`Riggs Bank Rule' Effective Dec. 17

ALEXANDRIA, Va.-NCUA, in line with the other federal banking regulators, approved a rule restricting credit union examiners’ post-employment opportunities to avoid appearances of or actual impropriety. The NCUA Board voted unanimously to approve the so-called “Riggs Bank Rule,” which prohibits credit union examiners from going to work for the institutions they examined. Under the rule, effective Dec. 17, senior NCUA examiners are barred for one year from working for a credit union they examined for two or more months during their last year of service at NCUA. The one-year “cooling-off period” begins the examiner’s last day of employment with NCUA. However, the final regulation read, “The rule also implements the statutory provision authorizing the NCUA Board to grant waivers if the NCUA Chairman certifies that granting the waiver would not affect the integrity of NCUA’s supervisory program.” NCUA’s rule is consistent with the other banking agencies’ joint rule, but credit union specific. In response to a question posed by NCUA Board Member Gigi Hyland, NCUA Staff Attorney Regina Metz explained that the rule will only impact “less than a handful of examiners.” It will mainly affect resident corporate examiners, she said, but it could also apply to the examiners helping credit unions recovering from Hurricane Katrina get back on their feet. Penalties could include a five-year prohibition from working at any federally-insured credit union and/or a $250,000 fine, plus other administrative, civil, criminal, and federal ethics penalties, among others, according to Metz fielding a question from NCUA Board Member Rodney Hood. The final rule contained just two minor changes for consistency and clarification from the proposed regulation issued in July. Congress enacted the Intelligence Reform Act (Public Law 108-458) on Dec. 17, 2004, in response to a highly public situation at Riggs Bank. An examiner from the Office of the Comptroller of the Currency took a position with Riggs Bank, which he had been supervising. Later it was discovered that the examiner did not report problems to the agency that should have been addressed. Riggs, formerly the largest bank holding company headquartered in the nation’s capital, was acquired by PNC. [email protected]