Summary: Testimony was given concerning the National Consumer Cooperative Bank, which has recently converted from a mixed-ownership Government corporation to a congressionally chartered financial institution controlled by its shareholders. In addition, the bank no longer receives Federal appropriations, and its stock held by the Treasury has been converted to notes which are due between 1991 and 2020. The bank is presently in transition, having reorganized, unified its lending process, and closed three of its regional offices. GAO believes that these actions should improve the delivery of financial assistance to cooperatives, increase administrative effectiveness, and reduce operating costs. However, reductions in regional office staff and offices will limit the bank's ability to develop cooperatives nationwide. GAO has found that a mandated self-help office has been eliminated, decreasing nonloan activities such as technical assistance, outreach, and training. GAO also found that the bank has not fully complied with its contracting policies and procedures. However, a recently adopted procedures manual, if followed, should correct many of the deficiencies which GAO identified. GAO found no evidence to support allegations made by former bank employees that the bank did not consistently apply its personnel policies. GAO did find that the bank board's report to the shareholders contained inaccurate, incomplete, and misleading information.
