To All Depository Institutions and Others Concerned in the Second Federal Reserve District:
In a Supervisory Letter, the Federal Reserve Board issues a reminder to state member banks and bank holding companies of the limitations on indemnification imposed by section 18(k) of the Federal Deposit Insurance Act, which was added by the Crime Control Act of 1990, and the related regulations issued by the Federal Deposit Insurance Corporation. The purposes of the law and regulations are to preserve the deterrent effects of administrative enforcement actions by ensuring that individuals subject to final enforcement actions bear the costs of any judgments, fines, and associated legal expenses, and to safeguard the assets of financial institutions.
Questions on this matter may be directed, at this Bank, to James Keogh, Examining Officer, Risk Management Function.
