Poor Arthur Andersen must be feeling a little left out.
Just six months after hiring Arthur Andersen & Co. to develop new guidelines for fair-lending exams - and weeks before the consultant initially hoped to have its review complete - two of the regulators have gone ahead and put out their own.
The Federal Deposit Insurance Corp. issued new fair-housing guidelines for its examiners in April. On May 5, the Office of the Comptroller of the Currency did the same. "You do have to wonder a little bit, don't you?" said Deborah B. Goldberg, community reinvestment specialist at the Center for Community Change.
"It certainly does raise some questions about how they view the value of what they're going to get from Arthur Andersen."
Lack of Experience Cited
When the agencies signed the consultant in November, they justified the $95,000 expense by saying an independent appraisal was needed to lend authority to any changes they would make.
But civil rights groups were quick to point out that the Chicago-based consulting firm lacked the fair-lending expertise needed to lend credibility to its proposal.
It looks as if it took the agencies a little longer to figure this out. The regulators have seen a draft of the firm's proposal and sent it back for more work.
And when the new comptroller, Eugene Ludwig, announced his agency's new guidelines, Steve Cross, the deputy comptroller for compliance management, acknowledged that Arthur Andersen was "learning" as it went.
"Whether the contract was worth $90,000 or not is not for me to say," he said.
Not |Going to Sit and Wait'
But at least the Comptroller's office made a token bow to Arthur Andersen. It called its new exam procedures "interim." The FDIC's were final.
"We weren't going to sit and wait on that," said Janice M. Smith, director of the FDIC's Office of Consumer Affairs. "The way things are moving, a month, two months, three months, that's a lot of time."
But she defended the agencies' decision to hire the firm and said the FDIC could revise its exam procedures again if the Andersen results warrant it.
"I don't see it as a waste," she said. "Hopefully, they will come up with some improvements."