[Congressional Record Volume 143, Number 158 (Monday, November 10, 1997)]
[Extensions of Remarks]
[Page E2312]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




           THE BANK EXAMINATION REPORT PROTECTION ACT OF 1997

                                 ______
                                 

                           HON. BILL McCOLLUM

                               of florida

                    in the house of representatives

                        Sunday, November 9, 1997

  Mr. McCOLLUM. Mr. Speaker, I rise today in support of legislation I 
am introducing, the Bank Examination Report Protection Act [BERPA] of 
1997. This bill would establish that all confidential supervisory 
information shall be the property of the Federal banking agency that 
created or requested the information and shall be privileged from 
disclosure to any other person. The Federal banking agency may waive 
this privilege at its discretion. There are other appropriate 
exceptions in the bill, such as for the Comptroller General of the 
United States and for law enforcement.
  Essentially, the issue of privilege is one that must be addressed. 
The fact that financial institutions may lose their privilege on 
information turned over to a regulator has made them more hesitant to 
share all relevant information with their regulators. This, in turn, 
makes it more difficult for the regulators to do a thorough job in 
their examinations of the institutions.
  In fact, this legislation is strongly supported by all the affected 
Federal banking regulators. I would like to introduce into the record 
the letter that they have forwarded to me supporting this legislation. 
It is signed by: Alan Greenspan, Chairman of Board of Governors of the 
Federal Reserve System, Eugene A. Ludwig, Comptroller of the Currency, 
Norman E. D'Amours, Chairman of the National Credit Union 
Administration, Nicolas P. Retsinas, Director of the Office of Thrift 
Supervision, and Andrew C. Hove, Chairman of the Federal Deposit 
Insurance Corporation.
  I would like to make sure my colleagues are aware that this 
legislation would maintain existing privileges and protect any 
materials created by the regulators. This would not prevent litigants 
from discovering the underlying facts of any action. All nonprivileged 
sources would still be available in discovery. This would simply ensure 
that examination materials--the critically important function of which 
is facilitate free-flowing communication between the examiner and the 
institution to maximize the effectiveness of the supervisory process--
are not turned into a weapon against the regulated financial 
institution.
  BERPA would ensure that the safety and soundness of our institutions 
is maintained through a vigorous and thorough supervisory process. This 
process is not complete when institutions are not forthcoming with 
information for fear of having information that was at one time 
privileged suddenly become subject to subpoena. Therefore, not only 
does this help the supervisory process, but also the consumers and 
taxpayers that insure these institutions. I urge my colleagues to 
support this legislation.

         Board of Governors of the Federal Reserve System, Federal 
           Deposit Insurance Corporation, National Credit Union 
           Administration, Office of the Comptroller of the 
           Currency, Office of Thrift Supervision,
                                               September 17, 1997.
     Hon. Bill McCollum,
     U.S. House of Representatives, Washington, DC.
       Dear Congressman McCollum: Thank you for requesting our 
     comments on the draft Bank Examination Report Protection Act 
     of 1997. The Office of the Comptroller of the Currency, the 
     Board of Governors of the Federal Reserve System, the Federal 
     Reserve System, the Federal Deposit Insurance Corporation, 
     the Office of Thrift Supervision, and the National Credit 
     Union Administration (Agencies) support the proposed 
     legislation because it will help protect the integrity of the 
     examination process.
       First, the legislation will help preserve the cooperative, 
     non-adversarial exchange of information by supervised 
     institutions with their examiners and the candid internal 
     analysis of examiners, by codifying and strengthening the 
     examination privilege. Second, the proposed legislation will 
     enforce existing, nationwide uniform procedures for handling 
     and accessing supervisory information requiring third party 
     litigants to seek supervisory information directly from the 
     Agencies and not indirectly from the supervised institutions. 
     Third, the proposed legislation will resolve the supervised 
     institutions' concerns that their privileges will be waived 
     if they voluntarily permit the Agencies to have access to 
     privileged information that is otherwise essential to an 
     examiner's assessment of safety and soundness. We believe 
     that the proposed legislation favorably resolves many of the 
     unsettled issues regarding the handling of and access to 
     supervisory information, while preserving a process, 
     including judicial review, by which third parties may seek 
     access to supervisory information. Indeed, the Agencies will 
     continue to seek to accommodate the reasonable requests of 
     third party litigants and to release information in 
     appropriate circumstances.
       We hope this responds fully to your request. If we may be 
     of any further assistance, please do not hesitate to contact 
     our respective Agencies.
           Sincerely,
     Eugene A. Ludwig,
       Comptroller, Office of the Comptroller of the Currency.
     Andrew C. Hove,
       Chairman, Federal Deposit Insurance Corporation.
     Alan Greenspan,
       Chairman, Board of Governors of the Federal Reserve System.
     Nicolas P. Retsinas,
       Director, Office of Thrift Supervision.
     Norman E. D'Amours,
       Chairman, National Credit Union Administration.

       

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