Summary: The proposed Safe Banking Act of 1977, H.R. 9086 (95th Congress), is responsive to previous GAO recommendations of legislative changes that could be made to improve the efficiency and effectiveness of the Federal bank regulatory agencies' operations. The general thrust of the proposed legislation in the area of supervisory authority over financial institutions, which would include the authority to remove bank officers for gross negligence and to levy civil penalties for certain violations, could enhance the ability of supervisory agencies to deal with bank problems. Provisions in the proposed legislation for a hearing process for removal of an officer or director of a bank based on an indictment or conviction for a felony would correct the deficiencies in existing procedures and will allow the agencies use of this authority when appropriate. Providing the Federal Deposit Insurance Corporation with the power to approve or disapprove the establishment and operation of branches in foreign countries by State nonmember insured banks is consistent with existing law with respect to other banks. Provisions which would establish the framework for an effective mechanism for insuring interagency cooperation and coordination will help to avoid duplication of effort and afford equal treatment to all classes of banks.
