1.3.1: State Banks

Conduct reviews of state member bank failures as required.

Other Information:

State member bank failures. Section 38(k) of the FDI Act requires the OIG to review failed financial institutions supervised by the Board that result in a material loss to the DIF. The material loss review provisions of section 38(k) require that the IG review the Board's supervision of the institution, including the agency's implementation of prompt corrective action; ascertain why the institution's problems resulted in a material loss to the DIF; and make recommendations for preventing any such loss in the future. The Dodd-Frank Act amended section 38(k) of the FDI Act to raise the materiality threshold from either exceeding $25 million or 2 percent of the institution's total assets, whichever was higher, to $200 million for losses that occur during the period January 1, 2010, through December 31, 2011. However, it reduces the threshold in subsequent years. As of January 1, 2014, the threshold will remain at $50 million. In addition, the Dodd-Frank Act amended section 38(k) to require that the OIG prepare a written report in a manner consistent with the requirements of a material loss review for any nonmaterial losses to the DIF that exhibit unusual circumstances warranting an in-depth review. We will continue to conduct reviews of state member bank failures as required.

Stakeholder(s):

• State Banks

Indicator(s):

Indicator:1

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