Formal Supervisory Process for Savings and Loan Associations should be Strengthened.
GENERAL ACCOUNTING OFFICE WASHINGTON DC GENERAL GOVERNMENT DIV
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Supervisory agreements and cease and desist orders are two formal enforcement tools used by the Federal Home Loan Bank Board to supervise savings and loan institutions with federally insured deposits. This report discusses the reluctance of supervisory personnel to fully use these formal enforcement tools because of their long processing times. Instead, supervisory personnel place greater reliance on informal actions that may not be sufficient to achieve corrective action. In addition, the Federal Home Loan Bank Board has spent State examiner training program funds to train examiners from States which do not contribute to the program objective of reducing the Federal examination burden. For instance, examiners were trained from States which refuse to share in the examinations of federally insured, State-chartered savings and loan associations. GAO recommends action to improve the administration of the State examiner training program and the processing of formal supervisory actions. Author
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