TO THE OFFICER IN CHARGE OF SUPERVISION AT EACH FEDERAL RESERVE BANK
Background
A criminal statute prohibits an examiner or assistant
examiner from accepting a loan or gratuity from any domestic or
foreign banking organization, including an insured depository
institution, bank holding company, Edge corporation, or U.S.
branch or agency of a foreign bank, that the examiner has
examined. A similar statute prohibits such a regulated entity
from making or granting a loan or giving a gratuity to an
examiner or assistant examiner who examines or has authority to
examine such an entity regardless of whether he or she has, in
fact, examined it.
In addition to restrictions placed on examiners as a
result of the criminal laws, it has been a longstanding policy of
the Federal Reserve that System employees, including examiners,
avoid any action that might result in or create the appearance of
(a) using their Federal Reserve position for private gain, (b)
giving preferential treatment to any person or institution, (c)
losing independence or impartiality, or (d) making decisions
outside of official channels.
In the interest of ensuring System-wide consistency in
this area, we are issuing this policy clarification regarding
meals and gifts for all Reserve Bank personnel appointed by the
Board as examiners or assistant examiners. The question of the
acceptance of meals and gratuities by other Reserve Bank
personnel, including supervisory officials, is now being
considered in the context of a Uniform Code of Conduct that is
currently being drafted by the Board's Legal Division and the
Reserve Banks.
Restrictions on Meals and Gifts
Consistent with the criminal laws and the need to avoid
even the appearance of a conflict of interest or possible
impropriety, Federal Reserve examiners and assistant examiners
may not accept a meal or a gift from a banking organization that
the examiner examines or is authorized to examine. While it is
not entirely clear whether a meal would be deemed to be a
gratuity under the criminal statutes in all circumstances, Board
staff believe that a conservative approach to this issue is
warranted.
Notwithstanding the aforementioned restriction,
examiners and assistant examiners may eat in the cafeteria of a
regulated entity, even if the cafeteria is subsidized, provided
that he or she pays for the meal at the rate charged the general
public (i.e., guests other than regulators visiting the
premises). Likewise, examiners and assistant examiners may
accept modest items of food and refreshments such as soft drinks,
coffee and donuts offered other than as part of a meal. In no
event, however, should an examiner or assistant examiner accept
an invitation from a regulated entity to eat in a private dining
room or at a restaurant, unless the examiner or assistant
examiner pays for the meal.
Examiners and assistant examiners may accept items with
little intrinsic value, such as a pen, pencil, or calendar, from
a banking organization that they examine or have the authority to
examine, so long as the items are provided to the general public
by the banking organization. However, in all cases, they should
avoid any situation that could suggest even the possibility of a
conflict of interest, or appear to call into question the
objectivity and integrity of the supervisory process.
This policy should be disseminated to all affected
personnel immediately.
Questions may be directed to Cynthia Rotruck (202-452-3633) of this Division or Cary Williams (202-452-3295) in the
Board's Legal Division.
Director
cc: The General Counsels and Ethics Officers
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