Bank directors want access to records after FDIC swoops in
The American Association of Bank Directors wants Federal Deposit Insurance Corp. Chairman Shelia Bair to allow bank executives to keep copies of records they may ultimately need to defend themselves following the closing of a bank. In a letter to the FDIC, the trade group said the agency's recently disclosed mandate that doesn't allow bank directors to possess copies of documents restricts the talent pool for possible high-level banking posts. "This policy is shortsighted and counterproductive," said David Baris, executive director of the association. "It will deter qualified persons from accepting positions as bank directors and will motivate currently serving directors to resign." The AABD requested Bair publicly state bank directors may obtain and possess copies of records following the closing of their bank by the FDIC. The group said the federal regulator also doesn't allow a bank to pay for the defense of its directors facing potential lawsuits from the FDIC. "This position singles out bank directors from directors of all other corporations, who, under state corporate statutes and the corporations’ articles of incorporation and bylaws, may be entitled to have their legal fees paid for by their corporations," Baris said. "Bank directors don’t like the FDIC’s stance, and the industry runs the risk of losing some good bank directors." The FDIC has closed 157 banks this year after shuttering 140 in 2009. "Unless directors have maintained, off-bank premises, records of the decisions they made prior to the bank's failure — such as board and committee minutes, records of loans or policies and procedures approved by the board, examination reports and outside expert reports such as audit reports and outside loan reports — they are effectively prevented from defending the actions they took as directors," according to the AABD. The FDIC wasn't immediately available to comment on the letter. Write to Jason Philyaw.