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Should Bank Examiners Have to Make a Lifetime Commitment?

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When former Federal Deposit Insurance Corp. chairman Sheila Bair visited American Banker's office this month, she reiterated her call to ban the revolving door between the industry and its regulators. That is, she wants regulators to be prohibited from turning around and taking a high-paying job as an industry or private sector lobbyist at the end of their tenure.  

Moreover, Bair felt bank examiners, specifically, should be required to commit to the profession.

"I think that should be a lifetime calling,"she said. "Pay them more and train them more and give them more status, but in return, expect them to make a lifelong commitment."

Not everyone was on board with this assertion. In response to an American Banker article highlighting Bair's remarks, one commenter made a strong case for why such a commitment might not be practical … or fair. 

"Constantly being on the road and away from home is not an attractive lifelong profession," the commenter wrote, adding that, while the pay raise Bair advocated was certainly in order, "it should be expected that [examiners] will move on after contributing to the public interest and learning a great deal."

The commenter also pointed out that, at times, there were benefits to having a person move from regulating the industry to working in it.

"Some of the best examiners may serve the interests of prudential regulation by being bank managers … having been exposed to the other side of risk management," they wrote.

Also, if an examiner makes a lifetime commitment to the job, will the job return the favor? Richard I. Isacoff, a lawyer in Pittsfield, Mass., who used to work out failed institutions for the FDIC and, earlier, the old Federal Savings and Loan Insurance Corp., tweeted that he "loved [the] work. Job left-I didn't."

Do you believe bank examiners should be required to make a lifelong commitment? Why or why not? Let us know in the comments section below.

Jeanine Skowronski is the deputy editor of BankThink. You can contact her at Jeanine.skowronski@sourcemedia.com or follow her at Twitter @JeanineSko

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Comments (17)
No, and they should be permitted to marry and have children too.
Posted by rrbarnet | Monday, October 15 2012 at 1:40PM ET
Sounds like Ms. Bair wants to run the Teacher's Union. How's that worked out for everyone?
Posted by Watchdog1 | Monday, October 15 2012 at 1:44PM ET
To expect people to volunteer their freedom to choose their profession or employer is naive at best and st
Posted by Gore the Ox | Monday, October 15 2012 at 1:45PM ET
I don't believe examiners should be asked to make a lifelong commitment, any more than I would ask anyone to make such a commitment to any job. If there is concern that a former examiner could exert undue influence as a lobbyist, then certainly a provision for 'number of years' prior to taking such jobs could be implemenented (not that it seems to have worked in any other application!!!!!).

I would certainly welcome a former examiner into areas of banking where they can use their expertise and experience to improve internal controls.
Posted by hendricksondoug | Monday, October 15 2012 at 1:48PM ET
Isn't this still America - Land of the Free and Home of the Brave? One can address the revolving door by setting the ethics policy to bar any contact for a longer period of time. As for the lifetime commitment idea - I would check with the Vatican on that and see how that is going. In all seriousness, this is America - think freedom, liberty, etc. I would love to hear what Thomas Jefferson would have to say about that idea.
Posted by jpodvin | Monday, October 15 2012 at 1:50PM ET
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