Source: https://www.federalregister.gov/documents/2005/08/05/05-15468/one-year-post-employment-restrictions-for-senior-examiners
Timestamp: 2019-08-17 17:39:43
Document Index: 144774247

Matched Legal Cases: ['arts 4', '§\u20094', 'art 263', 'art 264', 'art 336', '§\u2009507', 'art 509', '§\u2009509']

A Proposed Rule by the Comptroller of the Currency, the Federal Reserve System, the Federal Deposit Insurance Corporation, and the Thrift Supervision Office on 08/05/2005
Comments must be received on or before October 4, 2005.
70 FR 45323
45323-45334 (12 pages)
Docket No. 05-12
No. 2005-27
05-15468
A. Definition of “Senior Examiner''
https://www.federalregister.gov/d/05-15468 https://www.federalregister.gov/d/05-15468
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 Start Printed Page 45324seek 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.
OTS: You may submit comments, identified by No. 2005-27, by any of the following methods:
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. Start Printed Page 45325
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 post-employment restrictions apply to relationships with the depository institution holding company and any depository institution subsidiary of the holding company.[3] The post-employment 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 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 post-employment 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.
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 post-employment restrictions were “intended to apply only to senior examiners who have a meaningful relationship with a financial institution, such as an 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:
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 Start Printed Page 45326relationship 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 post-employment 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 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).
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 Mid-Size 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 mid-size 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.
As the FDIC's supervisory program is currently structured, most examiners-in-charge (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 Start Printed Page 45327meaningful 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:
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 institution could create a perceived conflict of interest.
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.
As OTS's supervisory program is currently structured, the post-employment restrictions in section 10(k) would primarily cover OTS examiners-in-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.
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 Start Printed Page 45328depository 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 one-year 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]
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 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 post-employment 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 post-employment restrictions in section 10(k), and the associated penalties, would not apply to the senior examiner.
A civil monetary penalty of not more than $250,000.[13]
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 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 post-employment 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 Start Printed Page 45329respective 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.
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.
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 Start Printed Page 45330governments, 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.
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.
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:
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'
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, Start Printed Page 45331officer, director or consultant from the national bank, or any company (including a bank holding company) that controls the national bank.
(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.
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:
b. Remove the word “and” at the end of the paragraph (f); 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:
(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 Start Printed Page 45332
1. Subpart C is added to Part 336 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.
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:
An individual is a senior examiner for a particular savings association or savings and loan holding company if:
(a) Prohibition. (1) Senior examiner of savings association. An individual who serves as a senior examiner of a savings association for two or more of the last 12 months of his or her employment with OTS may not, within one year after the termination date of his or her employment with OTS, knowingly accept compensation as an employee, officer, director, or consultant from:
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.
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:
(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.
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).
4. See 12 U.S.C. 1820(k)(1)(B).
5. 150 Cong. Rec. S10356 (daily ed. Oct. 4, 2004) (statement of Sen. Levin).
7. 150 Cong. Rec. S10356 (daily ed. Oct. 4, 2004) (statement of Sen. Levin).
8. See 150 Cong. Rec. s10356 (daily ed. Oct. 4, 2004) (statement of Sen. Levin).
9. The Agencies note, however, that a former senior examiner may not evade the post-employment 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).
11. Of course, a former senior examiner who is self-employed 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).
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).
17. See 12 U.S.C. 1820(k)(6)(A).
[FR Doc. 05-15468 Filed 8-4-05; 8:45 am]