WASHINGTON–The FDIC’s Inspector General has charged the agency’s staff members with having an “abusive” supervisory attitude that forced banks into no longer making loans based on consumers’ tax refund checks.
According to the FDIC OIG, the “refund anticipation loans” that were once prominently offered by a significant number of banks are now all but gone since the agency and other regulators pressured banks into exiting the product, the OIG said in its report, according to The Wall Street Journal, which said it obtained a summary of the findings.
According to the report, some FDIC supervisors took a “threatening” approach that pushed the three main banks offering such loans out of the refund anticipation loan business, The Wall Street Journal reported.
The OIG said it found “aggressive and unprecedented efforts to use the FDIC’s supervisory and enforcement powers, circumvention of certain controls surrounding the exercise of enforcement power, damage to the morale of certain field examination staff, and high costs to the three impacted institutions.”
The Wall Street Journal quoted FDIC Chairman Martin Gruenberg as saying the agency’s policy isn't to order banks to shut off whole classes of customers, and he has retracted some FDIC statements that could be interpreted that way.
In response to the report, the FDIC said it was updating its policies related to internal communications among supervisors and examiners and its appeals process, the Journal reported.