FDIC Offers Whistleblower Process
Since enactment of the Sarbanes-Oxley Act of 2002, many banks have focused more than ever on sound corporate governance. Banks with publicly traded securities are required to establish procedures for bank employees to anonymously report to the audit committee questionable accounting, internal control and auditing matters. Although banks without publicly traded securities are not required by the Sarbanes-Oxley Act to establish such confidential "whistleblower" reporting mechanisms, the federal banking agencies’ guidance on the topic indicates that banks should consider implementing them to the extent feasible.
Some banks have used outside counsel, certified public accounting firms, or other third parties as the mechanism for employees to report questionable bank practices. In spite of the existence of procedures that ensure anonymity, some employees may be reluctant to use them. In such cases, these employees may consider contacting the Federal Deposit Insurance Corp.’s Office of the Ombudsman.
The FDIC Office of the Ombudsman is an independent, neutral resource that can provide bank employees with options for resolving concerns about bank matters, while guaranteeing confidentiality to the extent allowable by law. If bank employees confidentially discuss concerns related to their institution's accounting, internal control and auditing practices with the Ombudsman, those anonymous reports will be referred to the appropriate parties for review and possible investigation.
If you wish to discuss the Ombudsman’s role further, call the FDIC at (877) 275-3342 and select the alternative for representatives of financial institutions. Choose Option 3 on the telephone menu, or ask an information receptionist to transfer you to the FDIC Office of the Ombudsman for confidential assistance.