BOARD OF GOVERNORS
FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20551
DIVISION OF BANKING
SUPERVISION AND REGULATION
SR 94-16 (FIS)
February 25, 1994TO THE OFFICER IN CHARGE OF SUPERVISION
AT EACH FEDERAL RESERVE BANK
SUBJECT: Meals and Other Gifts Offered to Examiners and Assistant Examiners
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.
cc: The General Counsels and Ethics Officers
at Each Federal Reserve Bank
SR letters | 1994