations.gov web site.
ATTACHMENT
A copy of the Board’s notice as it appears on pages 45323–34, Vol. 70, No. 150 of the
Federal Register dated August 5, 2005, is attached.
MORE INFORMATION
For more information, please contact W. Arthur Tribble, Banking Supervision Department,
(214) 922-6226. Paper copies of this notice or previous Federal Reserve Bank notices can be
printed from our web site at www.dallasfed.org/banking/notices/index.html.

Federal Register / Vol. 70, No. 150 / Friday, August 5, 2005 / Proposed Rules

45323

DEPARTMENT OF THE TREASURY
Office of the Comptroller of the
Currency
12 CFR Parts 4 and 19
[Docket No. 05–12]
RIN 1557–AC94

FEDERAL RESERVE SYSTEM
12 CFR Parts 263 and 264a
[Docket No. R–1230]

FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Part 308 and 336
RIN 3064–AC92

DEPARTMENT OF THE TREASURY
Office of Thrift Supervision
12 CFR Parts 507 and 509
[No. 2005–27]
RIN 1550–AB99

One-Year Post-Employment
Restrictions for Senior Examiners
AGENCIES: Office of the Comptroller of
the Currency (OCC), Treasury; Board of
Governors of the Federal Reserve
System (Board); Federal Deposit
Insurance Corporation (FDIC); and
Office of Thrift Supervision (OTS),
Treasury.
ACTION: Joint notice of proposed
rulemaking.
SUMMARY: The OCC, Board, FDIC and
OTS (the Agencies) propose to adopt
rules to implement section 6303(b) of
the Intelligence Reform and Terrorism
Prevention Act of 2004 (Intelligence
Reform Act), which added a new section
10(k) to the Federal Deposit Insurance
Act (FDI Act). Section 10(k) imposes
post-employment restrictions on senior
examiners of depository institutions and
depository institution holding
companies. Under section 10(k), a
senior examiner employed or
commissioned by an Agency may not
knowingly accept compensation as an
employee, officer, director, or
consultant from certain depository
institutions or depository institution
holding companies he or she examined,
or from certain related entities, for one
year after the examiner leaves the
employment or service of the Agency. If
an examiner violates the one-year
restriction, the statute requires the
appropriate Federal banking agency to

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Federal Register / Vol. 70, No. 150 / Friday, August 5, 2005 / Proposed Rules

seek penalties. Accordingly, the
examiner may be subject to an order of
removal and prohibition or a civil
money penalty of up to $250,000. The
Agencies have the discretion to seek
both types of remedy. Section 10(k) will
become effective on December 17, 2005.
DATES: Comments must be received on
or before October 4, 2005.
ADDRESSES:
OCC: You should include OCC and
Docket Number 05–12 in your comment.
You may submit comments by any of
the following methods:
• Federal eRulemaking Portal: http://
www.regulations.gov. Follow the
instructions for submitting comments.
• OCC Web Site: http://
www.occ.treas.gov. Click on ‘‘Contact
the OCC,’’ scroll down and click on
‘‘Comments on Proposed Regulations.’’
• E-mail:
regs.comments@occ.treas.gov.
• Fax: (202) 874–4448.
• Mail: Office of the Comptroller of
the Currency, 250 E Street, SW., Mail
Stop 1–5, Washington, DC 20219.
• Hand Delivery/Courier: 250 E
Street, SW., Attn: Public Information
Room, Mail Stop 1–5, Washington, DC
20219.
Instructions: All submissions received
must include the agency name (OCC)
and docket number or Regulatory
Information Number (RIN) for this
notice of proposed rulemaking. In
general, OCC will enter all comments
received into the docket without
change, including any business or
personal information that you provide.
You may review comments and other
related materials by any of the following
methods:
• Viewing Comments Personally: You
may personally inspect and photocopy
comments at the OCC’s Public
Information Room, 250 E Street, SW.,
Washington, DC. You can make an
appointment to inspect comments by
calling (202) 874–5043.
Board: You may submit comments,
identified by Docket No. R–1230, by any
of the following methods:
• Agency Web Site: http://
www.federalreserve.gov. Follow the
instructions for submitting comments at
http://www.federalreserve.gov/
generalinfo/foia/ProposedRegs.cfm.
• Federal eRulemaking Portal: http://
www.regulations.gov. Follow the
instructions for submitting comments.
• E-mail:
regs.comments@federalreserve.gov.
Include docket number in the subject
line of the message.
• FAX: 202/452–3819 or 202/452–
3102.
• Mail: Jennifer J. Johnson, Secretary,
Board of Governors of the Federal

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Reserve System, 20th Street and
Constitution Avenue, NW., Washington,
DC 20551.
All public comments are available
from the Board’s Web site at http://
www.federalreserve.gov/generalinfo/
foia/ProposedRegs.cfm as submitted,
except as necessary for technical
reasons. Accordingly, your comments
will not be edited to remove any
identifying or contact information.
Public comments may also be viewed
electronically or in paper form in Room
MP–500 of the Board’s Martin Building
(20th and C Streets, NW.) between 9
a.m. and 5 p.m. on weekdays.
FDIC: You may submit comments,
identified by RIN number, by any of the
following methods:
• Agency Web Site: http://
www.fdic.gov/regulations/laws/
federal.propose.html. Follow
instructions for submitting comments
on the Agency Web Site.
• E-mail: Comments@FDIC.gov.
Include the RIN number in the subject
line of the message.
• Mail: Robert E. Feldman, Executive
Secretary, Attention: Comments, Federal
Deposit Insurance Corporation, 550 17th
Street, NW., Washington, DC 20429.
• Hand Delivery/Courier: Guard
station at the rear of the 550 17th Street
Building (located on F Street) on
business days between 7 a.m. and 5 p.m.
Instructions: All submissions received
must include the agency name and RIN
for this rulemaking. All comments
received will be posted without change
to http://www.fdic.gov/regulations/laws/
federal/propose.html including any
personal information provided.
OTS: You may submit comments,
identified by No. 2005–27, by any of the
following methods:
• Federal eRulemaking Portal: http://
www.regulations.gov. Follow the
instructions for submitting comments.
• E-mail:
regs.comments@ots.treas.gov. Please
include No. 2005–27 in the subject line
of the message and include your name
and telephone number in the message.
• Fax: (202) 906–6518.
• Mail: Regulation Comments, Chief
Counsel’s Office, Office of Thrift
Supervision, 1700 G Street, NW.,
Washington, DC 20552, Attention: No.
2005–27.
• Hand Delivery/Courier: Guard’s
Desk, East Lobby Entrance, 1700 G
Street, NW., from 9 a.m. to 4 p.m. on
business days, Attention: Regulation
Comments, Chief Counsel’s Office,
Attention: No. 2005–27.
Instructions: All submissions received
must include the agency name and
docket number or Regulatory
Information Number (RIN) for this

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rulemaking. All comments received will
be posted without change to the OTS
Internet Site at http://www.ots.treas.gov/
pagehtml.cfm?catNumber=67&an=1,
including any personal information
provided.
Docket: For access to the docket to
read background documents or
comments received, go to http://
www.ots.treas.gov/
pagehtml.cfm?catNumber=67&an=1.
In addition, you may inspect
comments at the Public Reading Room,
1700 G Street, NW., by appointment. To
make an appointment for access, call
(202) 906–5922, send an e-mail to
public.info@ots.treas.gov, or send a
facsimile transmission to (202) 906–
7755. (Prior notice identifying the
materials you will be requesting will
assist us in serving you.) We schedule
appointments on business days between
10 a.m. and 4 p.m. In most cases,
appointments will be available the next
business day following the date we
receive a request.
FOR FURTHER INFORMATION CONTACT:
OCC: Mitchell Plave, Counsel,
Legislative and Regulatory Activities
Division, (202) 874–5090; Stuart
Feldstein, Assistant Director, Legislative
and Regulatory Activities Division,
(202) 874–5090; or Barrett Aldemeyer,
Senior Counsel, Administrative and
Internal Law Division, (202) 874–4460,
Office of the Comptroller of the
Currency, 250 E Street, SW.,
Washington, DC 20219.
Board: Cary K. Williams, Assistant
General Counsel, (202) 452–3295,
Kieran J. Fallon, Assistant General
Counsel, (202) 452–5270, Andrea
Tokheim, Attorney, (202) 452–2300,
Legal Division; William Spaniel, Deputy
Associate Director, (202) 452–3469, or
Jinai Holmes, Senior Financial Analyst,
(202) 452–2834, Division of Banking
Supervision and Regulation; for users of
Telecommunication Devices for the Deaf
(TDD) only, contact (202) 263–4869.
FDIC: Robert J. Fagan, Ethics Program
Manager, Legal Division, (202) 898–
6808; Stephen P. Gaddie, Special
Assistant to the Deputy Director,
Division of Supervision and Consumer
Protection, (202) 898–6575; Richard
Osterman, Senior Counsel, Legal
Division, (202) 898–7028; and Kymberly
K. Copa, Counsel, Legal Division, (202)
898–8832.
OTS: Elizabeth Moore, Special
Counsel, Litigation Division, (202) 906–
7039; or Karen Osterloh, Special
Counsel, Regulations and Legislation
Division, (202) 906–6639, Chief
Counsel’s Office, Office of Thrift
Supervision, 1700 G Street, NW.,
Washington, DC 20552.

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SUPPLEMENTARY INFORMATION:

I. Background
Recently, Congress added a new
Federal post-employment restriction
that applies in certain circumstances to
‘‘senior examiners’’ of depository
institutions and depository institution
holding companies. Under section
6303(b) of the Intelligence Reform Act,1
which added a new section 10(k) to the
FDI Act, an officer or employee of an
Agency or a Federal Reserve Bank
(Reserve Bank) who acts as a ‘‘senior
examiner’’ for a particular depository
institution may not, within one year
after terminating employment with the
relevant Agency or Reserve Bank,
knowingly accept compensation as an
officer, director, employee or consultant
from such depository institution or any
company (including a bank holding
company or savings and loan holding
company) that controls the depository
institution.2 Section 10(k) imposes a
similar post-employment restriction on
an officer or employee who acts as the
‘‘senior examiner’’ of a particular
depository institution holding company,
but, in these circumstances, the postemployment restrictions apply to
relationships with the depository
institution holding company and any
depository institution subsidiary of the
holding company.3 The postemployment restrictions in section 10(k)
are in addition to any other conflict of
interest and ethics rules and restrictions
that may apply to examiners under
applicable Federal law or the internal
codes of conduct established by an
Agency or a Reserve Bank.
As discussed further below, under
section 10(k), an officer or employee of
an Agency or a Reserve Bank serves as
the ‘‘senior examiner’’ of a particular
depository institution or depository
institution holding company only if the
examiner has ‘‘continuing, broad
responsibility’’ for the examination or
inspection of that depository institution
or depository institution holding
company. In addition, to be subject to
the post-employment restrictions in
section 10(k), an officer or employee
must have served as the senior examiner
1 Pub. L. 108–458, 118 Stat. 3638, 3751–53 (Dec.
17, 2004).
2 For purposes of section 10(k), the term
‘‘depository institution’’ includes an uninsured
branch or agency of a foreign bank, if such branch
or agency is located in a state of the United States.
See 12 U.S.C. 1820(k)(2)(A).
3 For purposes of the post-employment restriction
of section 10(k), the term ‘‘depository institution
holding company’’ means a bank holding company
or a savings and loan holding company, and also
includes, among other things, a foreign bank that
has a branch, agency, or commercial lending
company subsidiary in the United States.

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for the institution or holding company
for two or more months during the final
twelve months of his or her employment
with the Agency or Reserve Bank. If a
senior examiner violates the one-year
post-employment restrictions in section
10(k), the statute requires the
appropriate Federal banking agency to
initiate proceedings to impose an order
of removal and prohibition or a civil
money penalty on the former senior
examiner, and permits the Agency to
seek both remedies. These penalties are
discussed more fully in Part II.C below.
Congress directed each Agency to
prescribe rules or regulations to
administer and carry out section 10(k),
including rules, regulations or
guidelines to define the scope of
persons who are ‘‘senior examiners.’’
Congress required the Agencies to
consult with each other to assure that
these rules are, to the extent possible,
consistent, comparable, and practicable,
taking into account any differences in
the supervisory programs utilized by the
Agencies for the supervision of
depository institutions and depository
institution holding companies.
Accordingly, the Agencies today are
jointly requesting comment on proposed
rules that would implement the postemployment restrictions in section
10(k). The Agencies have consulted
with each other in developing the
proposed rules, which are substantively
similar. The proposed rules of the
Agencies, however, differ slightly to
reflect differences in the supervisory
programs and jurisdictions of the
Agencies. In addition, there are slight,
non-substantive differences in the
organization of the Agencies’ proposed
rules.
II. Description of the Proposal
A. Definition of ‘‘Senior Examiner’’
The post-employment restrictions in
section 10(k) apply only to an officer or
employee of an Agency or Reserve Bank
who serves as the ‘‘senior examiner’’ (or
in a functionally equivalent position) of
a particular depository institution or
depository institution holding company
and, in this capacity, has ‘‘continuing,
broad responsibility for the examination
(or inspection) of that depository
institution or depository institution
holding company’’ on behalf of the
relevant Agency or Reserve Bank.4 The
legislative history of section 10(k)
indicates that the statute’s postemployment restrictions were ‘‘intended
to apply only to senior examiners who
have a meaningful relationship with a
financial institution, such as an

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45325

examiner-in-charge or a senior examiner
with dedicated responsibility to oversee
a particular institution.’’ 5 Moreover,
this legislative history indicates that the
statute was ‘‘not intended to apply to
less senior examiners who may examine
or inspect dozens of financial
institutions in a single year without
developing a sustained relationship
with any one institution,’’ or to
‘‘persons holding supervisory positions
that do not involve routine interactions
with an institution for purposes of
examining or inspecting the institution’s
books or operations.’’ 6
Consistent with the statute and
Congress’s intent, the proposed rules
provide that an officer or employee of
an Agency or a Reserve Bank will be
considered the ‘‘senior examiner’’ for a
particular depository institution or
depository institution holding company
if:
• The individual has been designated
or commissioned to conduct
examinations or inspections on behalf of
the relevant Agency;
• The relevant Agency or Reserve
Bank has assigned the individual
continuing, broad, and lead
responsibility for examining or
inspecting the depository institution or
holding company; and
• The individual’s responsibilities for
the depository institution or holding
company represent a substantial portion
of the individual’s assigned
responsibilities and require the
individual to routinely interact with
officers or employees of the institution,
holding company, or its affiliates.
To be considered a ‘‘senior
examiner,’’ an officer or employee must
meet each of the criteria listed above.
Thus, an examiner who spends a
substantial portion of his or her time
conducting or leading a targeted
examination (such as a review of an
institution’s credit risk management,
information systems or internal audit
functions), but who does not have broad
and lead responsibility for the Agency’s
or Reserve Bank’s overall examination
program with respect to the institution,
would not be considered a ‘‘senior
examiner’’ with respect to the
institution. An examiner who may
divide his or her time across a portfolio
of depository institutions or holding
companies, each of which does not
represent a substantial portion of the
examiner’s responsibilities, also would
not be considered a ‘‘senior examiner.’’
Such an examiner is not likely to
develop the type and degree of
5 150 Cong. Rec. S10356 (daily ed. Oct. 4, 2004)
(statement of Sen. Levin).
6 Id.

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relationship with any one institution
that the post-employment restriction
was designed to address. In addition, for
purposes of section 10(k), the examiner
must have ‘‘continuing’’ responsibility
for the relevant Agency’s or Reserve
Bank’s supervisory program with
respect to the particular depository
institution or depository institution
holding company. The Agencies believe
that an examiner would have
‘‘continuing’’ responsibility for an
institution or holding company only
when the examiner’s responsibilities for
the institution or company were
expected to continue for a sufficient
period of time, for example, for at least
two months, that would enable the
examiner to develop the type and degree
of ‘‘meaningful,’’ ‘‘dedicated’’ and
‘‘sustained’’ relationship with the
institution or company that the statute
was designed to address.7
The Agencies believe that the
proposed definition of ‘‘senior
examiner’’ properly applies the postemployment restrictions in section 10(k)
to those examiners who, by reason of
their position and assigned
responsibilities, have broad
responsibility for a depository
institution or depository institution
holding company and will devote a
substantial amount of their time to that
institution or holding company on a
continuing basis. It is these senior
examiners who may develop the type
and degree of meaningful and ongoing
relationship with a particular institution
intended to be covered by the statute.
To help examiners comply with the
one-year post-employment restrictions,
the Agencies will notify an examiner in
writing if the relevant Agency believes
the examiner’s assigned responsibilities
would cause the examiner to be
considered a ‘‘senior examiner’’ with
respect to any depository institution or
depository institution holding company.
Nonetheless, the post-employment
restrictions in section 10(k) and the
proposed rules apply directly to senior
examiners, and examiners are
responsible for becoming familiar with
and ensuring their own compliance
with the statute. Accordingly, examiners
who have questions concerning whether
they may be considered a ‘‘senior
examiner’’ for an institution or holding
company should contact the appropriate
persons at their respective Agency or
Reserve Bank.
Because the titles and roles of
examiners vary among the Agencies, the
Agencies have set forth below a brief
description of the types of examiners
7 150 Cong. Rec. S10356 (daily ed. Oct. 4, 2004)
(statement of Sen. Levin).

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that each Agency anticipates, in light of
the structure and nature of the Agency’s
supervisory program, would be subject
to the post-employment restrictions in
section 10(k). We invite comment on
whether the proposed definition of
‘‘senior examiner,’’ combined with
notice to those examiners, is sufficient
to identify those Agency or Reserve
Bank employees who are subject to
section 10(k).
1. OCC
The OCC expects that the one-year
post-employment restrictions would
apply to examiners-in-charge (EIC) of a
bank in the OCC’s Large Bank or MidSize Bank programs. OCC employees
who may examine multiple depository
institutions in a single year typically do
not develop the type and degree of
relationship with any one institution
that would cause them to be considered
‘‘senior examiners’’ under the proposal.
For banks in the OCC’s Large and
Mid-Size Bank programs, the EIC
coordinates and oversees all of the
examination and supervisory activities
for all of the affiliated national banks
that may be part of that banking
organization’s family of national banks
(e.g., separately chartered national trust
company or credit card banks). In those
cases, the EIC is considered to be a
‘‘senior examiner’’ for purposes of this
regulation for each national bank within
the family of national banks.
The proposal applies only to OCC
employees who have overall
responsibility for a national bank on a
sustained basis. While the proposal
would primarily cover large and midsize bank program EICs, there may be
others who meet the ‘‘senior examiner’’
criteria, such as individuals who serve
as acting EICs for banks in the OCC’s
Large or Mid-Size Bank program for the
period of time described in the statute.
The OCC anticipates that approximately
50 examiners would be covered by the
one-year post-employment restrictions.
The proposal would not cover
Portfolio Managers for national banks
supervised by a field office of the OCC,
typically community banks. Although
Portfolio Managers serve as the
designated point-of-contact for national
banks in their portfolios and lead the
examination activities for institutions in
their portfolios, they may also perform
examinations of several institutions not
in their portfolios, including serving as
EIC for some of those examinations.
Accordingly, Portfolio Managers
typically do not develop the type and
degree of relationship with any one
institution sought to be covered by the
statute.

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The OCC will develop policies and
procedures to identify and notify those
examiners who will be subject to the
post-employment restrictions.
2. Board
The Board expects that the postemployment restrictions in section 10(k)
would apply to those examiners who
serve as central points of contact, or in
functionally equivalent positions
(collectively, CPCs), for a limited
number of large and complex or larger
regional state member banks, bank
holding companies, or foreign banks.
CPCs are assigned broad, lead and
overall responsibility for the Federal
Reserve’s supervisory and examination
program for a particular institution. In
addition, given the nature of large and
complex banking organizations and a
few larger regional banking
organizations, CPCs that are assigned to
such organizations typically are
expected to devote a substantial portion,
and in some cases all, of their time and
attention to the supervision,
examination, or inspection of that
organization. The Board currently
estimates that approximately 50
examiners that serve as CPCs for large
and complex or larger regional banking
organizations would be considered the
senior examiner for the organization for
purposes of section 10(k) and the
proposed rules. The Board expects to
develop policies and procedures to
notify those Board examiners that are
subject to the post-employment
restrictions in section 10(k).
3. FDIC
As the FDIC’s supervisory program is
currently structured, most examiners-incharge (EICs) at the FDIC would not be
considered senior examiners or satisfy
the requirement that the senior
examiner serve for two or more months
in that role during the last 12 months of
employment with the FDIC. FDIC
employees who examine or inspect
multiple financial institutions in a
single year (even as an EIC in some
cases) typically do not develop a
sustained or meaningful relationship
with any one institution and, therefore,
would not be considered ‘‘senior
examiners’’ under the proposal. The
proposal is intended to apply only to
FDIC examiners who have overall
responsibility for an insured depository
institution that involves ‘‘routine
interactions with the institution for
purposes of examining or inspecting the
institution’s books or operations’’ and
that creates the opportunity for a

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Federal Register / Vol. 70, No. 150 / Friday, August 5, 2005 / Proposed Rules
meaningful or sustained relationship
with that institution.8
Under the current organization of the
FDIC’s Division of Supervision and
Consumer Protection, certain FDIC
examiners would, however, clearly
seem to be covered—examiners in the
Large State Nonmember Bank Onsite
Supervision Program and examiners
assigned to the FDIC’s Dedicated
Examiner Program who are assigned to
the largest banking organizations.
The Large State Nonmember Bank
Onsite Supervision Program provides
for visitations and targeted reviews of
the institutions covered by the Program
throughout the year, instead of
traditional, annual, point-in-time
examinations. Examiners assigned to the
Program focus on all aspects of ongoing
supervision for institutions in the
Program, including:
• Preparing and implementing, or
assisting in preparing or implementing,
supervisory plans;
• Risk-scoping supervisory activities
and conducting ongoing targeted
reviews in accordance with the
institution’s supervisory plan;
• Meeting with institution
management to communicate findings;
• Preparing limited scope reports;
and
• Completing annual reports of
examinations.
These Program examiners are the
FDIC’s primary source of supervision
and oversight of their assigned
institutions, and they must have an
intimate knowledge of their institution’s
operations and considerable access to
institution management to perform their
duties.
In addition, although the FDIC is not
the primary Federal regulator for the
largest banking organizations currently
in the Dedicated Examiner Program, the
FDIC examiners in this Program are
dedicated to the institution, have an
intimate knowledge of their assigned
institutions, considerable access to, and
potentially close working relationships
with, institution management, and are
the FDIC’s primary source of
supervisory information and oversight
of these institutions. These dedicated
examiners, therefore, appear to meet the
statutory requirement of being a senior
examiner (or a functionally equivalent
position) of a depository institution
with continuing, broad responsibility
for examining that institution.
Furthermore, absent the ‘‘cooling off’’
period, permitting a dedicated examiner
to go to work for his or her assigned
8 See 150 Cong. Rec. s10356 (daily ed. Oct. 4,
2004) (statement of Sen. Levin).

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institution could create a perceived
conflict of interest.
On the other hand, the proposal
would not be expected typically to
cover Relationship Managers for
institutions within a field or territory
office. Although Relationship Managers
serve as the local point-of-contact for
FDIC-supervised institutions in their
portfolios, and they would normally be
expected to lead the examination
activities in which they specialize for
the banks in their portfolios, they are
also expected to perform examinations
of banks that are not in their portfolios,
including acting as the EIC for some of
those examinations. In addition,
Relationship Managers are not required
to be the EIC during safety and
soundness examinations of institutions
in their portfolios, and, unlike dedicated
and large State nonmember examiners,
Relationship Managers may be onsite at
their assigned institutions relatively
infrequently. Moreover, the FDIC does
not expect that a Relationship Manager
will typically spend a substantial
portion of his or her time on any
particular institution to which he or she
is assigned. Rather, these are
journeyman level field examiners
assigned to a particular institution as a
local point of contact for the
convenience of the institution and the
FDIC, but these examiners also will be
expected to examine a number of other
institutions during the course of a year,
both as an EIC and as a staff examiner.
It is the FDIC’s view that the duties of
Relationship Managers do not generally
meet the requirements of being a ‘‘senior
examiner or a functionally equivalent
position of a depository institution with
continuing, broad responsibility for the
examination of that institution.’’
However, it is possible that, based on
individual circumstances, a particular
Relationship Manager could be
considered a senior examiner for
purposes of the post-employment
restrictions. Most generalist examiners
employed by the FDIC would not be
covered by the post-employment
restrictions in section 10(k). While the
proposal would primarily cover FDIC
examiners in the Large State
Nonmember Bank Onsite Supervision
Program, examiners in its Dedicated
Examiner Program, and possibly a
limited number of EICs, there may be
others who have ‘‘continuing, broad
responsibility’’ for examining or
inspecting insured depository
institutions, such as individuals who
conduct certain special examinations or
serve in an acting capacity in a covered
position.

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4. OTS
As OTS’s supervisory program is
currently structured, the postemployment restrictions in section 10(k)
would primarily cover OTS examinersin-charge (EICs) at OTS’s largest savings
associations and holding companies.
Other EICs inspect multiple savings
associations and savings and loan
holding companies in a single year and,
as a result, typically do not develop a
meaningful and sustained relationship
with any one entity. Accordingly, OTS
believes that these EICs would not
satisfy the definition of senior examiner
either because they do not have
continuing responsibilities at the entity
or because their responsibilities with
respect to the particular savings
association or savings and loan holding
company would not represent a
substantial portion of their assigned
responsibilities. Most of these EICs also
would not satisfy the two of twelve
months service requirement.
Examiners who are not EICs typically
would not be senior examiners because
they do not have ‘‘broad and lead’’
responsibilities for examinations or
inspections. As noted in the legislative
history, however, the definition of
senior examiner may apply to more than
one examiner at the same entity. Under
OTS’s interpretation of this criterion, an
examiner would have ‘‘broad and lead’’
responsibility if he or she has
significant, major responsibilities
regarding the conduct of the overall
examination program at an entity,
whether or not that examiner is
designated as an EIC. Thus, non-EICs at
OTS’s largest savings associations or
holding companies could also satisfy
the definition of senior examiner.
Other OTS officers or employees
typically would not be senior
examiners. For example, Washington
headquarters employees, Regional
Directors, Deputy Regional Directors,
Assistant Regional Directors for Support
or Operations, and Field Managers
typically would not satisfy one or more
of the proposed criteria for senior
examiner and would not be subject to
the post-employment restrictions.
B. One-Year Post-Employment
Restrictions
If an officer or employee of an Agency
or a Reserve Bank serves as the senior
examiner for a depository institution
during two or more months of the
individual’s final twelve months of
employment with the Agency or Reserve
Bank, section 10(k) prohibits the
individual from knowingly accepting
compensation as an employee, officer,
director, or consultant from the

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depository institution or any company
that controls the depository institution
(including a bank holding company or
savings and loan holding company) for
one year after leaving the employment
of the Agency or Reserve Bank. With
respect to holding companies, the oneyear prohibition extends only to
companies that control the depository
institution and would not prohibit the
senior examiner from accepting
employment with a subsidiary or
affiliate of the bank holding company,
savings and loan holding company, or
other company that controls the bank
(other than the depository institution
subsidiary for which the individual
served as a senior examiner).9
If an officer or employee serves as the
senior examiner for a depository
institution holding company for two or
more months during the last twelve
months of his or her employment with
an Agency or a Reserve Bank, the statute
prohibits the individual from becoming
employed by, or otherwise accepting
compensation in the manner described
above, from that holding company or
any depository institution subsidiary of
the holding company for one year after
leaving the employment of the Agency
or Reserve Bank.
To assist examiners, the Agencies
have tailored their rules to identify how
these restrictions would apply to senior
examiners for the different types of
institutions and holding companies,
including foreign banks, under the
Agencies’ jurisdictions.
Under section 10(k), a person is
deemed to be a consultant for purposes
of the one-year post-employment
restrictions only if such person ‘‘directly
works on matters for, or on behalf of,’’
the relevant depository institution,
depository institution holding company
or other company.10 The Agencies have
incorporated this rule of construction
into the proposed rules. We interpret
this provision to mean that a former
senior examiner who joins a consulting
or other firm may not, during the
twelve-month post-employment
‘‘cooling-off’’ period, participate in any
work that the firm is conducting for a
depository institution or company that
the former senior examiner would be
9 The Agencies note, however, that a former
senior examiner may not evade the postemployment restrictions in section 10(k) by
nominally accepting employment with a company
not directly covered by the post-employment
restrictions, but then functionally serve as an
officer, employee, director, or consultant for a
depository institution or company that the former
senior examiner would have been prohibited from
working for directly.
10 See 12 U.S.C. 1820(k)(3).

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prohibited from doing directly.11 The
former senior examiner would not,
however, violate the post-employment
restrictions in section 10(k) by joining a
firm that performs work for such an
institution or company as long as the
former senior examiner does not
personally participate in any such work.
The Agencies request comment on
whether the meaning of ‘‘consultant’’ is
sufficiently clear.
Section 10(k) expressly authorizes the
head of each Agency to waive
application of the statute’s postemployment restrictions to a senior
examiner on a case-by-case basis if the
head of the Agency determines that
‘‘granting the waiver would not affect
the integrity of the supervisory program
of [such Agency].’’ 12 The Agencies have
incorporated this waiver provision into
the proposed rules. The Agencies expect
to grant waivers only in special
circumstances. If an Agency grants a
waiver to a senior examiner, the postemployment restrictions in section
10(k), and the associated penalties,
would not apply to the senior examiner.
C. Penalties
If a senior examiner violates the postemployment restrictions in section
10(k), the statute requires the
appropriate Agency to seek one of the
following penalties:
• An order (1) removing the
individual from his or her position at,
or prohibiting the individual from
further participation in the affairs of, the
relevant depository institution,
depository institution holding company,
or other company for a period of up to
five years, and (2) prohibiting the
individual from participating in the
conduct of the affairs of any insured
depository institution for a period of up
to five years; or
• A civil monetary penalty of not
more than $250,000.13
An Agency also has the discretion to
seek both of these penalties.
A former senior examiner who is
subject to a removal and prohibition
order under section 10(k) also is subject
to paragraphs (6) and (7) of section 8(e)
of the FDI Act.14 These provisions
11 Of course, a former senior examiner who is selfemployed similarly may not accept compensation
for work performed as a consultant in his or her
individual capacity for the relevant depository
institution, depository institution holding company,
or other company.
12 See 12 U.S.C. 1820(k)(5).
13 See 12 U.S.C. 1820(k)(6)(A). If the appropriate
Federal banking agency does not assess a civil
monetary penalty against a senior examiner who
violates the post-employment restrictions in section
10(k), the Attorney General of the United States
may bring a civil action to impose such a penalty
against the senior examiner. Id.
14 See 12 U.S.C. 1820(k)(6)(B).

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further define the scope of the penalties
specified in section 10(k). For example,
they would prohibit an individual, for
the duration of the prohibition order,
from participating in the affairs of any
bank holding company or subsidiary of
a bank holding company, savings and
loan holding company or subsidiary of
a savings and loan holding company,
any foreign bank that operates a branch,
agency or commercial lending company
subsidiary in the United States or any
subsidiary of such a foreign bank, or
certain other entities, such as credit
unions.15 In addition, these provisions
would prohibit the individual, during
the term of the prohibition order, from
accepting employment with any
appropriate Federal financial
institutions regulatory agency (as
defined in 12 U.S.C. 1818(e)(7)(D)), and
certain other Federal agencies. The
penalties that may apply to a senior
examiner under section 10(k) are in
addition to any other administrative,
civil, or criminal penalty that may
apply.
Under section 10(k), to obtain an
order of removal or prohibition, an
Agency must follow the rules and
procedures that apply in similar types of
proceedings against depository
institutions and institution-affiliated
parties. Specifically, section 10(k) states
that removal and prohibition
proceedings must be conducted in
accordance with section 8(e)(4) of the
FDI Act, which provides the individual
the right to an administrative hearing
prior to final Agency action. Section
10(k) further provides that an Agency
seeking to impose a civil monetary
penalty on a former senior examiner
must do so either in accordance with
section 8(i) of the FDI Act, which also
provides the individual the right to an
administrative hearing prior to final
Agency action, or through a civil action
brought in an appropriate United States
District Court.16
The Agencies do not believe it is
necessary to codify these procedures,
which are set forth in the statute, in
their proposed rules. Accordingly, the
proposed rules merely cross-reference
the required statutory procedures.
Under the proposal, proceedings against
examiners for violations of the postemployment restrictions would take
place in accordance with the Agencies’
rules of practice and procedure.
Accordingly, the Agencies propose to
amend the scope sections of their
15 The appropriate agencies may waive for an
individual the application of this restriction as it
applies to a particular institution or other company,
as provided in section 8(e)(7)(B) of the FDI Act (12
U.S.C. 1818(e)(7)(B)).
16 See 12 U.S.C. 1820(k)(6).

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respective Rules of Practice and
Procedure to reflect the addition of
proceedings under section 10(k).
Section 10(k) assigns responsibility
for seeking penalties to the ‘‘appropriate
Federal banking agency’’ (as determined
under section 3 of the FDI Act) for the
institution or company that employs the
former senior examiner (or otherwise
compensates the senior examiner) after
the examiner has left the service of an
Agency or Reserve Bank.17 For example,
the OCC would be responsible for
seeking penalties against a former
employee of a Reserve Bank who, after
acting as a ‘‘senior examiner’’ at a bank
holding company, accepts
compensation, in violation of section
10(k), from a subsidiary national bank.
As a corollary, the Board would be
responsible for seeking penalties against
a former OCC employee who accepts
prohibited compensation from the
holding company of a national bank.
When a senior examiner becomes
associated with an entity that is not a
depository institution or a depository
institution holding company, the
‘‘appropriate Federal banking agency’’ is
the Agency that employed the senior
examiner.
As noted above, in some cases, the
Agency responsible for enforcing the
post-employment restrictions in section
10(k) with respect to a senior examiner
may be a different Agency than the
Agency that employed or commissioned
the examiner. The Agency that
employed or commissioned the
examiner, however, would remain
responsible for determining whether the
examiner was the ‘‘senior examiner’’ for
a depository institution or depository
institution holding company while the
examiner was employed or
commissioned by the Agency in
accordance with the rules of that
Agency. For example, if an examiner
commissioned by the Board and
employed by a Reserve Bank leaves the
employment of the Reserve Bank and
immediately accepts employment with a
national bank subsidiary of a bank
holding company, the Board would be
responsible for determining, under the
Board’s rules and guidance, whether the
examiner served as the ‘‘senior
examiner’’ for the parent bank holding
company for the requisite period prior
to his or her departure from the Reserve
Bank. If the Board determined that the
examiner was the ‘‘senior examiner’’ for
the parent bank holding company of the
national bank subsidiary, then the OCC
would seek to impose appropriate
penalties for violations of the post-

employment restrictions in section 10(k)
with respect to the former examiner.
D. Effective Date
The Intelligence Reform Act provides
that the post-employment restrictions
imposed by section 10(k) shall become
effective on December 17, 2005.18
Accordingly, section 10(k) and the
proposed rules apply only to officers or
employees of an Agency or Reserve
Bank who terminate their employment
with the Agency or Reserve Bank on or
after December 17, 2005. The Agencies
note, however, that, because of the
statute’s twelve-month ‘‘look-back’’
provision, an officer or employee who
leaves an Agency or a Reserve Bank
within one year of December 17, 2005,
may be subject to the post-employment
restrictions in section 10(k) based on the
nature of their examination
responsibilities as far back as December
17, 2004.
For example, if an Agency examiner
terminates his or her employment with
the relevant Agency on January 1, 2006,
and the individual, while employed by
the Agency, served as the ‘‘senior
examiner’’ for a particular depository
institution from May 1, 2005 to October
1, 2005, the individual is subject to the
post-employment restrictions. Although
the service that caused the individual to
be considered a ‘‘senior examiner’’
occurred prior to December 17, 2005,
such service occurred during the last
twelve months of the individual’s
employment with the Agency and,
accordingly, the examiner may not
become employed by the relevant
depository institution, or any company
that controls the depository institution,
until January 2, 2007.
As noted above, section 10(k) does not
apply to any Agency or Reserve Bank
employee who resigns before December
17, 2005. Thus, in the foregoing
example, if the examiner terminated his
or her employment with the Agency on
November 1, 2005, the employee would
not be subject to the post-employment
restrictions in section 10(k).
Solicitation of Comments on Use of
Plain Language
Section 722 of the Gramm-LeachBliley Act, Pub. L. 106–102, 113 Stat.
1338, 1471 (Nov. 12, 1999), requires the
Federal banking agencies to use plain
language in all proposed and final rules
published after January 1, 2000. We
invite your comments on how to make
this proposal easier to understand. For
example:
18 See

17 See

12 U.S.C. 1820(k)(6)(A).

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section 6303(d) of the Intelligence Reform

Act.

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• Have we organized the material to
suit your needs? If not, how could this
material be better organized?
• Are the requirements in the
proposed regulation clearly stated? If
not, how could the regulation be more
clearly stated?
• Does the proposed regulation
contain language or jargon that is not
clear? If so, which language requires
clarification?
• Would a different format (grouping
and order of sections, use of headings,
paragraphing) make the regulation
easier to understand? If so, what
changes to the format would make the
regulation easier to understand?
• What else could we do to make the
regulation easier to understand?
Regulatory Flexibility Act Analysis
The Regulatory Flexibility Act (RFA)
requires that each federal Agency either
certify that a proposed rule would not,
if adopted in final form, have a
significant impact on a substantial
number of small entities or prepare an
initial regulatory flexibility analysis
(IRFA) of the proposal and publish the
analysis for comment. See 5 U.S.C. 603,
605. Section 10(k) and the proposed
rules impose post-employment
restrictions on certain senior examiners
employed by an Agency or a Reserve
Bank and do not impose any obligations
or restrictions on banking organizations,
including small banking organizations.
On this basis, the Agencies certify that
this proposal, if it is adopted in final
form, would not have a significant
impact on a substantial number of small
entities, within the meaning of those
terms as used in the RFA. Commenters
are invited to provide the Agencies with
any information they may have about
the likely quantitative effects of the
proposal.
Executive Order 12866
The OCC and OTS have determined
that this proposed rulemaking is not a
significant regulatory action under
Executive Order 12866.
Executive Order 13132
The OCC has determined that this
proposal does not have any federalism
implications as required by Executive
Order 13132.
Unfunded Mandates Reform Act of 1995
Under section 202 of the Unfunded
Mandates Reform Act of 1995, 2 U.S.C.
1532 (Unfunded Mandates Act), the
OCC and OTS must prepare a budgetary
impact statement before promulgating
any rule likely to result in a Federal
mandate that may result in the
expenditure by State, local, and tribal

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governments, in the aggregate, or by the
private sector, of $100 million or more
in any one year. If a budgetary impact
statement is required, section 205 of the
Unfunded Mandates Act also requires
the OCC and OTS to identify and
consider a reasonable number of
regulatory alternatives before
promulgating the rule. The OCC and
OTS have determined that their
respective portions of the proposed
rulemaking will not result in
expenditures by state, local, and tribal
governments, in the aggregate, or by the
private sector, of $100 million or more
in any one year. Accordingly, neither
the OCC nor OTS has prepared a
budgetary impact statement or
specifically addressed the regulatory
alternatives considered.
Paperwork Reduction Act
In accordance with the Paperwork
Reduction Act of 1995 (44 U.S.C. Ch.
3506; 5 CFR 1320 Appendix A.1), the
Agencies reviewed the proposed rule.
No collections of information pursuant
to the Paperwork Reduction Act are
contained in the proposed rule.
List of Subjects
12 CFR Part 4
Administrative practice and
procedure, Availability and release of
information, Confidential business
information, Contracting outreach
program, Freedom of information,
National banks, Organization and
functions (government agencies),
Reporting and recordkeeping
requirements, Women and minority
businesses.
12 CFR Part 19
Administrative practice and
procedure, Crime, Equal access to
justice, Investigation, National banks,
Penalties, Securities.
12 CFR Part 263
Administrative practice and
procedure, Claims, Crime, Equal access
to justice, Lawyers, Penalties.
12 CFR Part 264a
Conflicts of interest.

12 CFR Part 336
Conflict of interests.

Office of the Comptroller of the
Currency
12 CFR Chapter I
Authority and Issuance
For the reasons set forth in the
preamble, the OCC proposes to amend
parts 4 and 19 of title 12 of the Code of
Federal Regulations as follows:
1. The title of part 4 is revised to read
as follows:
PART 4—ORGANIZATION AND
FUNCTIONS, AVAILABILITY AND
RELEASE OF INFORMATION,
CONTRACTING OUTREACH
PROGRAM, POST-EMPLOYMENT
RESTRICTIONS FOR SENIOR
EXAMINERS
2. The authority citation for part 4 is
revised to read as follows:
Authority: 12 U.S.C. 93a. Subpart A also
issued under 5 U.S.C. 552; Subpart B also
issued under 5 U.S.C. 552; E.O. 12600 (3 CFR
1987 Comp., p. 235). Subpart C also issued
under 5 U.S.C. 301, 552; 12 U.S.C. 161, 481,
482, 484(a), 1442, 1817(a)(3), 1818(u) and (v),
1820(d)(6), 1820(k), 1821(c), 1821(o), 1821(t),
1831m, 1831p–1, 1831o, 1867, 1951 et seq.,
2601 et seq., 2801 et seq., 2901 et seq., 3101
et seq., 3401 et seq.; 15 U.S.C. 77uu(b),
78q(c)(3); 18 U.S.C. 641, 1905, 1906; 29
U.S.C. 1204; 31 U.S.C. 9701; 42 U.S.C. 3601;
44 U.S.C. 3506, 3510. Subpart D also issued
under 12 U.S.C. 1833e.

3. A new subpart E is added to part
4 to read as follows:
Subpart E—One-Year Restrictions on
Post-Employment Activities of Senior
Examiners
Sec.
4.72
4.73
4.74

Scope and purpose.
Definitions.
One-year post-employment
restrictions.
4.75 Effective date; waivers.
4.76 Penalties.

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Scope and purpose.

This subpart describes those OCC
examiners who are subject to the postemployment restrictions set forth in
section 10(k) of the Federal Deposit
Insurance Act (FDI Act) (12 U.S.C.
1820(k)) and implements those
restrictions for officers and employees
of the OCC.
§ 4.73

12 CFR Part 507
Ethics, Governmental employees, OTS
employees.

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Department of the Treasury

§ 4.72

12 CFR Part 308
Administrative practice and
procedure, Bank deposit insurance,
Claims, Crime, Equal access to justice,
Investigations, Lawyers, Penalties.

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12 CFR Part 509
Administrative practice and
procedure, Penalties.

Definitions.

For purposes of this subpart:
Bank holding company means any
company that controls a bank (as
provided in section 2 of the Bank

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Holding Company Act of 1956 (12
U.S.C. 1841 et seq.)).
Consultant. For purposes of this
subpart, a consultant for a national
bank, bank holding company, or other
company shall include only an
individual who works directly on
matters for, or on behalf of, such bank,
bank holding company, or other
company.
Control has the meaning given in
section 2 of the Bank Holding Company
Act (12 U.S.C. 1841(a)). For purposes of
this subpart, a foreign bank shall be
deemed to control any branch or agency
of the foreign bank.
Depository institution has the
meaning given in section 3 of the FDI
Act (12 U.S.C. 1813(c)). For purposes of
this subpart, a depository institution
includes an uninsured branch or agency
of a foreign bank, if such branch or
agency is located in any State.
Federal Reserve means the Board of
Governors of the Federal Reserve
System and the Federal Reserve Banks.
Foreign bank means any foreign bank
or company described in section 8(a) of
the International Banking Act of 1978
(12 U.S.C. 3106(a)).
Insured depository institution has the
meaning given in section 3 of the FDI
Act (12 U.S.C. 1813(c)(2)).
National bank means a national
banking association or a Federal branch
or agency of a foreign bank.
Senior examiner. For purposes of this
subpart, an officer or employee of the
OCC is considered to be the ‘‘senior
examiner’’ for a particular national bank
if’
(1) The officer or employee has been
commissioned by the OCC to conduct
examinations on behalf of the OCC;
(2) The officer or employee has been
assigned continuing, broad, and lead
responsibility for examining the
national bank; and
(3) The officer’s or employee’s
responsibilities for examining the
national bank—
(i) Represent a substantial portion of
the officer’s or employee’s assigned
responsibilities; and
(ii) Require the officer or employee to
interact routinely with officers or
employees of the national bank or its
affiliates.
§ 4.74 One-year post-employment
restrictions.

An officer or employee of the OCC
who serves as the senior examiner of a
national bank for two or more months
during the last twelve months of such
individual’s employment with the OCC
may not, within one year after leaving
the employment of the OCC, knowingly
accept compensation as an employee,

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officer, director or consultant from the
national bank, or any company
(including a bank holding company)
that controls the national bank.
§ 4.75

Effective date; waivers.

The post-employment restrictions set
forth in section 10(k) of the FDI Act and
§ 4.74 do not apply to any officer or
employee of the OCC, or any former
officer or employee of the OCC, if—
(a) The individual ceased to be an
officer or employee of the OCC before
December 17, 2005; or
(b) The Comptroller of the Currency
certifies, in writing and on a case-bycase basis, that granting the individual
a waiver of the restrictions would not
affect the integrity of the OCC’s
supervisory program.
§ 4.76

Penalties.

(a) Penalties under section 10(k) of
FDI Act. If a senior examiner of a
national bank, after leaving the
employment of the OCC, accepts
compensation as an employee, officer,
director, or consultant from that bank,
or any company (including a bank
holding company) that controls that
bank, then the examiner shall, in
accordance with section 10(k)(6) of the
FDI Act, be subject to one of the
following penalties—
(1) An order:
(i) Removing the individual from
office or prohibiting the individual from
further participation in the affairs of the
relevant national bank, bank holding
company, or other company that
controls such institution for a period of
up to five years; and
(ii) Prohibiting the individual from
participating in the affairs of any
insured depository institution for a
period of up to five years; or
(2) A civil monetary penalty of not
more than $250,000.
(b) Enforcement by appropriate
Federal banking agency. Violations of
§ 4.74 shall be administered or enforced
by the appropriate Federal banking
agency for the depository institution or
depository institution holding company
that provided compensation to the
former senior examiner. For purposes of
this paragraph, the appropriate Federal
banking agency for a company that is
not a depository institution or
depository institution holding company
shall be the Federal banking agency that
formerly employed the senior examiner.
(c) Scope of prohibition orders. Any
senior examiner who is subject to an
order issued under paragraph (a) of this
section shall, as required by 12 U.S.C.
1820(k)(6)(B), be subject to paragraphs
(6) and (7) of section 8(e) of the FDI Act
(12 U.S.C. 1818(e)(6)–(7)) in the same

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manner and to the same extent as a
person subject to an order issued under
section 8(e).
(d) Procedures. The procedures
applicable to actions under paragraph
(a) of this section are provided in
section 10(k)(6) of the FDI Act (12
U.S.C. 1820(k)(6)) and in 12 C.F.R. part
19.
(e) Remedies not exclusive. The OCC
may seek both of the penalties described
in paragraph (a) of this section. In
addition, a senior examiner who accepts
compensation as described in § 4.74
may be subject to other administrative,
civil or criminal remedies or penalties
as provided in law.
PART 19—RULES OF PRACTICE AND
PROCEDURE
4. The authority citation for part 19
continues to read as follows:
Authority: 5 U.S.C. 504, 554–557; 12
U.S.C. 93(b), 93a, 164, 505, 1817, 1818, 1820,
1831m, 1831o, 1972, 3102, 3108(a), 3909 and
4717; 15 U.S.C. 78(h) and (i), 78o–4(c), 78o–
5, 78q–1, 78s, 78u, 78u–2, 78u–3, and 78w;
28 U.S.C. 2461 note; 31 U.S.C. 330, 5321; and
42 U.S.C. 4012a.

5. In section 19.1:
a. Redesignate paragraph (g) as
paragraph (h);
b. Remove the word ‘‘and’’ at the end
of the paragraph (f); and
c. Add a new paragraph (g) to read as
follows:
§ 19.1

Scope.

*

*
*
*
*
(g) Removal, prohibition, and civil
monetary penalty proceedings under
section 10(k) of the FDI Act (12 U.S.C.
1820(k)) for violations of the postemployment restrictions imposed by
that section; and
*
*
*
*
*
Dated: July 26, 2005.
Julie L. Williams,
Acting Comptroller of the Currency.

Board of Governors of the Federal
Reserve System

45331

1831p–1, 1847(b), 1847(d), 1884(b),
1972(2)(F), 3105, 3107, 3108, 3907, 3909; 15
U.S.C. 21, 78o–4, 78o–5, 78u–2; and 28
U.S.C. 2461 note.

2. Section 263.1 is amended by
redesignating paragraph (g) as paragraph
(h), removing the word ‘‘and’’ at the end
of the paragraph (f), and adding new
paragraph (g) to read as follows:
§ 263.1

Scope.

*

*
*
*
*
(g) Removal, prohibition, and civil
monetary penalty proceedings under
section 10(k) of the FDI Act (12 U.S.C.
1820(k)) for violations of the special
post-employment restrictions imposed
by that section; and
*
*
*
*
*
3. New part 264a is added to read as
follows:
PART 264a—POST-EMPLOYMENT
RESTRICTIONS FOR SENIOR
EXAMINERS
Sec.
264a.1 What is the purpose and scope of
this part?
264a.2 Who is considered a senior examiner
of the Federal Reserve?
264a.3 What special post-employment
restrictions apply to senior examiners?
264a.4 When do these special restrictions
become effective and may they be
waived?
264a.5 What are the penalties for violating
these special post-employment
restrictions?
264a.6 What other definitions and rules of
construction apply for purposes of this
part?
Authority: 12 U.S.C. 1820(k).
§ 264a.1 What is the purpose and scope of
this part?

This part identifies those officers and
employees of the Federal Reserve that
are subject to the special postemployment restrictions set forth in
section 10(k) of the Federal Deposit
Insurance Act (FDI Act) and implements
those restrictions as they apply to
officers and employees of the Federal
Reserve.

12 CFR Chapter II

§ 264a.2 Who is considered a senior
examiner of the Federal Reserve?

Authority and Issuance

For purposes of this part, an officer or
employee of the Federal Reserve is
considered to be the ‘‘senior examiner’’
for a particular state member bank, bank
holding company or foreign bank if—
(a) The officer or employee has been
commissioned by the Board to conduct
examinations or inspections on behalf of
the Board;
(b) The officer or employee has been
assigned continuing, broad and lead
responsibility for examining or
inspecting the state member bank, bank
holding company or foreign bank; and

For the reasons set forth in the
preamble, the Board proposes to amend
part 263 and add a new part 264a to
Title 12, Chapter II, of the Code of
Federal Regulations as follows:
PART 263—RULES OF PRACTICE FOR
HEARINGS
1. The authority citation for part 263
continues to read as follows:
Authority: 5 U.S.C. 504; 12 U.S.C. 248,
324, 504, 505, 1817(j), 1818, 1828(c), 1831o,

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Federal Register / Vol. 70, No. 150 / Friday, August 5, 2005 / Proposed Rules

(c) The officer’s or employee’s
responsibilities for examining,
inspecting and supervising the state
member bank, bank holding company or
foreign bank—
(1) Represent a substantial portion of
the officer’s or employee’s assigned
responsibilities; and
(2) Require the officer or employee to
interact routinely with officers or
employees of the state member bank,
bank holding company or foreign bank
or its affiliates.
§ 264a.3 What special post-employment
restrictions apply to senior examiners?

(a) Senior Examiners of State Member
Banks. An officer or employee of the
Federal Reserve who serves as the
senior examiner of a state member bank
for two or more months during the last
twelve months of such individual’s
employment with the Federal Reserve
may not, within one year after leaving
the employment of the Federal Reserve,
knowingly accept compensation as an
employee, officer, director or consultant
from—
(1) The state member bank; or
(2) Any company (including a bank
holding company) that controls the state
member bank.
(b) Senior Examiners of Bank Holding
Companies. An officer or employee of
the Federal Reserve who serves as the
senior examiner of a bank holding
company for two or more months during
the last twelve months of such
individual’s employment with the
Federal Reserve may not, within one
year of leaving the employment of the
Federal Reserve, knowingly accept
compensation as an employee, officer,
director or consultant from—
(1) The bank holding company; or
(2) Any depository institution that is
controlled by the bank holding
company.
(c) Senior Examiners of Foreign
Banks. An officer or employee of the
Federal Reserve who serves as the
senior examiner of a foreign bank for
two or more months during the last
twelve months of such individual’s
employment with the Federal Reserve
may not, within one year of leaving the
employment of the Federal Reserve,
knowingly accept compensation as an
employee, officer, director or consultant
from—
(1) The foreign bank; or
(2) Any branch or agency of the
foreign bank located in the United
States; or
(3) Any other depository institution
controlled by the foreign bank.

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§ 264a.4 When do these special
restrictions become effective and may they
be waived?

The post-employment restrictions set
forth in section 10(k) of the FDI Act and
§ 264a.3 do not apply to any officer or
employee of the Federal Reserve, or any
former officer or employee of the
Federal Reserve, if—
(a) The individual ceased to be an
officer or employee of the Federal
Reserve before December 17, 2005; or
(b) The Chairman of the Board of
Governors certifies, in writing and on a
case-by-case basis, that granting the
individual a waiver of the restrictions
would not affect the integrity of the
Federal Reserve’s supervisory program.
§ 264a.5 What are the penalties for
violating these special post-employment
restrictions?

(a) Penalties under section 10(k) of
FDI Act.—A senior examiner of the
Federal Reserve who, after leaving the
employment of the Federal Reserve,
violates the restrictions set forth in
§ 264a.3 shall, in accordance with
section 10(k)(6) of the FDI Act, be
subject to one or both of the following
penalties—
(1) An order:
(i) Removing the individual from
office or prohibiting the individual from
further participation in the affairs of the
relevant state member bank, bank
holding company, foreign bank or other
depository institution or company for a
period of up to five years; and
(ii) Prohibiting the individual from
participating in the affairs of any
insured depository institution for a
period of up to five years; and/or
(2) A civil monetary penalty of not
more than $250,000.
(b) Imposition of penalties. The
penalties described in paragraph (a) of
this section shall be imposed by the
appropriate Federal banking agency as
determined under section 10(k)(6) of the
FDI Act, which may be an agency other
than the Federal Reserve.
(c) Scope of prohibition orders. Any
senior examiner who is subject to an
order issued under paragraph (a) of this
section shall, as required by section
10(k)(6)(B) of the FDI Act, be subject to
paragraphs (6) and (7) of section 8(e) of
the FDI Act in the same manner and to
the same extent as a person subject to
an order issued under section 8(e).
(d) Procedures. The procedures
applicable to actions under paragraph
(a) of this section are provided in
section 10(k)(6) of the FDI Act.
(e) Other penalties. The penalties set
forth in paragraph (a) of this section are
not exclusive, and a senior examiner
who violates the restrictions in § 264a.3

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also may be subject to other
administrative, civil or criminal
remedies or penalties as provided in
law.
§ 264a.6 What other definitions and rules
of construction apply for purposes of this
part?

For purposes of this part—
(a) Bank holding company means any
company that controls a bank (as
provided in section 2 of the Bank
Holding Company Act of 1956 (12
U.S.C. 1841 et seq.)).
(b) A person shall be deemed to act as
a consultant for a bank or other
company only if such person works
directly on matters for, or on behalf of,
such bank or other company.
(c) Control has the meaning given in
section 2 of the Bank Holding Company
Act.
(d) Depository institution has the
meaning given in section 3 of the FDI
Act and includes an uninsured branch
or agency of a foreign bank, if such
branch or agency is located in any State.
(e) Federal Reserve means the Board
of Governors of the Federal Reserve
System and the Federal Reserve Banks.
(f) Foreign bank means any foreign
bank or company described in section
8(a) of the International Banking Act of
1978 (12 U.S.C. 3106(a)).
(g) Insured depository institution has
the meaning given in section 3 of the
FDI Act.
Dated: July 27, 2005.
By order of the Board of Governors of the
Federal Reserve System.
Jennifer J. Johnson,
Secretary of the Board.

Federal Deposit Insurance Corporation
12 CFR Chapter III
Authority and Issuance
For the reasons set forth in the
preamble, the FDIC proposes to amend
chapter III of title 12 of the Code of
Federal Regulations as follows:
PART 336—FDIC EMPLOYEES
1. Subpart C is added to Part 336 to
read as follows:
Subpart C—One-Year Restriction on
Post-Employment Activities of Senior
Examiners
Sec.
336.10 Purpose and scope.
336.11 Definitions.
336.12 One-year post-employment
restriction.
336.13 Penalties.
Authority: 12 U.S.C. 1819 and 1820(k).

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Federal Register / Vol. 70, No. 150 / Friday, August 5, 2005 / Proposed Rules
§ 336.10

Purpose and scope.

This subpart applies to officers or
employees of the FDIC who are subject
to the post-employment restrictions set
forth in section 10(k) of the Federal
Deposit Insurance Act, 12 U.S.C.
1820(k), and implements those
restrictions as they apply to officers and
employees of the FDIC.
§ 336.11

Definitions.

For purposes of this subpart:
(a) Bank holding company has the
meaning given to such term in section
2 of the Bank Holding Company Act of
1956 (12 U.S.C. 1841(a)).
(b) A consultant for an insured
depository institution or other company
shall include only individuals who
work directly on matters for, or on
behalf of, such institution or other
company.
(c) Control has the meaning given to
such term in section 336.3(b), and a
foreign bank shall be deemed to control
any insured branch of the foreign bank.
(d) Depository institution means any
bank or savings association, including a
branch of a foreign bank, if such branch
is located in the United States and is
insured by the FDIC.
(e) Foreign bank means any bank or
company described in section 8(a) of the
International Banking Act of 1978 (12
U.S.C. 3106(a)).
(f) Savings and loan holding company
has the meaning given to such term in
section 10(a)(1)(D) of the Home Owners’
Loan Act (12 U.S.C. 1467a(a)(1)(D)).
(g) A senior examiner for an insured
depository institution means an officer
or employee of the FDIC—
(1) Who has been commissioned by
the FDIC to conduct examinations or
inspections of insured depository
institutions on behalf of the FDIC;
(2) Who has been assigned
continuing, broad, and lead
responsibility for the examination or
inspection of the institution;
(3) Who routinely interacts with
officers or employees of the institution
or its affiliates; and
(4) Whose responsibilities with
respect to the institution represent a
substantial portion of the FDIC officer or
employee’s overall responsibilities.
§ 336.12 One-year post-employment
restriction.

(a) Prohibition. An officer or
employee of the FDIC who serves as a
senior examiner of an insured
depository institution for at least 2
months during the last 12 months of
that individual’s employment with the
FDIC may not, within 1 year after the
termination date of his or her
employment with the FDIC, knowingly

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accept compensation as an employee,
officer, director, or consultant from—
(1) The insured depository institution;
or
(2) Any company (including a bank
holding company or savings and loan
holding company) that controls such
institution.
(b) Waivers. The post-employment
restrictions in paragraph (a) of this
section will not apply to a senior
examiner if the FDIC Chairperson
certifies in writing and on a case-by-case
basis that a waiver of the restrictions
will not affect the integrity of the FDIC’s
supervisory program.
(c) Effective Date. The postemployment restrictions in paragraph
(a) of this section will not apply to any
officer or employee of the FDIC, or any
former officer or employee of the FDIC,
who ceased to be an officer or employee
of the FDIC before December 17, 2005.
§ 336.13

Penalties.

(a) Penalties under section 10(k) of the
FDI Act. A senior examiner of the FDIC
who violates the post-employment
restrictions set forth in § 336.12 shall be
subject to the following penalties—
(1) An order—
(i) Removing such person from office
or prohibiting such person from further
participation in the affairs of the
relevant insured depository institution
or company (including a bank holding
company or savings and loan holding
company) that controls such institution
for a period of up to five years, and
(ii) Prohibiting any further
participation by such person, in any
manner, in the affairs of any insured
depository institution for a period of up
to five years; or
(2) A civil monetary penalty of not
more than $250,000; or
(3) Both.
(b) Enforcement by appropriate
Federal banking agency of hiring entity.
Violations of § 336.12 shall be enforced
by the appropriate Federal banking
agency of the depository institution,
depository institution holding company,
or other company at which the violation
occurred, as determined under section
10(k)(6), which may be an agency other
than the FDIC.
(c) Scope of prohibition orders. Any
senior examiner who is subject to an
order issued under paragraph (a)(1) of
this section shall, as required by 12
U.S.C. 1820(k)(6)(B), be subject to
paragraphs (6) and (7) of section 8(e) in
the same manner and to the same extent
as a person subject to an order issued
under section 8(e).
(d) Other penalties. The penalties set
forth in paragraph (a) of this section are
not exclusive, and a senior examiner

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45333

who violates the restrictions in § 336.12
may also be subject to other
administrative, civil, or criminal
remedies or penalties as provided by
law.
PART 308—RULES OF PRACTICE AND
PROCEDURES
1. The authority for part 308
continues to read as follows:
Authority: 5 U.S.C. 504, 554–557; 12
U.S.C. 93(b), 164, 505, 1815(e), 1817, 1818,
1820, 1828, 1829, 1829b, 1831i, 1831m(g)(4),
1831o, 1831p-1, 1832(c), 1884(b), 1972, 3102,
3108(a), 3349, 3909, 4717; 15 U.S.C. 78 (h)
and (i), 78o–4(c), 78o–5, 78q–1, 78s, 78u,
78u–2, 78u–3, 78w, 6801(b), 6805(b)(1); 28
U.S.C. 2461 note; 31 U.S.C. 330, 5321; 42
U.S.C. 4012a; Sec. 3100(s) Pub. L. 104–134,
110 Stat. 1321–358.

2. In § 308.1, redesignate paragraph (g)
as paragraph (h), remove the word
‘‘and’’ at the end of the paragraph (f),
and add a new paragraph (g) to read as
follows:
§ 308.1

Scope.

*

*
*
*
*
(g) Proceedings under section 10(k) of
the FDIA (12 U.S.C. 1820(k)) to impose
penalties for violations of the postemployment restrictions under that
subsection; and
*
*
*
*
*
Dated at Washington, DC, this 19th day of
July, 2005.
By order of the Board of Directors.
Federal Deposit Insurance Corporation.
Robert E. Feldman,
Executive Secretary.

Department of the Treasury
Office of Thrift Supervision
12 CFR Chapter V
Authority and Issuance
For the reasons set forth in the
preamble, OTS proposes to amend
chapter V of title 12 of the Code of
Federal Regulations as follows:
1. Add a new part 507 to read as
follows:
PART 507—RESTRICTIONS ON POSTEMPLOYMENT ACTIVITIES OF SENIOR
EXAMINERS
Sec.
507.1 What does this part do?
507.2 Who is a senior examiner?
507.3 What post-employment restrictions
apply to senior examiners?
507.4 When will OTS waive the postemployment restrictions?
507.5 What are the penalties for violating
the post-employment restrictions?
Authority: 12 U.S.C. 1462a, 1463 and
1820(k).

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45334
§ 507.1

Federal Register / Vol. 70, No. 150 / Friday, August 5, 2005 / Proposed Rules
What does this part do?

This part implements section 10(k) of
the Federal Deposit Insurance Act
(FDIA), which prohibits senior
examiners from accepting compensation
from certain companies following the
termination of their employment. See 12
U.S.C. 1820(k). Except where otherwise
provided, the terms used in this part
have the meanings given in section 3 of
the FDIA (12 U.S.C. 1813).
§ 507.2

Who is a senior examiner?

An individual is a senior examiner for
a particular savings association or
savings and loan holding company if:
(a) The individual is an officer or
employee of OTS (including a special
government employee) who has been
designated by OTS to conduct
examinations or inspections of savings
associations or savings and loan holding
companies;
(b) The individual has been assigned
continuing, broad and lead
responsibility for the examination or
inspection of that savings association or
savings and loan holding company; and
(c) The individual’s responsibilities
for examining, inspecting, or
supervising that savings association or
savings and loan holding company:
(1) Represent a substantial portion of
the individual’s assigned
responsibilities at OTS; and
(2) Require the individual to interact
on a routine basis with officers and
employees of the savings association,
savings and loan holding company, or
its affiliates.

(i) The savings and loan holding
company; or
(ii) Any depository institution that is
controlled by the savings and loan
holding company.
(b) Effective date. The postemployment restrictions in paragraph
(a) of this section do not apply to any
senior examiner who terminated his
employment at OTS before December
17, 2005.
(c) Definitions. For the purposes of
this section:
(1) Consultant. An individual acts as
a consultant for a savings association or
other company only if he or she directly
works on matters for, or on behalf of, the
savings association or company.
(2) Control. Control has the same
meaning given in part 574 of this
chapter.
§ 507.4 When will OTS waive the postemployment restrictions?

The post-employment restriction in
§ 507.3 will not apply to a senior
examiner if the Director certifies in
writing and on a case-by-case basis that
a waiver of the restriction will not affect
the integrity of OTS’s supervisory
program.
§ 507.5 What are the penalties for violating
the post-employment restrictions?

(d) Other penalties. The penalties
under this section are not exclusive. A
senior examiner who violates the
restriction in § 507.3 may also be subject
to other administrative, civil, or
criminal remedy or penalty as provided
by law.
PART 509—RULES OF PRACTICE AND
PROCEDURES IN ADJUDICATORY
PROCEEDINGS
2. The authority citation for part 509
is amended to read as follows:
Authority: 5 U.S.C. 504, 554–557; 12
U.S.C. 1464, 1467, 1467a, 1468, 1817(j), 1818,
1820(k), 3349, 4717; 15 U.S.C. 78(l); 78o–5,
78u–2; 28 U.S.C. 2461 note; 31 U.S.C. 5321;
42 U.S.C. 4012a.

3. In § 509.1, redesignate paragraph (g)
as paragraph (h) and add a new
paragraph (g) to read as follows:
§ 509.1

Scope.

*

*
*
*
*
(g) Proceedings under section 10(k) of
the FDIA (12 U.S.C. 1820(k)) to impose
penalties on senior examiners for
violation of post-employment
prohibitions.
*
*
*
*
*
Dated: July 26, 2005.
Office of Thrift Supervision.
Richard M. Riccobono,
Acting Director.
[FR Doc. 05–15468 Filed 8–4–05; 8:45 am]

(a) Penalties. A senior examiner who
violates § 507.3 shall, in accordance
with 12 U.S.C. 1820(k)(6), be subject to
one or both of the following penalties:
BILLING CODE 4810–33, 6210–01, 6714–01, 6720–01–P
(1) An order:
(i) Removing the person from office or
prohibiting the person from further
participating in the Sfmt 4702 E:\FR\FM\05AUP1.SGM 05AUP1
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§ 507.3 What post-employment restrictions affairs of the relevant depository
apply to senior examiners?
institution, savings and loan holding
(a) Prohibition. (1) Senior examiner of company, bank holding company or
savings association. An individual who other company for up to five years; and
serves as a senior examiner of a savings
(ii) Prohibiting the person from
association for two or more of the last
participating in the affairs of any
12 months of his or her employment
insured depository institution for up to
with OTS may not, within one year after five years.
the termination date of his or her
(2) A civil money penalty not to
employment with OTS, knowingly
exceed $250,000.
(b) Scope of prohibition orders. Any
accept compensation as an employee,
senior examiner who is subject to an
officer, director, or consultant from:
(i) The savings association; or
order issued under paragraph (a)(1) of
(ii) A savings and loan holding
this section shall be subject to 12 U.S.C.
company, bank holding company, or
1818(e)(6) and (7) in the same manner
any other company that controls the
and to the same extent as a person
savings association.
subject to an order issued under 12
(2) Senior examiner of a savings and
U.S.C. 1818(e).
(c) Procedures. 12 U.S.C. 1820(k)
loan holding company. An individual
describes the procedures that are
who serves as a senior examiner of a
applicable to actions under paragraph
savings and loan holding company for
two or more of the last 12 months of his (a) of this section and the appropriate
Federal banking agency authorized to
or her employment with OTS may not,
take the action, which may be an agency
within one year after the termination
other than OTS. Where OTS is the
date of his or her employment with
OTS, knowingly accept compensation as appropriate Federal banking agency, it
will conduct administrative proceedings
an employee, officer, director, or
under 12 CFR part 509.
consultant from:


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102