GAO Presses FDIC On Examiner Rotation, Crypto Oversight
By CU Today Staff —
WASHINGTON—The U.S. Government Accountability Office is urging the Federal Deposit Insurance Corp. to address two longstanding supervisory concerns: requiring greater rotation of bank examiners and strengthening coordination with other regulators on blockchain and cryptocurrency risks.
The recommendations were highlighted in a priority recommendations letter to FDIC Chairman Travis Hill that was publicly released Monday.
GAO said the FDIC should strengthen bank supervision by requiring certain case managers and examiners to rotate assignments. The watchdog previously found that the agency did not require rotation for some supervisory personnel overseeing large institutions, a practice that could threaten examiner independence and potentially affect supervisory outcomes. GAO said implementing a rotation requirement would help ensure supervisory decisions remain independent and evidence-based.
The watchdog also renewed its call for the FDIC and other federal financial regulators to establish a formal mechanism for identifying and responding to blockchain-related risks. GAO noted that regulators still lack an ongoing coordination framework despite the rapid growth of blockchain-based financial products and services. Such a mechanism, GAO said, would help agencies collectively identify emerging risks and develop timely regulatory responses.
The recommendations come as the FDIC assumes a larger role in overseeing stablecoin activities under the GENIUS Act and as the agency considers additional guidance for banks engaging with public blockchains. GAO said addressing the outstanding recommendations would help the FDIC strengthen supervision, mitigate threats to regulatory independence and better respond to evolving risks tied to digital assets and blockchain technology.
Originally reported by CU Today.