Insider Activities - Comptroller's Handbook

GuidanceOffice of the Comptroller of the Currency (OCC)Identity Theft
Risk Management

The "Insider Activities" booklet is one of several booklets in the Comptroller's Handbook that will be published under the theme of corporate governance. This booklet provides guidance on how banks may legally and prudently engage in transactions with insiders and implement risk management processes that provide for the appropriate control and monitoring of insider activities. This booklet also provides guidance on how examiners will review and assess insider activities during the supervisory process.

A bank should engage in safe and sound business and personal transactions with its insiders, consistent with law and regulation. Transactions between a bank its insiders can address legitimate banking needs and serve the interests of both parties. The challenge is to separate legitimate insider financial relationships from those that are, or could become, abusive, imprudent, or preferential. Studies of bank failures have found that insider abuse, including excessive or poor quality loans made, and unjustified fees paid, to directors and officers, is often a contributing factor to the failure. Because of the significant risks that insider activities can pose, activities are subject to strict laws and ethical guidelines.

> Read entire regulation (log in required - registration is free)