United States Government Publishing Office publisher pbl distributor dst United States Government Accountability Office General Government Division author aut Government Organization text government publication eng GAOREPORTS Legislative Agency Publications gao legislative 2010-08-12 U.S. Government Printing Office 1995-03-16 monographic deposited born digital 50 p. GA 1.13:GGD-95-21 https://www.govinfo.gov/app/details/GAOREPORTS-GGD-95-21 P0b002ee180394fd0 f:gg95021 DGPO 2010-08-12 2011-03-24 GAOREPORTS-GGD-95-21 machine generated eng fdlp REPORT GAOREPORTS-GGD-95-21 GGD-95-21 Assets Bank management Banking regulation Investments Insured commercial banks Mutual funds Financial institutions Disclosure law Investment planning Bank examination Letter Report GGD Pursuant to a congressional request, GAO provided information on the extent to which banks have invested trust assets into proprietary mutual funds, focusing on: (1) the disclosure and consent requirements that apply when trust assets are invested into these funds; (2) whether double fees on invested trust assets are legal; and (3) the regulatory controls that prevent banks from acting in their own self-interest.<p/>GAO found that: (1) most banks have not invested trust assets in proprietary mutual funds; (2) the majority of funds invested in bank proprietary mutual funds are from non-trust assets; (3) by the end of 1992, about $24 billion in trust assets had been used to start up proprietary mutual funds which represented about 15 percent of the total assets in these funds; (4) the bank industry believed the trust asset investments were understated because the estimates did not take into account conversions and new trust investments; (5) in 1993, about $45 billion in employee benefit and personal trust assets were invested in short-term money market mutual funds; (6) industry and regulatory officials believe that trust investments are becoming more attractive to investors for tax reasons; (7) investment disclosure requirements vary by state and most states that allow proprietary mutual fund investments do not require beneficiary consent; (8) although 8 states are in compliance with the double fee prohibitions on employee accounts, 27 states allow double fees to be charged; (9) most banks lack incentives to charge double fees because of competition and the possibility of federal penalties and beneficiary lawsuits; (10) when investing trust assets, banks are prohibited from acting in their own self-interest, must justify their investments, and are subject to federal review; and (11) the effectiveness of trust examinations could not be determined, since the number of examinations are limited and use of proprietary mutual funds in trusts is new. https://www.govinfo.gov/content/pkg/GAOREPORTS-GGD-95-21/html/GAOREPORTS-GGD-95-21.htm https://www.govinfo.gov/content/pkg/GAOREPORTS-GGD-95-21/pdf/GAOREPORTS-GGD-95-21.pdf GAO/GGD-95-21 https://www.govinfo.gov/app/details/GAOREPORTS-GGD-95-21 Letter Report GAO/GGD-95-21; Trust Assets: Investment of Trust Assets in Bank Proprietary Mutual Funds; Assets Bank management Banking regulation Investments Insured commercial banks Mutual funds Financial institutions Disclosure law Investment planning Bank examination