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                                            Circular 2120.1 

                                            CONTACT         TELEPHONE
                                                            NUMBER

                                            Rose M. Freeman \(202\)
                                                            942-3894

                                            DATE            

                                            September 24,   
                                            1999            

                                            DATE OF         
                                            CANCELLATION    
                                            *(Bulletins     
                                            Only)*          

                                                            
  ----------------------------------------- --------------- --------------

> TO: All Employees
>
> FROM: Arleas Upton Kea
>
> Director, Division of Administration (DOA)
>
> SUBJECT: [Personnel Suitability Program]{.underline}

1.  [Purpose]{.underline}. To establish and implement the guidelines and
    responsibilities for the Personnel Suitability Program; and to
    inform management officials and employees of the Corporation's
    policy regarding the Personnel Suitability Program.

2.  [Revision]{.underline}. FDIC Circular 2120.1, The Corporation's
    Personnel Security Program, dated July 3, 1978, is revised and
    superseded.

3.  [Scope]{.underline}. This circular applies to all Federal Deposit
    Insurance Corporation employees and applicants for employment.

4.  [Policy]{.underline}. It is the Corporation's policy that employees
    and applicants for employment undergo a National Agency Check and
    Inquiry with Credit (NACIC), or other appropriate background
    investigation according to the positions they hold, in order to
    comply with the Resolution Trust Corporation Completion Act (RTCCA)
    and relevant Federal suitability regulations. Investigations are not
    required for those employed on an intermittent, seasonal, per diem,
    or temporary basis which does not exceed an aggregate of 180 days,
    either in a single continuous appointment or a series of
    appointments.

5.  [Forms Availability]{.underline}. Forms FDIC 1600/10, Notice and
    Authorization Pertaining to Consumer Reports, and FDIC 1600/11,
    Position Designation Record, may be obtained from the Security
    Management Section, Acquisition and Corporate Services Branch
    (ACSB), Division of Administration (DOA).

> 6\. [Questions]{.underline}. Questions regarding the provisions
> outlined in this circular should be directed to the Corporation's
> Personnel Security Officer, Security Management Section, ACSB, DOA.
>
> 7\. [Effective Date]{.underline}. This circular is effective
> immediately.

#########  {#section .unnumbered}

######### 

TABLE OF CONTENTS

**SUBCHAPTER 1. GENERAL PROVISIONS** 1

1-1. Personnel Suitability Program 1

> 1-2. Policy 1

1-3. Scope 1

1-4. Definitions 2

1-5. Responsibilities 4

6.  Position Sensitivity Designation 5

7.  Adjudication 6

1-8. Investigation Records 6

**SUBCHAPTER 2. SUITABILITY POSITION RISK DESIGNATION FOR**

**PUBLIC TRUST POSITIONS** 7

2-1. General Policy 7

2-2. Designating Officials 7

2-3. Position Types and Risk Levels 7

**Table 1** U.S. OPM Criteria for Designating Computer/ADP Position Risk

Levels 10

**SUBCHAPTER 3. INVESTIGATIVE REQUIREMENTS** 11

3-1. General Policy 11

3-2. Position Designation and Corresponding Investigations 11

**Table 2** Investigations for Public Trust Positions - New Federal
Appointment

Action 12

**Table 3** Reinvestigation/Update/Upgrade 13

3-3. Procedures 13

4.  Investigations of Incumbents and Other Corporation

> Employees Experiencing a Change in Position Risk
>
> Level 13

3-5. Reinstatements 14

3-6. Periodic Reinvestigation of Incumbents 14

3-7. Exceptions to Investigative Requirements 14

3-8. Initiating an Investigation 14

**SUBCHAPTER 4. SUITABILITY ADJUDICATION** 16

4-1. General Policy 16

4-2. Initial Review 16

4-3. Preliminary Determinations 16

4.  Referrals to the Labor and Employee Relations

> Section 17

4-5. Special Cases 17

6.  Adjudication 18

**SUBCHAPTER 5. RECORD ON SENSITIVITY DESIGNATION, ACCESS LEVEL,**

**AND INVESTIGATIVE REQUIREMENT** 20

5-1. Maintenance of Record 20

**SUBCHAPTER 6. PROGRAM REQUIREMENTS AND ADMINSTRATION** 21

6-1. Responsibility 21

6-2. Safeguarding the Rights of Individuals 21

> 6-3. Records Maintenance 21
>
> 6-4. Reports to U.S. Office of Personnel Management 22

# 

# 

# APPENDICES

Appendix A -- Notice and Authorization Pertaining to Consumer Reports

Appendix B -- A Summary of Your Rights Under the Fair Credit Reporting
Act

Appendix C -- U.S. OPM Adjudication Factors

Appendix D -- Position Designation Record

Appendix E -- Sample Letter Requesting Information

**SUBCHAPTER 1. GENERAL PROVISIONS**

**1-1.** **Personnel Suitability Program**

This directive establishes the responsibilities, policy requirements,
and procedures for the Corporation\'s Personnel Suitability Program.

The authority for determining suitability for Federal employment in the
competitive service is vested in 5 U.S.C. 3301, 3302, and 7301,
Executive Order (E.O.) 10577, as amended by E.O. 12107; and 5 CFR Parts
5, 731, and 736.

Applicants, appointees, and employees will be subject to mandatory bars
outlined in 12 CFR Part 336, Minimum Standards of Fitness for Employment
With the Federal Deposit Insurance Corporation, which prohibits any
person from becoming employed or providing service to, or on behalf of,
the FDIC who has:

A. been convicted of any felony;

B. been removed from, or prohibited from participating in the affairs of
any insured depository institution pursuant to any final enforcement
action by any appropriate Federal banking agency;

C. demonstrated a pattern or practice of defalcation regarding
obligations to insured depository institutions; or

D. caused a substantial loss, in an amount in excess of \$50,000, to
Federal deposit insurance funds.

\[See FDIC Circular 2120.5, Minimum Standards for Employment with the
Federal Deposit Insurance Corporation (\"Corporation\") as Mandated by
the Resolution Trust Corporation Completion Act (\"RTCCA\") § 5(c),
which also outlines and discusses the above mandatory bars.\]

2.  **Policy**

The Corporation will employ and retain in employment only those persons
who meet all Federal requirements for suitability, i.e., character,
reputation, honesty, integrity, trustworthiness, and whose employment or
conduct would not jeopardize the accomplishment of the Corporation's
duties or responsibilities.

**1-3. Scope**

The provisions of this directive apply to all applicants, appointees,
and employees of the Corporation.

1-4. Definitions

A. [Background Investigation (BI)]{.underline}. The BI consists of a
Personal Subject Interview (PRSI), a basic National Agency Check (NAC)
including a credit search, personal interviews with employment,
residence (neighbors), educational sources, and law enforcement
searches. Total coverage is for a five-year period. A BI is required for
all High Risk positions.

B. [Credit Searches]{.underline}. Credit searches are conducted as part
of the Minimum Background Investigation (MBI), Limited Background
Investigation (LBI), Background Investigation (BI), Single Scope
Background Investigation (SBI), Periodic Reinvestigation (PRI), Upgrade,
and Update cases. Credit searches will be conducted in conjunction with
a National Agency Check and Inquiries (NACI) upon initial entry on duty
for all appointees, and as needed to review the suitability of an
employee who is moving from a low or moderate risk position to a high
risk position. Credit searches will also be completed upon reinstatement
or transfer of a Federal employee whose BI is otherwise in order. Credit
searches are not routinely performed on current employees.

Amendments to the Fair Credit Reporting Act (FCRA) (15 U.S.C. § 1681, et
seq.) address permissible purposes for which consumer reports may be
furnished and conditions for furnishing and using consumer reports for
employment purposes. Subsection 1681b (b)(2) of Title 15 requires that
the applicant/employee be notified that a consumer report may be used,
and the applicant/employee must authorize this use in writing before the
consumer report is obtained. (See Appendix A)

Subsection 1681b (b)(3) of Title 15 requires that, before taking an
action adverse to the employee or applicant for employment based in
whole or in part on a consumer report, the agency must notify the
consumer of the proposed negative action, provide the consumer with a
copy of the report, and a copy of the Federal Trade Commission's (FTC)
Consumer Rights Notice. (See Subchapter 4-6.e. and Appendix B)

C. [Limited Background Investigation (LBI)]{.underline}. The LBI
consists of a personal subject interview, a basic National Agency Check
including a credit search, personal interviews with employment,
residence, and educational

sources, and law enforcement searches. Personal coverage is for a 3-year
period, while record searches are for a 5-year period.

D. [Minimum Background Investigation (MBI)]{.underline}. The MBI
consists of a personal subject interview, a basic National Agency Check,
and a credit search covering a 5-year period. The MBI or LBI may be
conducted for Moderate Risk positions.

E. [National Agency Check (NAC)]{.underline}. The NAC is a search of the
following four (4) indices:

\(1\) [U.S. Office of Personnel Management (U.S. OPM)
Security/Suitability Investigations Index (SII)]{.underline} contains
investigations completed by U.S. OPM and by other Federal agencies;

\(2\) [Federal Bureau of Investigation (FBI) Identification Division
(FBIF)]{.underline} contains a fingerprint index and name file;

\(3\) [FBI Records Management Division (FBIN)]{.underline} contains
files and records of all other investigations (e.g., background,
criminal, loyalty, intelligence); and

\(4\) [Defense Clearance and Investigations Index (DCII)]{.underline}
contains investigations, including criminal investigations, conducted on
civilian and military personnel of the Department of Defense.

**Note**: The NAC is not a background investigation. It is one of the
components that make up a background investigation.

F. [National Agency Check and Inquiries (NACI)]{.underline}. The NACI is
a National Agency Check that also includes written inquiries sent to
employers, educational institutions, law enforcement agencies, and
references. The NACI is required for Low Risk positions.

G. [Periodic Reinvestigation (PRI)]{.underline}. The PRI consists of a
National Agency Check, a credit search, a Personal Subject Interview,
selected record searches (e.g., law enforcement, personnel security
files, and official personnel files (OPF)). Coverage is for a 5-year
period. A PRI is required for High Risk positions.

H. [Personal Subject Interview (PRSI)]{.underline}. A Personal Subject
Interview is an essential element of a background investigation and
provides the subject of an investigation the opportunity to update,
clarify and explain information on their investigative questionnaire.

I. [Public Trust Positions]{.underline}. Public Trust Positions have the
potential for affecting the integrity, efficiency, and/or effectiveness
of the Corporation's mission, and when breached, diminishes public
confidence. Virtually all FDIC employees may be deemed to be in Public
Trust Positions. Classic public trust functions include law enforcement,
public safety and health, collection of revenue, and regulation of
business, industry, or finance. Positions with responsibility for
managing programs or operations require a high degree of public trust
because of their ability to significantly affect the accomplishment of
the Corporation's mission. Included in the group above are positions
with responsibility for managing a significant portion of a program or a
program within a given geographic district or area.

The public trust risk levels are listed and defined below:

\(1\) **High Risk** positions have the potential for exceptionally
serious damage to the Corporation or Corporation's mission.

\(2\) **Moderate Risk** positions have the potential for moderate risk
to the Corporation's programs or mission, such as delivery of customer
services to the public.

\(3\) **Low Risk** positions involve duties of limited relation to the
Corporation's mission.

**Note**: See Subchapter 2-3 for additional information on position risk
levels.

J. [Reimbursable Suitability/Security Investigation (RSI)]{.underline}.
The RSI is a concentrated investigation to obtain additional information
to resolve issues, or to establish a history or pattern of behavior.

K. [Single Scope Background Investigation (SBI)]{.underline}. The Single
Scope Background Investigation consists of a Personal Subject Interview,
National Agency Check, credit search, personal interviews of sources,
written inquiries, and record searches, which cover specific areas of
the subject\'s background during the past 10 years.

L. [Suitability]{.underline}. Suitability refers to identifiable
character traits and past conduct, which are sufficient to determine
whether a given individual is or is not likely to be able to carry out
the duties of a Federal job. Suitability is distinguish-able from a
person\'s ability to fulfill the qualification requirements of a job, as
measured by experience, education, knowledge, skills, and abilities.

M. [Update Investigations (LDI -- Update of Previous LBI Completed, BDI
-- Update of Previous BI Completed, SDI -- Update of Previous SBI
Completed)]{.underline}. These investigations are conducted due to a
break in service or to fulfill Corporation requirements. They consist of
the same coverage as the prior

investigation (LBI, BI, and SBI) from 13 to 60 months of the previous
investigation's closing date. (Updated LBI=LDI, updated BI=BDI, and
updated SBI=SDI.)

N. [Upgrade Investigations (BGI -- Upgrade to BI from LBI Completed, LGI
-- Upgrade to LBI from an MBI Completed, SGI -- Upgrade to SBI from BI
Completed)]{.underline}. These investigations are conducted when there
is a change in an employee\'s position risk level from a lower to a
higher sensitivity designation. These investigations provide the proper
coverage for the level of investigation

currently required and also take into account the scope of the previous
investigation. This investigation is for movement upward in sensitivity
and covers the period from 0 to 60 months of the previous
investigation's closing date. (BGI=LBI to BI, LGI=MBI to LBI, and SGI=BI
to SBI.)

**1-5. Responsibilities**

A. **Chairman**. The Chairman of the Corporation, as agency head, is
responsible overall for establishment of an effective Personnel
Suitability Program.

B. **Personnel Security Officer**. The Chief, Employee/Contractor
Security Unit, Security Management Section, ACSB, DOA, is the delegated
Personnel Security Officer and is responsible for:

\(1\) Administration of the Corporation\'s Personnel Suitability
Program;

\(2\) Ensuring that each Corporation program and all positions are
properly designated;

\(3\) Initiating appropriate security/suitability background
investigations and updating investigations corresponding to position
risk levels;

\(4\) Reviewing the results of background investigations;

\(5\) Establishing security/suitability determinations of persons
employed by the Corporation in a timely manner; and

\(6\) Complying with the Personnel Suitability Program administration
and reporting requirements of CFR Parts 5, 731, and 732.

C. **[Each Division/Office Director, or Designee]{.underline}**, is
responsible for completing the risk designations for the positions in
his/her division/office and assuring that the designations accurately
reflect the risk posed to the

Corporation. The Division/Office Director, or designee, should ensure
that position risk designations are appropriately revised whenever the
risk of a position changes.

D. [**The** **Suitability and Adjudications Group, Employee/Contractor
Security Unit, Security Management Section**]{.underline}, oversees the
day-to-day operation of the Personnel Suitability Program.

**1-6. Position Sensitivity Designation**

The Corporation has adopted the Risk Designation System established by
U.S. OPM, (see Subparagraph 2-1). Position risk level designations may
change due to the following:

A. A Division/Office, in consultation with the Personnel Security
Officer, may determine that a different risk designation is appropriate
when changes in an employee\'s responsibilities or duties are made. In
such circumstances, a higher or lower risk level for a given position
may be designated. Reinvestigation of the incumbent employee will be
required only if the position is redesignated high risk. Such
investigations shall be initiated after the redesignation becomes final.

B. The employee changes positions and moves into a position with a
different sensitivity designation. The employee will undergo
reinvestigation only if

the position is designated high risk, and if the required investigation
for the new position has not been previously completed or was not
completed within the last 5 years. (**Note**: All high risk positions
are reinvestigated every 5 years.)

**1-7. Adjudication**

Assessment of an employee\'s suitability for employment with the
Corporation is made based on the employee\'s conduct, which may have an
adverse impact on the efficiency of the Corporation\'s operations. The
employee\'s suitability is assessed:

A. According to standards established by U.S. OPM (See Subchapter 4,
Suitability Adjudication and Appendix C, U.S. OPM Adjudication Factors);
and

B. Pursuant to the requirements of 12 CFR Part 336, Minimum Standards of
Fitness for Employment With the Federal Deposit Insurance Corporation,
and FDIC Circular 2120.5, which outlines the employment standards
established by the RTCCA effective June 17, 1994. As outlined in 12 CFR
336, the Corporation will not require the enforcement of these minimum
standards against incumbent employees of the FDIC under an appointment
authorized by Title 5 U.S.C. on or before June 17, 1994, for
noncompliance which occurred prior to that date. All employees,
regardless of date of first appointment or tenure, will be subject to
this regulation for any noncompliance with these standards that occur on
or after June 18, 1994.

**1-8.** **Investigation Records**

The Security Management Section maintains investigative files in a
secured area, separate from personnel records. Information contained in
these files shall be used and disseminated only in accordance with the
Privacy Act, and:

A. Only authorized personnel shall have access to the records;

B. Disclosure to officials of the Corporation shall be made only on a
need-to-know basis and all such disclosures shall be documented;

C. Reports of Investigation are part of the U.S. OPM record system
OPM/Central-9 and are subject to the routine uses listed in the Federal
Register for that record system; and

Pursuant to the Privacy Act, the subject of a background investigation
may request a copy of the investigation from U.S. OPM by sending a
request to U.S. OPM, Federal Investigations Processing Center (FOI/PA),
Boyers, Pennsylvania 16018.

**SUBCHAPTER 2. SUITABILITY POSITION RISK DESIGNATION**

**FOR PUBLIC TRUST POSITIONS**

**2-1.** **General Policy**

The Corporation has adopted the Risk Designation System established by
U.S. OPM. The Risk Designation System requires corporate officials to
designate risk levels for every position in the Corporation. Such
designations must be commensurate with the responsibilities and
attributes of the positions as they relate to the efficiency of the
Corporation\'s operations. Decisions regarding the risk level of an
employee\'s position are at the sole discretion of the Corporation.

**2-2.** **Designating Officials**

Each Division/Office Director, or designee, is responsible for
determining the sensitivity level of the positions for his/her
respective organization, and for completing form FDIC 1600/11, Position
Designation Record (See Appendix D).

The Personnel Security Officer shall:

A. Administer the designation process and make adjustments in the
designations as necessary;

B. Maintain the Position Designation Records which properly document the
designation process; and

C. Coordinate with the Personnel Services Branch to ensure that the
final designations are entered into the National Finance Center Position
Management System.

**2-3.** **Position Types and Risk Levels**

It has been determined that most positions within the Corporation are
Public Trust Positions. In a Public Trust Position, an employee\'s
action or inaction has a potential to affect the integrity, efficiency,
and effectiveness of the Corporation\'s operations. Positions involving
high degrees of public trust require a more thorough background
investigation than do positions requiring only the finding that an
applicant or an incumbent has the requisite suitability of character to
hold Federal employment.

A. [Suitability]{.underline}. Eligibility for employment with the
Corporation is based on suitability as measured from past and present
conduct, which determines whether or not an employee can perform his or
her duties with efficiency and effectiveness. Suitability is
distinguishable from a person\'s ability to fulfill the

qualification requirements of a job, as measured by experience,
education, knowledge, skills, and abilities. Position risk levels are
based on the amount of

damage a person with questionable suitability characteristics (judged
from past and present conduct) in a particular position could cause to
the Corporation\'s operations and programs:

\(1\) **High Risk** (HR) positions involve duties that are especially
critical to the Corporation or its program mission, with a broad scope
of policy or program authority such as: policy development and
implementation; higher level management assignments; independent
spokesperson; or non-management positions with authority for independent
action.

\(2\) **Moderate Risk** (MR) positions involve duties of considerable
importance to the Corporation or its program mission with significant
program responsibilities and/or delivery of customer services to the
public such as: assistants for policy development and implementation;
mid-level management assignments; non-management positions with
authority for independent or semi-independent action; or positions that
demand public confidence or trust.

\(3\) **Low Risk** (LR) positions involve duties with limited relations
to the Corporation\'s mission and which have little affect on the
efficiency of the Corporation\'s operations or programs.

B. [Computer/Automated Data Processing (ADP) Position Risk
Levels]{.underline}. In accordance with Office of Management and Budget
(OMB) Circular A-130, Security of Federal Automated Information
Resources, the Division of Information Resources Management (DIRM) has
established personnel security policies and procedures to assure an
adequate level of security for the Corporation's automated information
systems. These policies include requirements for screening all
individuals having access to sensitive data. The level of suitability
checks or investigation ranges from a minimal check to a full-field
background investigation, depending upon the sensitivity of the
information to be handled and the risk and magnitude of loss or harm
that could be caused by the individual.

(1) **High Risk** positions include positions in which the incumbent is
    responsible for planning, directing, and implementing a computer
    security program; has a major responsibility for directing,
    planning, and designing a computer system, including the hardware
    and software; or, can access a system with a relatively high risk
    for causing grave damage or realizing a significant personal gain.
    High risk positions may include positions, which involve:

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(a) Responsibility for the development and administration of Corporation
    computer security programs, including direction and control of risk
    analysis and/or threat assessment;

(b) Significant involvement in life-critical or mission-critical
    systems;

\(c\) Responsibility for the preparation or approval of data for input
into a system which does not necessarily involve personal access to the
system, but with relatively high risk for effecting grave damage or
realizing significant personal gain;

\(d\) Relatively high risk assignments associated with or directly
involving the accounting, disbursing, or authorizing for disbursement
from systems of 1) dollar amounts of \$10 million per year or greater;
or 2) lesser amounts if the activities of the individual are not subject
to technical review by higher authority to insure the integrity of the
system;

\(e\) Positions involving major responsibility for directing, planning,
designing, testing, maintaining, operating, monitoring, and/or managing
systems hardware and software; or

\(f\) Other positions as designated by the Corporation that involve
relatively high risk for effecting grave damage or realizing significant
personal gain;

\(2\) **Moderate Risk** positions include positions where the incumbent
is responsible for directing, planning, designing, operating, or
maintaining a computer system, and whose work is technically reviewed by
a higher authority (at the high risk level) to insure the integrity of
the system. Moderate risk positions may involve:

\(a\) Responsibility for systems design, operation, testing,

maintenance, and/or monitoring that is carried out under technical
review of higher authority to ensure the integrity of the system. This
level includes, but is not limited to:

[1]{.underline}. access to and/or processing of proprietary data,
Privacy Act of 1974, and Government-developed privileged information
involving the award of contracts; and

[2]{.underline}. accounting, disbursement, or authorization for
disbursement from systems of dollar amounts less than \$10 million per
year.

\(b\) Other positions, as designated by the Chairman, that involve a
degree of access to a system that creates a significant potential for
damage or personal gain less than that in high risk positions.

\(3\) **Low Risk** positions are all computer/automated data processing
(ADP) positions that do not fall in the categories above.

Table 1, below, U.S. OPM Criteria for Designating Computer/ADP Position
Risk Levels, outlines the criteria developed for use in designating
three risk levels for computer/ADP positions.

The Corporation utilizes these criteria in designating risk levels for
computer/ADP positions.

**[Table 1]{.underline}**

**U.S. OPM CRITERIA FOR DESIGNATING COMPUTER/**

### ADP POSITION RISK LEVELS

+--------------------+-------------------------------------------------+
| **COMPUTER/ADP     | # ADVERSE IMPACT ON COMPUTER/ADP SECURITY       |
| RISK LEVELS**      |                                                 |
+--------------------+-------------------------------------------------+
| HIGH RISK          | Potential for exceptionally serious impact      |
|                    | involving duties especially critical to the     |
| (HR or 6C)         | Corporation's mission, with broad scope and     |
|                    | authority, and with major program               |
|                    | responsibilities which affect a major           |
|                    | computer/ADP system(s).                         |
+--------------------+-------------------------------------------------+
| MODERATE RISK      | Potential for moderate to serious impact        |
|                    | involving duties of considerable importance to  |
| (MR or 5C)         | the Corporation's mission with significant      |
|                    | program responsibilities which affect large     |
|                    | portions of a computer/ADP system(s).           |
+--------------------+-------------------------------------------------+
| LOW RISK           | Potential for impact involving duties of        |
|                    | limited relation to the Corporation's mission   |
| (LR or 1C)         | through the use of computer/ADP system(s).      |
+--------------------+-------------------------------------------------+

### 

### 

### SUBCHAPTER 3. INVESTIGATIVE REQUIREMENTS

**3-1.** **General Policy**

As a condition of employment, each appointment to the Corporation is
subject to an investigation. Different levels of investigations are
conducted to ascertain the fitness of applicants for Public Trust
Positions. For basic suitability determin-ation and low risk positions
the National Agency Check and Inquiries plus Credit is required. For
moderate and high risk positions a more comprehensive background
investigation is required. Refusal to submit to an investigation may
affect placement or retention.

**3-2.** **Position Designation and Corresponding Investigations**

As outlined below, in Table 2, Investigations for Public Trust
Positions, the type of background investigation to be requested depends
on the risk level of the position. This table also shows the
corresponding Standard Forms required by U.S. OPM that the employee,
subject to the background investigation, must complete. Table 3,
Reinvestigation/Update/Upgrade, identifies the Standard Forms required
for a reinvestigation, update, or upgrade investigation.

## 

## 

## Table 2

**INVESTIGATIONS FOR PUBLIC TRUST POSITIONS**

**NEW FEDERAL APPOINTMENT ACTION**

+---------------+-----------------+------------------------------------+
| ### RISK      | **              | **FORM**                           |
|               | INVESTIGATION** |                                    |
| **            |                 |                                    |
| DESIGNATION** |                 |                                    |
+---------------+-----------------+------------------------------------+
| HIGH RISK     | BI              | SF-85P (Original) -- Questionnaire |
|               |                 | for Public Trust Positions         |
|               |                 |                                    |
|               |                 | Resume/Equivalent                  |
|               |                 |                                    |
|               |                 | OF-306 -- Declaration for Federal  |
|               |                 | Employment                         |
|               |                 |                                    |
|               |                 | SF-87 -- Fingerprint Chart         |
|               |                 |                                    |
|               |                 | FDIC 1600/10, Notice and           |
|               |                 | Authorization Pertaining to        |
|               |                 | Consumer Reports                   |
+---------------+-----------------+------------------------------------+
| MODERATE RISK | MBI or LBI      | SF-85P (Original) -- Questionnaire |
|               |                 | for Public Trust Positions         |
|               |                 |                                    |
|               |                 | Resume/Equivalent                  |
|               |                 |                                    |
|               |                 | OF-306 -- Declaration for Federal  |
|               |                 | Employment                         |
|               |                 |                                    |
|               |                 | SF-87 -- Fingerprint Chart         |
|               |                 |                                    |
|               |                 | FDIC 1600/10, Notice and           |
|               |                 | Authorization Pertaining to        |
|               |                 | Consumer Reports                   |
+---------------+-----------------+------------------------------------+
| LOW RISK \*   | NACI            | SF-85 (Original) -- Questionnaire  |
|               |                 | for Non-Sensitive Positions        |
|               |                 |                                    |
|               |                 | Resume/Equivalent                  |
|               |                 |                                    |
|               |                 | OF-306 -- Declaration for Federal  |
|               |                 | Employment                         |
|               |                 |                                    |
|               |                 | SF-87 -- Fingerprint Chart         |
|               |                 |                                    |
|               |                 | FDIC 1600/10, Notice and           |
|               |                 | Authorization Pertaining to        |
|               |                 | Consumer Reports                   |
+---------------+-----------------+------------------------------------+

\*All positions meeting the designation criteria of LOW RISK require the
use of the SF-85,

\*Questionnaire for Non-Sensitive Positions.

## Table 3

**REINVESTIGATION/UPDATE/UPGRADE**

+-----------------------------------------------------------------------+
| SF-85P (Original)                                                     |
+-----------------------------------------------------------------------+
| SF-87                                                                 |
|                                                                       |
| FDIC 1600/10, Notice and Authorization Pertaining to Consumer         |
+-----------------------------------------------------------------------+
| Reports                                                               |
+-----------------------------------------------------------------------+

**3-3.** **Procedures**

The Suitability and Adjudications Group, Employee/Contractor Security
Unit, Security Management Section, administers all employee background
investigations for the Corporation according to the following
procedures:

A. Initiates NACIs and background investigations for all Headquarters
employees. Background Investigations, e.g. BI, LBI, MBI, PRI, etc., for
field employees are also initiated by the Suitability and Adjudications
Group. (**NOTE:** Regional Service Center Personnel Office staff
initiates NACIs for field employees. These investigations are scheduled
by submitting a request to U.S. OPM.)

B. A background investigation, of an employee, is initiated by the
requesting official upon receipt of a completed investigation
questionnaire either Standard Form (SF) 85, Questionnaire for
Non-Sensitive Positions, or SF 85P, Questionnaire for Public Trust
Positions, and a copy of each of the following: Resume or equivalent;
Optional Form (OF) 306, Declaration for Federal Employment; SF 87,
Fingerprint Chart; and a Notice and Authorization Pertaining to Consumer
Reports. Employees must complete the proper investigative questionnaire
upon appointment to the Corporation or promptly after being placed into
a high risk position. (See Table 2 and Table 3 for forms required to
request an investigation.)

**3-4.** **Investigation of Incumbents and Other Corporation Employees**

**Experiencing a Change in Position Risk Level**

A. All employees from another agency selected for a position at the
Corporation, at a higher risk level than previously occupied, must meet
the investigative requirements of the new risk level. Current
Corporation employees moving to a "high risk" position also must meet
the investigative requirements of the new risk level.

B. If the risk level of a position is changed, an incumbent may remain
in the position, but the required investigation must be initiated
promptly after

redesignation is final for any high risk position. Reinvestigation will
not be required for moderate risk positions.

C. If an employee outlined in Subparagraph 3-4. A. or B., above, has
received the required investigation for placement in the new risk level,
no reinvestigation is required unless updating is considered necessary
because of time elapsed since the previous investigation, or because of
other special circumstances which justify additional investigation.

**3-5.** **Reinstatements**

Reinstatements are subject to investigation unless a break-in-service is
12 months or less and the investigation required was conducted no more
than 36 months before the date of the new appointment.

**3-6.** **Periodic Reinvestigation of Incumbents**

The incumbents of Public Trust Positions designated **High Risk** are
subject to periodic reinvestigation at least once every 5 years after
placement.

**3-7.** **Exceptions to Investigative Requirements**

The Code of Federal Regulations permits exceptions to certain low risk
positions. The Corporation will conduct investigations it deems
appropriate to ensure that the employment or retention of such a person
is clearly consistent with the efficiency of the service. These
positions are intermittent, seasonal, per-diem, or temporary,
not-to-exceed an aggregate of 180 days either in a single continuous
appointment or a series of appointments.

All employees, regardless of the requirement for investigations, are
subject to all applicable laws and regulations governing their
suitability and fitness for employment, including the standards
promulgated in 12 CFR 336. Further, employees converted with or without
a break in service to a position not exempted under this subchapter will
be subject to the appropriate investigation as though they had just
entered on duty. Administrative Officers are requested to promptly
advise the Personnel Security Officer of such conversions.

**3-8.** **Initiating an Investigation**

Tables 2 and 3 outlined above identify the forms required to initiate a
background investigation.

A. The Corporation must initiate postplacement investigations promptly
after the date of placement. Periodic reinvestigations are initiated as
they occur.

B. When requesting a background investigation, a fingerprint chart must
be submitted. Fingerprints characterized as unclassifiable by the
Federal Bureau of Investigation (FBI) are returned for retake and
resubmission.

C. Any pertinent information concerning the person to be investigated
that is developed by the Corporation through written inquiries or other
means must be forwarded with the request for investigation to U.S. OPM.

D. If there is verifiable evidence of a prior investigation, it may not
be necessary to initiate a duplicate investigation. However, the
investigation required by the sensitivity level of the position applied
for or appointed to must be conducted, unless a break-in-service is 12
months or less and the required investigation was conducted no more than
36 months before the date of the appointment.

If a search of the U.S. OPM\'s Security Investigations Index indicates
that an investigation of the subject was conducted previously, U.S. OPM
obtains a copy of the previous investigation, and:

> \(1\) If the previous investigation meets the scope and coverage

of this directive, and is compatible with the current request (i.e.,
similar level of investigation), and was completed within the past 12
months, U.S. OPM will return the request to the Corporation with a copy
of the previous investigation.

\(2\) If the previous investigation does not meet the scope and coverage
standards of this directive or is not compatible with the current
request, or was conducted more than 12 months ago, U.S. OPM may be
requested by the Corporation to update or upgrade the investigation
based on the age, scope, and extent of the previous investigation, to
bring the total combined investigative efforts up to standards.

**SUBCHAPTER 4. SUITABILITY ADJUDICATION**

**4-1.** **General Policy**

Prior to appointment or conversion to a new appointment in the
competitive or excepted service or Executive Level, the Suitability and
Adjudications Group, Security Management Section will review, for basic
employment suitability determination, the
applicant/appointee/employee\'s application; OF-306, Declaration for
Federal Employment; form FDIC 2120/16, Applicant Certification
Statement; and any additional application related information filed
directly with the Corporation. The determination will involve an
assessment of past and present conduct and whether the conduct of the
person indicates a potential for behavior which would interfere with or
adversely impact on the person\'s performance or the ability of the
Corporation to perform its mission. The Personnel Security Officer will
also evaluate reports of investigation and other information to
determine if the employee\'s background investigation discloses any
potential questions concerning the employment of the individual being
inconsistent with the efficiency of the Corporation\'s operations.

**4-2.** **Initial Review**

Reports of investigation are reviewed by the Personnel Security Officer
for potentially significant disqualifying issues that could affect an
employee\'s suitability for employment. If no questions concerning the
employee\'s suitability are identified, the background investigation is
closed.

**4-3.** **Preliminary Determinations**

In cases where an investigation discloses questionable background
information, the Personnel Security Officer may attempt to resolve the
issues at a preliminary stage by conducting or requesting additional
investigations, or by requesting clarification of information from the
employee.

A. At the discretion of the Personnel Security Officer, a letter may be
sent to the employee outlining the information disclosed during the
background investigation. The employee will be provided with the
opportunity to explain, comment on, or refute the information within 14
days from the date of the letter. Additional time will be provided to
the employee if such time is needed to obtain documentation in support
of the employee's position. (See Appendix E, Sample Letter Requesting
Information.)

B. If the issues are favorably resolved, the case shall be closed and a
letter informing the employee of the favorable resolution will be
provided to the employee.

**4-4.** **Referrals to the Labor and Employee Relations Section**

Generally, cases with issues that are not resolved by a preliminary
determination will be referred to the Labor and Employee Relations
Section (LERS), Personnel Services Branch for further action.

LERS will assist division/office officials in the resolution of issues
so that final action is conducted in accordance with the procedures
established by U.S. OPM.

**4-5.** **Special Cases**

A. Cases involving:

> \(1\) Possible material falsification of the SF 171 or OF-612;
>
> \(2\) Material intentional false statement or deception;
>
> \(3\) Fraud in examination or appointment;
>
> \(4\) Refusal to furnish testimony as required by 5 C.F.R. 5.4; or

\(5\) Indications that an employee (or prospective employee) is engaging
in ongoing criminal activity shall be referred to the Office of
Inspector General for possible further investigation (see FDIC Circular
1150.1, Coordination with Office of Inspector General Activities) or for
referral to the Department of Justice. In order to facilitate timely
adjudications, the Personnel Security Officer will coordinate with the
Office of Inspector General and the Labor and Employee Relations
Section, so that matters may be referred for adjudication at the
earliest possible date.

B. Cases involving issues of financial responsibility shall be referred
to the Ethics Office, whenever substantive questions arise regarding:

\(1\) A pattern or practice of defalcation regarding obligations to
insured depository institutions;

\(2\) A substantial loss to the Federal Deposit Insurance Fund; or

\(3\) An employee adequately remedying past or present financial
problems.

In accordance with the recommendations of the Ethics Office, these cases
will be either monitored, closed, or referred to the Labor and Employee
Relations Section for further action. See FDIC Circular 2120.5. The
Labor and Employee Relations Section will coordinate with the
appropriate division/office official when an action is considered.

**4-6.** **Adjudication**

A. Cases involving applicants for, or appointees in, competitive service
where the issues as outlined in Subparagraph 4-5.A, above, remain after
referral to the Office of Inspector General, must be referred to U.S.
OPM for final adjudication.

B. As an alternative to adjudication by U.S. OPM, the Corporation may
request authority from U.S. OPM to take action under the Corporation\'s
authority and conduct such adjudications in accordance with instructions
from U.S. OPM.

C. All cases involving excepted service employees and cases not
involving material falsification of the SF 171 or equivalent, material
false statement or deception, fraud in examination or appointment, or a
refusal to furnish testimony as required by 5 C.F.R. 5.4 by an employee
in the competitive service will be adjudicated by the Corporation, in
accordance with the adjudication procedures established by U.S. OPM.

D. When adjudicating suitability, the Corporation may take several
circumstances into consideration. These circumstances include: the kind
of position applied for or employed in; the degree of public trust or
risk in the position; the nature and seriousness of the conduct;
circumstances surrounding the conduct; recency of the misconduct; age of
the person at the time of the conduct; contributing societal factors;
and absence or presence of efforts toward rehabilitation. Other
mitigating facts and circumstances may also be taken into consideration.
The Corporation will utilize U.S. OPM adjudication factors, outlined in
Appendix C, U.S. OPM Adjudication Factors, as **guidelines.**

E.  In compliance with amendments to the Fair Credit Reporting Act,

before taking action adverse to an applicant or employee based in whole
or in part on a consumer report the Corporation must take the following
action:

\(1\) Before the adverse action to the employee or applicant is taken,
the Corporation must notify the individual of the proposed action and
give the individual a pre-adverse action disclosure that includes a copy
of the individual's

consumer report and a copy of "A Summary of Your Rights Under the Fair
Credit Reporting Act" (Appendix B).

\(2\) After the adverse action is taken, the Corporation must give the
individual notice -- orally, in writing, or electronically -- that the
action has been taken, in an adverse action notice. It must include:

(a) The name, address, and phone number of the Consumer

> Reporting Agency (CRA) that supplied the report;

(b) A statement that the CRA that supplied the report did not

> make the decision to take the adverse action and cannot
>
> give specific reasons for it; and

(c) A notice of the individual's right to dispute the accuracy or
    completeness of any information the agency furnished, and his or her
    right to an additional free consumer report from the agency upon
    request within 60 days.

F. The Labor and Employee Relations Section will notify the Personnel
Security Officer and the appropriate management official(s) on the final
resolution of any case.

**SUBCHAPTER 5.** **RECORD ON SENSITIVITY DESIGNATION, ACCESS**

**LEVEL, AND INVESTIGATIVE REQUIREMENT**

**5-1. Maintenance of Record**

The Suitability and Adjudications Group staff will maintain a record on
the following for each position in the Corporation:

A.  Sensitivity level of the position and coding for personnel
    documents:

**Level Code\***

6 High Risk (HR) 6

5 Moderate Risk (MR) 5

1 Low Risk (LR) 1

\* Identify ADP-computer positions with a \"C\" after the code.

B.  Personnel background investigation requirements:

Background Investigation (BI)

Limited Background Investigation (LBI)

Minimum Background Investigation (MBI)

National Agency Check & Inquiries with Credit (NACIC)

**SUBCHAPTER 6. PROGRAM REQUIREMENTS AND ADMINISTRATION**

1.  **Responsibility**

In accordance with Federal law, the Chairman of the Corporation is
responsible for insuring compliance with the requirements of the
Personnel Suitability Program as outlined in this directive. The Chief,
Employee/Contractor Security Unit is the designated Personnel Security
Officer. The Suitability and Adjudications Group in the Division of
Administration handles the day-to-day operation of the Personnel
Suitability Program. The Suitability and Adjudications Group will
maintain all records showing position designation levels.

**6-2.** **Safeguarding the Rights of Individuals**

A. [General Requirements]{.underline}. All persons being considered for
public trust positions under suitability requirements will have an
opportunity to explain, refute, or mitigate actionable suitability
information developed in an investigation before being rejected or
nonselected on suitability grounds because of mistaken identity,
unfounded allegation, or because of certain mitigating circumstances not
known to the Corporation.

B. [Evaluation based on U.S. OPM Investigation]{.underline}. The
Personnel Security Officer will coordinate all suitability
determinations. When the Corporation, as a result of information in an
OPM investigation, makes an unfavorable decision, changes a tentative
favorable placement or clearance decision to an unfavorable decision, or
is considering more than one candidate competitively or
non-competitively, and as a result of information in an OPM
investigation pertaining to conduct not directly related to job
performance, makes an unfavorable decision, it must provide certain
rights to the person. Such due process requirements generally include,
at a minimum:

\(1\) Notice of specific reason(s) for the decision;

\(2\) An opportunity to respond; and

\(3\) Notice of appeal rights, if any.

**6-3.** **Records Maintenance**

The Corporation must keep a record of the results of all adjudications
based on OPM cases, and all adjudications under authority 5 CFR 731,
regardless of whether the determination was favorable or unfavorable. At
a minimum, this record will include a copy of the form indicating the
adjudicative action for each OPM conducted investigation and a copy of
each form indicating adjudicative action based on a file obtained from
OPM by check of the Security Investigations

Index. In each case where the Corporation proposes an adverse action,
this record will be included in an Administrative Due Process File,
which in addition, will consist of a copy of all written challenges,
replies, or documentation supplied by the subject, a written summary of
any oral response, a copy of any U.S. OPM report, and any other
documents directly related to the issue. This file is considered to be a
part of an U.S. OPM government-wide Privacy Act system of records. The
Corporation will maintain the above record of adjudications for at least
2 years from the date of the final decision in the case.

**6-4.** **Reports to U.S. Office of Personnel Management**

A. [Files furnished as a result of Security Investigations Index Check
by the Corporation]{.underline}. Within 90 days of receipt of a file
from U.S. OPM, the Corporation is required to report any final
adjudicative action taken on the subject.

B. [Office of Personnel Management Conducted Investigation]{.underline}.
Within 90 days from the date of receipt of an investigation from U.S.
OPM, the Corporation must report to U.S. OPM the final adjudicative
action taken.

C. [Reports on Adjudicative Actions in Cases Not Covered
Above]{.underline}. The Corporation is required to report to U.S. OPM
the final adjudicative action taken under 5 CFR 731 on individuals in
any case not covered above.

#### Appendix A

### FEDERAL DEPOSIT INSURANCE CORPORATION

### Notice and Authorization Pertaining to Consumer Reports

**Pursuant to the Fair Credit Reporting Act of 1970, 15 U.S.C. § 1681,
et seq.**

Please take notice that one or more consumer reports may be obtained for
employment purposes. Because a background investigation will be
conducted as part of a determination of your fitness for employment, or
for performance under a contract, you are also entitled to request
additional disclosures concerning the nature and scope of the
investigation.

By signing this form, you are giving consent to have your consumer
reports furnished by consumer reporting agencies as part of an
investigation to determine your (1) fitness for Federal employment, (2)
clearance to perform contractual service, and/or (3) security clearance
or access. The information obtained may be redisclosed to other Federal
agencies for the above purposes and in fulfillment of official
responsibilities to the extent that such disclosure is permitted by law.

I, [,]{.underline} hereby

(Name of Employee/Applicant)

authorize the Federal Deposit Insurance Corporation to obtain such
report(s)

from any consumer reporting agency for employment purposes.

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Signature

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Date

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Social Security Number

Executive Order 9397 (Nov. 22, 1943) asks Federal agencies to use Social
Security Numbers (SSN) to help identify

individuals in agency records. Your SSN is therefore needed to keep
records accurate, because other people may

have the same name. Providing your SSN is voluntary. However, failure to
provide the requested information

could result in the FDIC receiving an erroneous credit report.

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

FDIC 1600/10 (8-98)

Appendix B

#### A SUMMARY OF YOUR RIGHTS UNDER THE FAIR CREDIT

### REPORTING ACT

The Federal Fair Credit Reporting Act (FCRA) is designed to promote
accuracy, fairness, and privacy of information in the files of every
"Consumer Reporting Agency" (CRA). Most CRAs are credit bureaus that
gather and sell information about you -- such as if you pay your bills
on time or have filed bankruptcy -- to creditors, employers, landlords,
and other businesses. You can find the complete text of the FCRA, 15
U.S.C. 1681-1681u, at the Federal Trade Commission's web site
([http://www.ftc.gov](http://www.ftc.gov/)). The FCRA gives you specific
rights, as outlined below. You may have additional rights under state
law. You may contact a state or local consumer protection agency or a
state attorney general to learn those rights.

-   **You must be told if information in your file has been used against
    you.** Anyone who uses information from a CRA to take action against
    you -- such as denying an application for credit, insurance, or
    employment -- must tell you, and give you the name, address, and
    phone number of the CRA that provided the consumer report.

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-   **You can find out what is in your file.** At your request, a CRA
    must give you the information in your file, and a list of everyone
    who has requested it recently. There is no charge for the report if
    a person has taken action against you because of information
    supplied by the CRA, if you request the report within 60 days of
    receiving notice of the action. You also are entitled to one free
    report every twelve months upon request if you certify that (1) you
    are unemployed and plan to seek employment within 60 days, (2) you
    are on welfare, or (3) your report is inaccurate due to fraud.
    Otherwise, a CRA may charge you up to eight dollars.

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-   **You can dispute inaccurate information with the CRA.** If you tell
    a CRA that your file contains inaccurate information, the CRA must
    investigate the items (usually within 30 days) by presenting to its
    information source all relevant evidence you submit, unless your
    dispute is frivolous. The source must review your evidence and
    report its findings to the CRA. (The source also must advise
    national CRAs -- to which it has provided the data -- of any error.)
    The CRA must give you a written report of the investigation, and a
    copy of your report if the investigation results in any change. If
    the CRA's investigation does not resolve the dispute, you may add a
    brief statement to your file. The CRA must normally include a
    summary of your statement in future reports. If an item is deleted
    or a dispute statement is filed, you may ask that anyone who has
    recently received your report be notified of the change.

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-   **Inaccurate information must be corrected or deleted.** A CRA must
    remove or correct inaccurate or unverified information from its
    files, usually within 30 days after you dispute it. However, the CRA
    is not required to remove

> accurate data from your file unless it is outdated (as described
> below) or cannot be verified. If your dispute results in any change to
> your report, the CRA cannot reinsert into your file a disputed item
> unless the information source verifies its accuracy and completeness.
> In addition, the CRA must give you a written notice telling you it has
> reinserted the item. The notice must include the name, address and
> phone number of the information source.

-   **You can dispute inaccurate items with the source of the
    information.** If you tell anyone -- such as a creditor who reports
    to a CRA -- that you dispute an item, they may not then report the
    information to a CRA without including a notice of your dispute. In
    addition, once you've notified the source of the error in writing,
    it may not continue to report the information if it is, in fact, an
    error.

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-   **Outdated information may not be reported.** In most cases, a CRA
    may not report negative information that is more than seven years
    old; ten years for bankruptcies.

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-   **Access to your file is limited.** A CRA may provide information
    about you only to people with a need recognized by the FCRA --
    usually to consider an application with a creditor, insurer,
    employer, landlord, or other business.

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```
-   **Your consent is required for reports that are provided to
    employers, or reports that contain medical information.** A CRA may
    not give out information about you to your employer, or prospective
    employer, without your written consent. A CRA may not report medical
    information about you to creditors, insurers, or employers without
    your permission.

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```
-   **You may choose to exclude your name from CRA lists for unsolicited
    credit and insurance offers.** Creditors and insurers may use file
    information as the basis for sending you unsolicited offers of
    credit or insurance. Such offers must include a toll-free phone
    number for you to call if you want your name and address removed
    from future lists. If you call, you must be kept off the lists for
    two years. If you request, complete, and return the CRA form
    provided for this purpose, you must be taken off the lists
    indefinitely.

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-   **You may seek damages from violators.** If a CRA, a user or (in
    some cases) a provider of CRA data, violates the FCRA, you may sue
    them in state or federal court.

The CFRA gives several different Federal agencies authority to enforce
the FCRA:

+-----------------------------------+-----------------------------------+
| **FOR QUESTIONS OR CONCERNS       | PLEASE CONTACT:                   |
| REGARDING:**                      |                                   |
+-----------------------------------+-----------------------------------+
| CRA/s creditors and others not    | Federal Trade Commission          |
| listed below                      |                                   |
|                                   | Consumer Response Center -- FCRA  |
|                                   |                                   |
|                                   | Washington, DC 20580              |
|                                   |                                   |
|                                   | \(202\) 326-3761                  |
+-----------------------------------+-----------------------------------+
| National banks, federal           | Office of the Comptroller of the  |
| branches/agencies of              | Currency                          |
|                                   |                                   |
| Foreign banks (word "National" or | Compliance Management, Mail Stop  |
| initials "N.A." appear in or      | 6-6                               |
| after bank's name)                |                                   |
|                                   | Washington, DC 20219              |
|                                   |                                   |
|                                   | \(800\) 613-6743                  |
+-----------------------------------+-----------------------------------+
| Federal Reserve System member     | Federal Reserve Board             |
| banks (except national banks, and |                                   |
| federal branches/agencies of      | Division of Consumer & Community  |
| foreign banks)                    | Affairs                           |
|                                   |                                   |
|                                   | Washington, DC 20551              |
|                                   |                                   |
|                                   | \(202\) 452-3693                  |
+-----------------------------------+-----------------------------------+
| Savings associations and          | Office of Thrift Supervision      |
| federally chartered               |                                   |
|                                   | Consumer Programs                 |
| Savings banks (word "Federal" or  |                                   |
| initials "F.S.B." appear in       | Washington, DC 20552              |
| federal institution's name)       |                                   |
|                                   | \(800\) 842-6929                  |
+-----------------------------------+-----------------------------------+
| Federal credit unions (words      | National Credit Union             |
| "Federal Credit Union" appear in  | Administration                    |
| institution's name                |                                   |
|                                   | 1775 Duke Street                  |
|                                   |                                   |
|                                   | Alexandria, VA 22314              |
+-----------------------------------+-----------------------------------+
| State-chartered banks that are    | Federal Deposit Insurance         |
| not members                       | Corporation                       |
|                                   |                                   |
| Of the Federal Reserve System     | Division of Compliance & Consumer |
|                                   | Affairs                           |
|                                   |                                   |
|                                   | Washington, DC 20429              |
|                                   |                                   |
|                                   | \(800\) 934-FDIC                  |
+-----------------------------------+-----------------------------------+
| Air, surface, or rail common      | Department of Transportation      |
| carriers regulated by former      |                                   |
| Civil Aeronautics Board or        | Office of Financial Management    |
| Interstate Commerce Commission    |                                   |
|                                   | Washington, DC 20590              |
|                                   |                                   |
|                                   | \(202\) 366-1306                  |
+-----------------------------------+-----------------------------------+
| Activities subject to the Packers | Department of Agriculture         |
| and Stockyards Act, 1921          |                                   |
|                                   | Office of Deputy Administrator -- |
|                                   | GIPSA                             |
|                                   |                                   |
|                                   | Washington, DC 20250              |
|                                   |                                   |
|                                   | \(202\) 720-7051                  |
+-----------------------------------+-----------------------------------+

Appendix C

#### U.S. OPM ADJUDICATION FACTORS

+-------------------------+--------------------------------------------+
| **DISQUALIFICATION      | ##### GENERAL APPLICATION IN ADJUDICATION  |
| FACTORS**               |                                            |
+-------------------------+--------------------------------------------+
| Misconduct or           | May or may not have resulted in dismissal  |
| negligence in prior     | from employment. If dismissal resulted,    |
| employment which would  | primary emphasis should be placed on the   |
| have a bearing on       | act or conduct, which prompted the         |
| efficient service in    | dismissal, rather than on the mere fact of |
| the position in         | dismissal.                                 |
| question, or would      |                                            |
| interfere with or       |                                            |
| prevent effective       |                                            |
| performance by the      |                                            |
| employing agency of its |                                            |
| duties and              |                                            |
| responsibilities.       |                                            |
+-------------------------+--------------------------------------------+
| Any statutory bar which | A statutory or regulatory bar prevents the |
| prevents the lawful     | lawful employment of the person involved   |
| employment of the       | in the position in question. See the       |
| person involving the    | Federal Personnel Manual (FPM) chapter 735 |
| position in question.   | for legal restrictions on Federal          |
|                         | employment of persons convicted of certain |
|                         | offenses.                                  |
+-------------------------+--------------------------------------------+
| Criminal or dishonest   | Criminal -- Primary concern should be with |
| conduct related to the  | the nature of the criminal conduct,        |
| duties to be assigned   | evidence of rehabilitation, and the effect |
| to the applicant or     | such conduct may have on the efficiency of |
| appointee, or to that   | the service. The facts and circumstances   |
| person\'s performance   | of the behavior should be considered in    |
| or the performance of   | all decisions (even where the record has   |
| others.                 | been expunged or a pardon granted --       |
|                         | Exception: Presidential or gubernatorial   |
|                         | pardon granted on the basis of the         |
|                         | person\'s innocence). Persons under        |
|                         | indictment or formal criminal charges may  |
|                         | not be considered for employment until a   |
|                         | disposition is made of the pending         |
|                         | charges, if the pending charges require    |
|                         | referral).                                 |
|                         |                                            |
|                         | Dishonest -- Includes an act indicating    |
|                         | deliberate disregard for the rights of     |
|                         | others (generally through lies, fraud, or  |
|                         | deceit) for the benefit of the applicant   |
|                         | or employee or other persons (e.g., offer  |
|                         | or acceptance of a bribe; falsification of |
|                         | records; willful disregard for the truth;  |
|                         | theft; issues relating to non-material     |
|                         | falsification; etc.).                      |
+-------------------------+--------------------------------------------+
| Intentional false       | Examples: Impersonation in examination;    |
| statement or deception, | collusion in examination; assuming         |
| or fraud in examination | identity of a person who has eligibility;  |
| or appointment.         | altering the grad score on an OPM Notice   |
|                         | of Rating; altering the condition of       |
|                         | discharge on military discharge documents; |
|                         | altering college transcripts to qualify    |
|                         | for a position in which specific           |
|                         | educational attainment is a requirement;   |
|                         | falsifying an application or appointment   |
|                         | document.                                  |
+-------------------------+--------------------------------------------+
| Refusal to furnish      | See Civil Service Rule 5.4. Authority to   |
| testimony required by   | invoke this rule is reserved to USOPM,     |
| civil service rules.    | Merit System Protection Board (MSPB), or   |
|                         | the Office of Special Counsel. Failure to  |
|                         | comply with an OPM requirement may be      |
|                         | disqualifying provided the person          |
|                         | concerned was aware of the requirement in  |
|                         | Civil Service Rule 5.4.                    |
+-------------------------+--------------------------------------------+
| Alcohol abuse of a      | Current, continuing abuse would ordinarily |
| nature and duration     | be disqualifying. Abuse may manifest       |
| which suggests that the | itself in poor employment records, debts,  |
| applicant or appointee  | domestic difficulties, or convictions. A   |
| would be prevented from | clear, lengthy break in a pattern of abuse |
| performing the duties   | and strong evidence that abuse will not    |
| of the position in      | occur again is required before the conduct |
| question, or would      | can be considered non-disqualifying.       |
| constitute a direct     |                                            |
| threat to the property  |                                            |
| or safety of others.    |                                            |
+-------------------------+--------------------------------------------+
| Illegal use or          | Current or recent use or possession would  |
| possession of           | ordinarily be disqualifying. Any pattern   |
| narcotics, drugs, or    | is also disqualifying unless there is a    |
| other controlled        | clear, lengthy break since the last        |
| substances, without     | occurrence.                                |
| evidence of substantial |                                            |
| rehabilitation.         |                                            |
+-------------------------+--------------------------------------------+
| Knowing and willful     | Traitorous acts are disqualifying. Knowing |
| engagement in acts or   | membership in, with specific intent to     |
| activities designed to  | further the aims of an organization which  |
| overthrow the U.S.      | unlawfully practices acts of force or      |
| Government by force.    | violence to prevent others from exercising |
|                         | their rights under the Constitution or     |
|                         | law, or which seeks to overthrow U.S.      |
|                         | Government by unlawful or unconstitutional |
|                         | means is disqualifying. Peaceful protest   |
|                         | in and of itself is not disqualifying.     |
|                         | NOTE: In some situations conduct that is   |
|                         | disqualifying will also involve a          |
|                         | statutory bar to employment.               |
+-------------------------+--------------------------------------------+

### Appendix D

####### POSITION DESIGNATION RECORD

AGENCY: PROGRAM: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

###### POSITION TITLE: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

POSITION DESCRIPTION #:
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

######## 

######## RISK DESIGNATION SYSTEM

I.  [PROGRAM PLACEMENT]{.underline}:

> Impact on Efficiency of Service:

Scope of Operations for Efficiency of Services:

Placement (Major, Substantial, Moderate, Limited):

II\. [POSITION PLACEMENT:]{.underline}

[Risk Factors]{.underline} [Risk Points]{.underline}

a.  Degree of Public Trust (7-1):

b.  Fiduciary Responsibilities (7-1):

c.  Importance to Program (7-1):

d.  Program Authority Level (7-1):

e.  Supervision Received (7-1):

TOTAL POINTS:

III. [POSITION PLACEMENT (HR; MR; LR)]{.underline}:

> Adjustments (include Computer-ADP Position Risk Criteria): Comments:
>
> [FINAL PLACEMENT (Risk level/Sensitivity level/Access
> level)]{.underline}:
>
> Signature of Agency Designator
>
> Date

[\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_]{.underline}

FDIC 1600/11 (8-99)

Appendix E

######### SAMPLE LETTER REQUESTING INFORMATION

### 

Date:

Dear

The Federal Deposit Insurance Corporation (FDIC) has requested the
United States Office of Personnel Management (USOPM) to initiate a
routine background investigation to determine your suitability for FDIC
employment.  A National Agency Check and Inquiries and Credit Check
(NACIC) completed by USOPM disclosed information that you may want to
clarify, explain, or correct. The following information was disclosed by
the NACIC:

Accordingly, you have an opportunity to comment, explain or refute the
information outlined above. If you wish to respond, please address your
comments to:

> Federal Deposit Insurance Corporation
>
> 550 17th Street NW -- PA 1700-2040
>
> Attn: Personnel Security Officer
>
> Washington, D.C. 20429

Mark the envelope with the following statement:

**CONFIDENTIAL** **TO BE OPENED BY ADDRESSEE ONLY**

Please attach copies of any documents that you believe will support your
comments or explanation. Your response should be submitted and received
by the Personnel Security Officer within 14 days from the date of this
letter. Your response to this request for further information is
entirely voluntary. If you choose to provide additional information, it
will be considered along with the NACIC information during our
background review.

Addressee -2- Date

After the FDIC completes its review of the information, our files will
be closed unless we identify any significant disqualifying factors. In
the event significant disqualifying factors are identified, your case
will be referred to the appropriate FDIC official for possible
adjudication of your suitability for FDIC employment. If this occurs,
you will be notified.

Please be assured that the information you provide will be treated as
confidential personal information, and will be used or disseminated only
in accordance with the Privacy Act. Accordingly, the information will be
maintained along with other background material in the USOPM record
system OPM/Central-9 and is subject to the routine uses listed in the
Federal Register for that record system.

The Privacy Act requires us to inform you of our authority which can be
found at 5 U.S.C. §§ 2302, 3301, and 3302; Executive Order 10577, as
amended by Executive Order 12107; 5 C.F.R. §§ 6.3, 731, 731.103, and
2635; 12 U.S.C. §§ 1819 and 1822, as amended by Public Law 103-204  §
19, 12 C.F.R. § 336 and FDIC Circular 2120.1, Personnel
Security/Suitability Program.

If you have any questions or concerns, feel free to contact me at (202)
942-3xxx. Thank you in advance for your cooperation.

Sincerely,

Personnel Security Officer