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Open Recommendations (10 total)

Sexual Harassment: Actions Needed to Improve Prevention Training for Federal Civilian Employees

GAO-24-106589
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1 Open Recommendations
Agency Affected Recommendation Status
Federal Deposit Insurance Corporation The Chairman of the Federal Deposit Insurance Corporation should develop and implement a plan to evaluate the agency's required sexual harassment prevention training to identify needed improvements. The evaluation plan should include an assessment of training content and implementation to determine whether revisions are needed to better align with management practices to enhance the effectiveness of sexual harassment prevention training. (Recommendation 4)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

Financial Technology: Agencies Should Provide Clarification on Lenders' Use of Alternative Data [Reissued with revisions on Mar. 12, 2019.]

GAO-19-111
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1 Open Recommendations
1 Priority
Agency Affected Recommendation Status
Federal Deposit Insurance Corporation
Priority Rec.
The Chairman of the Federal Deposit Insurance Corporation should, in coordination with the other federal banking regulators and the Bureau of Consumer Financial Protection and with input from relevant stakeholders, communicate in writing to banks that engage in third-party relationships with fintech lenders on the appropriate use of alternative data in the underwriting process, including issues to consider when selecting types of alternative data to use. (Recommendation 3)
Open
In December 2019, the Board of Governors of the Federal Reserve System, the Consumer Financial Protection Bureau, the Federal Deposit Insurance Corporation (FDIC), the National Credit Union Administration, and the Office of the Comptroller of the Currency (the agencies) issued an interagency statement on the use of alternative data in credit underwriting. The statement broadly highlights some potential benefits and risks of using alternative data and encourages firms to responsibly use alternative data. However, the statement does not provide firms or banks with specific direction on the appropriate use of alternative data. In March 2021, the federal banking regulators and the Consumer Financial Protection Bureau issued a request for information (RFI) on Financial Institutions' Use of Artificial Intelligence, including Machine Learning, and in July 2021, the banking regulators issued proposed third party risk management guidance for comment, both of which discuss alternative data. In June 2023, the banking regulators issued final interagency guidance on third party risk management, but the guidance does not address specific topics, such as alternative data, or specific types of third-party relationships, such as relationships with fintech companies. Further, the banking regulators and Consumer Financial Protection Bureau have not issued any documentation related to the RFI as of April 9, 2024. To fully implement this recommendation, FDIC needs to provide, in coordination with other federal banking regulators and the Consumer Financial Protection Bureau, finalized written communication that gives banks that engage in third party relationships with fintech lenders specific direction on the appropriate use of alternative data in the underwriting process. Without such direction, banks partnering with financial technology lenders may not effectively manage associated risks, including compliance with fair lending and other consumer protection laws.

Bank Supervision: FDIC Could Better Address Regulatory Capture Risks

GAO-20-519
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1 Open Recommendations
Agency Affected Recommendation Status
Federal Deposit Insurance Corporation The Division Director for Risk Management Supervision (RMS) should require case managers to document how high-risk areas in the scoping plan were considered by the examination team if they were not addressed in the examination report. (Recommendation 1)
Open
In November 2021, FDIC officials provided documentation of examination policies they updated in March 2021 to require that examiners-in-charge discuss proposed changes to the examination scope with their manager and obtain concurrence for any material changes in the examination scope. Although this policy change likely would improve management's control over changes to scoping plans, it would not necessarily create better documentation to track how FDIC's case managers reviewed whether the work described in the scoping plan was appropriately evaluated and documented by the examination team. As stated in our report, if case managers documented that examination procedures for areas not discussed in the examination report were assessed and that examiners' conclusions about these areas were well-supported, RMS management would have better assurance that case managers were monitoring examination teams' procedures and conclusions for all planned aspects of the examination. We continue to believe that RMS management could better assure the effectiveness of the case-manager review process by implementing a requirement for case managers to review and document how all elements of the examination scope--including those not discussed in the report of examination--were addressed by the examination team. In August 2023, FDIC officials indicated that they did not intend to take further steps beyond those already taken to address this recommendation.

Banking Services: Regulators Have Taken Actions to Increase Access, but Measurement of Actions' Effectiveness Could Be Improved

GAO-22-104468
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1 Open Recommendations
Agency Affected Recommendation Status
Federal Deposit Insurance Corporation The Chairman of FDIC should develop and implement outcome-oriented performance measures for its strategic objective of ensuring access to safe and affordable bank services that reflect leading practices, including demonstrating results, measuring outcomes, and providing useful information for decision-making. (Recommendation 1)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

Management Report: Continued Improvements Needed in FDIC's Internal Control over Contract Documentation and Payment-Review Processes

GAO-23-106656
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1 Open Recommendations
Agency Affected Recommendation Status
Federal Deposit Insurance Corporation The Deputy Director of the Acquisition Services Branch of the Division of Administration should design and implement a policy that (1) requires all oversight managers and contracting officers from all divisions to routinely take mandatory training in order to review and enhance their awareness of the existing policies and procedures for contract documentation and payment-review processes and (2) includes an established process for routinely tracking the completion of such training. (Recommendation 1)
Open
In its written comments on our draft report, FDIC acknowledged our findings and provided planned corrective actions to address our recommendations. FDIC stated it will review and update existing policy related to mandatory training for contracting officers and oversight managers and require annual refresher training. It also stated it will use automated capabilities to track training completion. We will continue to monitor FDIC efforts to address this recommendation.

Management Report: Continued Improvements Needed in FDIC's Internal Control over Contract Documentation and Payment-Review Processes

GAO-23-106656
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3 Open Recommendations
Agency Affected Recommendation Status
Federal Deposit Insurance Corporation The Chief Risk Officer should design and implement procedures for tracking and communicating to management the status of corrective actions (e.g., for considerations, observations, or takeaways) for contract monitoring reviews and testing that the Office of Risk Management and Internal Controls performs until FDIC fully implements corrective actions. (Recommendation 2)
Open
In its written comments on our draft report, FDIC acknowledged our findings and provided planned corrective actions to address our recommendations. FDIC stated it will use its Audit Report Tracking System to track and periodically communicate to management the status of corrective actions for contract monitoring reviews and testing performed until risks in this area are mitigated. We will continue to monitor FDIC efforts to address this recommendation.
Federal Deposit Insurance Corporation The Deputy Director of the Acquisition Services Branch of the Division of Administration should update FDIC's existing policies and procedures to prohibit contracting officers and oversight managers from using hard drives to store and maintain contract documentation, in order to mitigate the risk of losing documentation and making improper payments. (Recommendation 3)
Open
In its written comments on our draft report, FDIC acknowledged our findings and provided planned corrective actions to address our recommendations. FDIC stated it will update existing policies and procedures to clarify final contractual documentation requirements. We will continue to monitor FDIC efforts to address this recommendation.
Federal Deposit Insurance Corporation The Deputy Director of the Acquisition Services Branch of the Division of Administration should update FDIC's existing policies and procedures to define acceptable time frames for uploading contract documentation to a centralized location in order to reasonably assure that contracting officers and oversight managers properly document and support contracts in a timely manner. (Recommendation 4)
Open
In its written comments on our draft report, FDIC acknowledged our findings and provided planned corrective actions to address our recommendations. FDIC stated it reviewed its policies and procedures and determined that the time frames were acceptable and appropriate. However, our review of FDIC's policy found that it does not provide clear time frames for uploading contract documentation to a centralized location. It also stated that it issued a new Quality Assurance process in April 2023, which implements more detailed reviews of contract documentation and the timely storage of contract documentation. We will continue to monitor FDIC efforts to address this recommendation.

Blockchain in Finance: Legislative and Regulatory Actions Are Needed to Ensure Comprehensive Oversight of Crypto Assets

GAO-23-105346
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1 Open Recommendations
1 Priority
Agency Affected Recommendation Status
Federal Deposit Insurance Corporation
Priority Rec.
The Chairman of the Federal Deposit Insurance Corporation should jointly establish or adapt an existing formal coordination mechanism with CFPB, CFTC, the Federal Reserve, NCUA, OCC, and SEC for collectively identifying risks posed by blockchain-related products and services and formulating a timely regulatory response. To facilitate these objectives, this mechanism could include formal planning documents that establish the frequency of meetings and processes for identifying risks and responding to them within agreed-upon time frames. (Recommendation 3)
Open
FDIC neither agreed nor disagreed with the recommendation. In addition, FDIC noted it has coordinated through venues including the Financial Stability Oversight Council, the President's Working Group, and some international organizations. However, the regulators' coordination efforts have not always addressed risks posed by crypto assets in a timely manner. We maintain that a formal coordination mechanism focused on collectively identifying risks posed by blockchain-related products and services and formulating timely regulatory responses could improve protections for consumers and investors, mitigate illicit finance and threats to financial stability, and promote responsible innovation and U.S. competitiveness.

Financial Technology: Agencies Can Better Support Workforce Expertise and Measure the Performance of Innovation Offices

GAO-23-106168
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1 Open Recommendations
Agency Affected Recommendation Status
Federal Deposit Insurance Corporation The Chair of the Federal Deposit Insurance Corporation should fully incorporate leading workforce planning practices for the primary offices involved in policymaking and oversight related to financial technology by collecting staff skillset data and determining the critical financial technology skills the agency needs; developing targeted strategies to address financial technology-related skills gaps; and measuring the effectiveness of its financial technology-related training in addressing skill needs. (Recommendation 4)
Open
When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.
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