WASHINGTON - The Comptroller of the Currency has effectively choked off the Federal Deposit Insurance Corp.'s backup examination power.

The FDIC is to longer examining any national bank or thrift, and no such exams are scheduled.

Congress in 1991 gave the FDIC authority to examine any bank or thrift because law-makers wanted a more objective, "backup" examiner checking up on the primary regulators.

The way, it had been working, the FDIC each quarter told the OCC, the Office of Thrift Supervision, and Federal Reserve Board which institutions it wished to examine. The agencies then worked together to arrange a joint visit.

But this summer, the OCC wearied of having the FDIC looking over its shoulder, according to FDIC staff members.

|Unofficial Pressure' at First

We started getting unofficial pressure from OCC to not participate in already scheduled joint exams," a field examiner said. "It actually got to the point of them saying, |No, you can't come in with us.'"

OCC officials deny this. But true or not, Comptroller Eugene A. Ludwig has made clear that he thinks FDIC backup exams are redundant. Invoking President Clinton's name, Mr. Ludwig said the administration is committed to cutting out regulatory duplication.

So in September, Mr. Ludwig, who holds a seat on the FDIC's board, threw a plan on the table to curb the agency's backup exams. The proposal caught the senior FDIC staff off guard.

Acting FDIC Chairman Andrew C. "Skip" Hovie Jr. said in an interview at the time that Mr. Ludwig had alerted him to his plan the morning of the meeting. Asked why the staff was so surprised, Mr. Hove said simply: "Because I didn't tell them."

Hove's Avowal

The board unanimously adopted Mr. Ludwig's plan, which requires the FDIC staff to get the board's approval before examining any national bank or thrift or any state bank that belongs to the Fed.

At the time the plan was adopted, Mr. Hove insisted that nothing had changed. He said backup exams would continue.

But staff members groused that their chance of getting approval for any backup exam was next to zero. That's because the FDIC board now has just three members: Mr. Hove, who is hoping for reappointment: Mr. Ludwig; and Jonathan Fiechter, acting OTS chairman, who also would like to keep his job.

Thus, two of the three seats are controlled by primary regulators - the people backup authority was designed to back up.

When the decision to require board approval of exams was made in September, the FDIC staff was instructed to whittle down the number of institutions it planned to examine in the fourth quarter. That list was to be presented Sept. 28 for board approval.

When the staff targeted 55 institutions, First Union among them, Mr. Ludwig told them to pare the list to the most crucial cases. The resulting list had about 12 institutions, agency sources said. But the board thus far has not approved the request.

2-Month Hiatus on Meetings

There has been no open meeting of the FDIC board since Sept. 21. Until recently, it had met in open session every other Tuesday. (The FDIC has an open board meeting scheduled today, but nothing on the agenda concerns backup exams.)

Mr. Ludwig effectively has stonewalled us," a senior FDIC official said.

House Banking Committee Chairman Henry B. Gonzalez, D-Tex.. and Rep. Jim Leach, R-Iowa, sent Mr. Hove a letter in August warning him against watering down FDIC powers. But neither lawmaker has said anything about the matter since.

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