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4000 - Advisory Opinions

Request for Opinion on the Existence of Prohibited Management Official Interlocks


August 23, 1979

Daniel W. Persinger, Pamela E. F. LeCren, Attorney

The following is in response to your letter of August 2, 1979 requesting clarification on whether or not *** is in violation of the Depository Institution Management Interlocks Act ("Title II" of FIRIRCA) and its implementing regulations (12 C.F.R. Part 348) as the result of engaging the service of an independent auditor.

Title II in general prohibits the same person from concurrently serving as a management official of any two depository institutions that are located in the same Standard Metropolitan Statistical Area or that are located in the same, adjacent, or contiguous cities, towns, or villages. The term "management official" is defined to include, among other things, an employee or officer with management functions. (See § 348.2(h) of the regulations and § 202(4) of the statute.) You indicate in your letter that *** has engaged the services of an independent auditor who will perform the internal audit functions of the bank. The auditor is currently serving as an officer of a savings and loan association in the same community in which *** is located.1

It is our opinion that the facts presented do not reflect a prohibited management official interlock. An independent auditor who is performing an internal audit for a bank is not normally considered an employee with management functions. Some unusual circumstances would have to be present before we would consider such a person to be a management official for the purposes of Title II.

If you have any further questions regarding Title II or the regulations implementing Title II, please call me.

1 I am assuming for the purposes of this opinion that *** and the savings and loan association are located in the same city, town, or village. Go back to Text

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