WASHINGTON - Federal Reserve examiners need additional training so they can properly apply commercial real estate lending rules, the central bank's inspector general found in one of six audits recently sent to Congress.

Other reviews examined the failure of California's Pioneer Bank, and the finances of the central bank and the Federal Financial Institutions Examination Council.

In the commercial real estate audit, the office of Inspector General Brent Bowen reviewed how three examination teams implemented Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989. That provision requires banks to obtain written appraisals by competent professionals for all commercial real estate loans.

The inspector general found that banks violated the rules by failing to secure new appraisals when renewing a loan by allowing the borrower to arrange the appraisal, by getting the appraisal after the loan had closed, and by not hiring professionals to do the work.

The inspector general found that only one of the Fed's three examination teams did an adequate job of uncovering the defects of a commercial real estate program.

Some of the defects were quite egregious, the inspector general said. One report, involving a $1.5 million loan, was so faulty that one appraiser who reviewed the document called it worthless. "I have no faith in the value conclusion," the inspector general quotes the appraiser as saying. In another case, an examiner accepted an 1989 appraisal for a 1993 loan renewal even though the property was generating considerably less income than expected.

Also, the inspector general discovered that all three teams failed to conduct a separate review of each bank's real estate-related internal controls. The inspector general said this allowed loan officers connected to the transaction to review the appraisals, and it permitted departments to operate without written rules.

The Fed can correct the problem if it provides commercial real estate auditors with "comprehensive" appraisal training, and if it designs an appraisal check list to aid examiners, the inspector general concluded.

The inspector general also encouraged the Fed to implement quality assurance program for loan reviews, saying that could detect some of the appraisal problems.

Richard Spillenkothen, the Fed's director of banking supervision and regulation, said in a letter attached to the audit that the inspector general overstated the significance of the deficiencies. Also, he said none of the problems resulted in losses at the banks, and he said the audit occurred at the same time the public was criticizing the Fed for focusing too much on technical violations.

But his area still plans to give the recommendations "careful consideration," Mr. Spillenkothen said.

The inspector general also announced that his office received 314 complaints and referrals during the six-month period ending March 31.

None of the complaints alleged fraud, abuse or waste in Fed programs or operations. But the Fed board did refer three matters to the inspector general.

About a third of the 314 cases involved problems with Treasury bills, savings bonds, and consumer fraud. Another 37 pertained to consumer complaints against specific banks.

The inspector general defined the remaining 166 as "general and nonspecific."

The complaints caused the inspector general to initiate one formal investigation.

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