12 U.S.C. § 4517 — Examinations

Page 1655 TITLE 12—BANKS AND BANKING § 4517 ducted under this subsection. The report to the Congress shall set forth the scope of the audit and shall include the statement of assets and liabilities and surplus or deficit, the state- ment of income and expenses, the statement of sources and application of funds, and such comments and information as may be deemed necessary to inform Congress of the financial operations and condition of the Agency, to- gether with such recommendations with re- spect thereto as the Comptroller General may deem advisable. A copy of each report shall be furnished to the President and to the Agency at the time submitted to the Congress. (3) Assistance and costs For the purpose of conducting an audit under this subsection, the Comptroller Gen- eral may, in the discretion of the Comptroller General, employ by contract, without regard to section 6101 of title 41, professional services of firms and organizations of certified public accountants for temporary periods or for spe- cial purposes. Upon the request of the Comp- troller General, the Director of the Agency shall transfer to the Government Account- ability Office from funds available, the amount requested by the Comptroller General to cover the full costs of any audit and report conducted by the Comptroller General. The Comptroller General shall credit funds trans- ferred to the account established for salaries and expenses of the Government Account- ability Office, and such amount shall be avail- able upon receipt and without fiscal year limi- tation to cover the full costs of the audit and report. (Pub. L. 102–550, title XIII, § 1316, Oct. 28, 1992, 106 Stat. 3947; Pub. L. 104–134, title I, § 101(e) [title II, § 211], Apr. 26, 1996, 110 Stat. 1321–257, 1321–288; renumbered title I, Pub. L. 104–140, § 1(a), May 2, 1996, 110 Stat. 1327; Pub. L. 110–289, div. A, title I, § 1106, July 30, 2008, 122 Stat. 2669.) Editorial Notes REFERENCES IN TEXT The Federal Housing Finance Regulatory Reform Act of 2008, referred to in subsec. (a)(4), is div. A of Pub. L. 110–289, July 30, 2008, 122 Stat. 2659. Title III of div. A of the Pub. L. 110–289 is set out as a note under section 4511 of this title. For complete classification of Pub. L. 110–289 to the Code, see Short Title note under section 4501 of this title and Tables. This Act, referred to in subsec. (c)(2), (3), is Pub. L. 102–550, Oct. 28, 1992, 106 Stat. 3672, known as the Hous- ing and Community Development Act of 1992. For com- plete classification of this Act to the Code, see Short Title of 1992 Amendment note set out under section 5301 of Title 42, The Public Health and Welfare, and Tables. The effective date of the Federal Housing Finance Regulatory Reform Act of 2008, referred to in subsec. (f)(5), probably means the date of enactment of div. A of Pub. L. 110–289, which was approved July 30, 2008. Section 1438(b) of this title, referred to in subsec. (f)(5), was repealed by Pub. L. 110–289, div. A, title II, § 1204(2), July 30, 2008, 122 Stat. 2786. CODIFICATION In subsec. (h)(3), ‘‘section 6101 of title 41’’ substituted for ‘‘section 3709 of the Revised Statutes of the United States (41 U.S.C. 5)’’ on authority of Pub. L. 111–350, § 6(c), Jan. 4, 2011, 124 Stat. 3854, which Act enacted Title 41, Public Contracts. AMENDMENTS 2008—Subsec. (a). Pub. L. 110–289, § 1106(1), added sub- sec. (a) and struck out former subsec. (a). Prior to amendment, text read as follows: ‘‘The Director may, to the extent provided in appropriation Acts, establish and collect from the enterprises annual assessments in an amount not exceeding the amount sufficient to pro- vide for reasonable costs and expenses of the Office, in- cluding the expenses of any examinations under section 4517 of this title. The initial annual assessment shall include any startup costs of the Office and any antici- pated costs and expenses of the Office for the following fiscal year.’’ Subsec. (b)(2) to (4). Pub. L. 110–289, § 1106(2), realigned margins, added par. (2), and redesignated former pars. (2) and (3) as (3) and (4), respectively. Subsec. (c). Pub. L. 110–289, § 1106(3), added subsec. (c) and struck out former subsec. (c). Prior to amendment, text read as follows: ‘‘The semiannual payments made pursuant to subsection (b) of this section by any enter- prise that is not classified (for purposes of subchapter II of this chapter) as adequately capitalized may be in- creased, as necessary, in the discretion of the Director to pay additional estimated costs of regulation of the enterprise.’’ Subsec. (d). Pub. L. 110–289, § 1106(4), substituted ‘‘Ex- cept with respect to amounts collected pursuant to sub- section (a)(3), if’’ for ‘‘If’’. Subsecs. (e) to (h). Pub. L. 110–289, § 1106(5), added sub- secs. (e) to (h) and struck out former subsecs. (e) to (g) which related, respectively, to initial special assess- ment, the Federal Housing Enterprises Oversight Fund, and budget and financial reports. 1996—Subsec. (b)(2). Pub. L. 104–134 added par. (2) and struck out heading and text of former par. (2). Text read as follows: ‘‘The annual assessment shall be pay- able semiannually on September 1 and March 1 of the year for which the assessment is made.’’ Statutory Notes and Related Subsidiaries NON-REDUCTION OF FIRST ANNUAL ASSESSMENT Pub. L. 103–124, title II, Oct. 28, 1993, 107 Stat. 1290, provided that notwithstanding the last sentence of sub- sec. (e) of this section, the amount of this first annual assessment was not to be reduced by any part of the amount of the initial special assessment under subsec. (e). § 4517. Examinations (a) Annual examination The Director shall annually conduct an on-site examination under this section of each regu- lated entity to determine the condition of the regulated entity for the purpose of ensuring its financial safety and soundness. (b) Other examinations In addition to annual examinations under sub- section (a), the Director may conduct an exam- ination under this section of a regulated entity whenever the Director determines that an exam- ination is necessary or appropriate. (c) Examiners The Director shall appoint examiners to con- duct examinations under this section. The Di- rector may contract with the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, or the Federal Deposit Insur- ance Corporation for the services of examiners to conduct examinations under this section. The Director shall reimburse such agencies for any costs of providing examiners from amounts available in the Federal Housing Enterprises Oversight Fund. Page 1656 TITLE 12—BANKS AND BANKING § 4518 (d) Inspector General There shall be within the Agency an Inspector General, who shall be appointed in accordance with section 403(a) of title 5. (e) Law applicable to examiners The Director and each examiner shall have the same authority and each examiner shall be sub- ject to the same disclosures, prohibitions, obli- gations, and penalties as are applicable to exam- iners employed by the Federal Reserve banks. (f) Technical experts The Director may obtain the services of any technical experts the Director considers appro- priate to provide temporary technical assistance relating to examinations to the Director, offi- cers, and employees of the Office. The Director shall describe, in the record of each examina- tion, the nature and extent of any such tem- porary technical assistance. (g) Oaths, evidence, and subpoena powers In connection with examinations under this section, the Director shall have the authority provided under section 4641 of this title. (h) Appointment of accountants, economists, and examiners (1) Applicability This section shall apply with respect to any position of examiner, accountant, economist, and specialist in financial markets and in technology at the Agency, with respect to su- pervision and regulation of the regulated enti- ties, that is in the competitive service. (2) Appointment authority The Director may appoint candidates to any position described in paragraph (1)— (A) in accordance with the statutes, rules, and regulations governing appointments in the excepted service; and (B) notwithstanding any statutes, rules, and regulations governing appointments in the competitive service. (i) Ombudsman The Director shall establish, by regulation, an Office of the Ombudsman within the Agency, which shall be responsible for considering com- plaints and appeals, from any regulated entity and any person that has a business relationship with a regulated entity, regarding any matter relating to the regulation and supervision of such regulated entity by the Agency. The regu- lation issued by the Director under this sub- section shall specify the authority and duties of the Office of the Ombudsman. (Pub. L. 102–550, title XIII, § 1317, Oct. 28, 1992, 106 Stat. 3949; Pub. L. 110–289, div. A, title I, §§ 1105(a), (b), (e), 1153(b)(1)(A), July 30, 2008, 122 Stat. 2667, 2668, 2774; Pub. L. 111–203, title III, § 365(2), July 21, 2010, 124 Stat. 1555; Pub. L. 117–286, § 4(b)(34), Dec. 27, 2022, 136 Stat. 4347.) Editorial Notes AMENDMENTS 2022—Subsec. (d). Pub. L. 117–286 substituted ‘‘section 403(a) of title 5.’’ for ‘‘section 3(a) of the Inspector Gen- eral Act of 1978.’’ 2010—Subsec. (c). Pub. L. 111–203 substituted ‘‘or the Federal Deposit Insurance Corporation’’ for ‘‘the Fed- eral Deposit Insurance Corporation, or the Director of the Office of Thrift Supervision’’. 2008—Subsec. (a). Pub. L. 110–289, § 1105(a)(1), sub- stituted ‘‘regulated entity’’ for ‘‘enterprise’’ in two places. Subsec. (b). Pub. L. 110–289, § 1105(a)(2), inserted ‘‘of a regulated entity’’ after ‘‘under this section’’ and sub- stituted ‘‘or appropriate’’ for ‘‘to determine the condi- tion of an enterprise for the purpose of ensuring its fi- nancial safety and soundness’’. Subsec. (c). Pub. L. 110–289, § 1105(a)(3), inserted ‘‘to conduct examinations under this section’’ after ‘‘serv- ices of examiners’’. Subsecs. (d) to (f). Pub. L. 110–289, § 1105(a)(4), (5), added subsec. (d) and redesignated former subsecs. (d) and (e) as (e) and (f), respectively. Former subsec. (f) re- designated (g). Subsec. (g). Pub. L. 110–289, § 1153(b)(1)(A), which di- rected technical amendment in subsec. (f) to reference in original act which appears in text as reference to section 4641 of this title, was executed by making the amendment in subsec. (g), to reflect the probable intent of Congress and the redesignation of subsec. (f) as (g) by Pub. L. 110–289, § 1105(a)(4). See below. Pub. L. 110–289, § 1105(a)(4), redesignated subsec. (f) as (g). Subsec. (h). Pub. L. 110–289, § 1105(b), added subsec. (h). Subsec. (i). Pub. L. 110–289, § 1105(e), added subsec. (i). Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2010 AMENDMENT Amendment by Pub. L. 111–203 effective on the trans- fer date, see section 351 of Pub. L. 111–203, set out as a note under section 906 of Title 2, The Congress. § 4518. Prohibition and withholding of executive compensation (a) In general The Director shall prohibit the regulated enti- ties from providing compensation to any execu- tive officer of the regulated entity that is not reasonable and comparable with compensation for employment in other similar businesses (in- cluding other publicly held financial institu- tions or major financial services companies) in- volving similar duties and responsibilities. (b) Factors In making any determination under sub- section (a), the Director may take into consider- ation any factors the Director considers rel- evant, including any wrongdoing on the part of the executive officer, and such wrongdoing shall include any fraudulent act or omission, breach of trust or fiduciary duty, violation of law, rule, regulation, order, or written agreement, and in- sider abuse with respect to the regulated entity. The approval of an agreement or contract pursu- ant to section 1723a(d)(3)(B) of this title or sec- tion 1452(h)(2) of this title shall not preclude the Director from making any subsequent deter- mination under subsection (a). (c) Withholding of compensation In carrying out subsection (a), the Director may require a regulated entity to withhold any payment, transfer, or disbursement of com- pensation to an executive officer, or to place such compensation in an escrow account, during the review of the reasonableness and com- parability of compensation.