Background Investigations Booklet

COMPTROLLER’S LICENSING MANUAL

BACKGROUND
INVESTIGATIONS

DECEMBER 2021

Contents
Introduction ............................................................................................................................. 1
Key Policies .............................................................................................................................. 3
Charters and Federal Branches or Agencies ......................................................................... 3
Withdrawal Requests ............................................................................................................ 4
Convicted Individuals ........................................................................................................... 4
Privacy .................................................................................................................................. 4
Application Process................................................................................................................. 6
Specific Procedures ................................................................................................................. 7
Standard Background Checks ............................................................................................... 7
Waivers ................................................................................................................................. 7
Optional Background Investigations .................................................................................... 7
Foreign Nationals Background Investigations ...................................................................... 8
International Information-Sharing Agreements .................................................................... 8
Fingerprint Checks and IRS Tax Checks ............................................................................. 8
Change in Bank Control Requirements ................................................................................ 9
Application Procedures ........................................................................................................ 10
Filers ................................................................................................................................... 10
Banks Selecting Senior Executive Officers Before Submitting Filings ............................. 11
Glossary ................................................................................................................................. 12
References .............................................................................................................................. 14
Table of Updates Since Publication ..................................................................................... 15

Comptroller’s Licensing Manual

i

Background Investigations

Introduction
This booklet of the Comptroller’s Licensing Manual provides guidance concerning the
licensing procedures of the Office of the Comptroller of the Currency (OCC) relating to
conducting background investigations. The requirements referred to in this guidance
document reflect provisions in existing statutes and regulations. The relevant statutes and
regulations are listed at the end of this booklet or referenced as applicable throughout the
document. 1
This booklet summarizes the OCC’s policies and procedures for investigating the
backgrounds of individuals, companies, organizations, and other filers. For purposes of this
booklet, a filer is any individual, group of individuals, or company or other organization
involved in submitting to the OCC an application or notice seeking to enter the federal
banking system by acquiring control or seeking to influence a national bank, federal savings
association, or federal branch or agency of a foreign bank (collectively, banks). When it is
necessary to distinguish among them, national banks, federal savings associations, and
federal branches and agencies of foreign banks are referred to separately.
Generally, the OCC investigates the character, competence, experience, and integrity of those
submitting filings related to changes in bank control; de novo charters; changes in directors
and senior executive officers; conversions of credit unions, state banks, and other institutions
to federal charters; and establishment of federal branches or agencies by foreign banks.
In conducting background investigations, the OCC requires filers to submit certain
information and documents, generally including fingerprints and a signed “Interagency
Biographical and Financial Report,” as discussed in the “Procedures” section of this booklet.
Specifically, this booklet includes
•
•
•
•
•

guidance on key OCC policies.
a summary of the processes the OCC uses to conduct background investigations.
specific filing requirements.
a “Glossary” section of key terms.
a “References” section with applicable laws and regulations.

The “Specific Procedures” section of this booklet explains how the OCC performs
background investigations on U.S. citizens, foreign nationals, companies, and other filers.
OCC background checks include

This booklet also may include procedures that banks must follow in connection with the filing of applications
and notices with the OCC. Such procedures are not substantive rules that establish decision criteria. Rather, they
are steps a bank must take to allow the OCC to assess whether a bank has met the substantive requirements for
the application or notice in existing statutes and regulations. Consistent with the Administrative Procedure Act,
the OCC may issue guidance concerning licensing that contains binding procedural steps a bank must take to
allow the OCC to assess a bank’s application or notice. See 5 USC 553(b)(A).

1

Comptroller’s Licensing Manual

1

Background Investigations

•
•
•

standard background checks.
optional background checks.
foreign national background checks.

For information on the types of filings for which the OCC routinely performs background
investigations, refer to the following booklets of the Comptroller’s Licensing Manual:
“Change in Bank Control,” “Charters,” “Changes in Directors and Senior Executive
Officers,” “Conversions to Federal Charter,” “Federal Branches and Agencies,” and
“National Bank Director Waivers.”

Comptroller’s Licensing Manual

2

Background Investigations

Key Policies
In the normal course of business, changes occur in the composition of a bank’s board of
directors and senior executive officers. Generally, the OCC is not directly involved in the
bank’s selection of directors and senior executive officers. The OCC considers the
qualifications and background of proposed acquirers, directors, and senior executive officers.
The OCC may conduct investigations when reviewing applications or notices filed pursuant
to law, regulation, or any supervisory action initiated by the OCC. Federal laws and
regulations provide that, when reviewing certain filings, the OCC must consider a filer’s
experience, competence, and integrity. The OCC may also consider character, financial
ability, or willingness to direct or lead a bank’s business in a safe, sound, and legal manner.
In reviewing a filing, the OCC may perform background investigations on organizers, senior
executive officers, senior officers, directors, principal bank shareholders, and general
managers of federal branches or agencies. The OCC performs background checks on filers
seeking to control a bank.
The OCC closely examines the backgrounds of filers whose previous experience contributed
to a failed or problem financial institution or when other facts may raise questions about
competence, character, or personal or fiduciary integrity.
The OCC reviews and verifies the information in each filing. Any material misrepresentation
or omission of fact may result in the OCC’s disapproval of a filing. The OCC may
disapprove a filing and take action against any filer, including referral for criminal action, if
the agency determines that the materials submitted were misrepresented or omitted in an
attempt to mislead the OCC. An approval can be rescinded if the OCC subsequently learns
that the filing included material misrepresentations or omissions.
If the background investigation provides adverse information on a filer, the OCC—to the
extent permissible—notifies and allows the filer to complete, correct, or challenge the
information before the OCC makes a decision.

Charters and Federal Branches or Agencies
The OCC has developed guidance to help banks review and select senior executive officers,
described in the “Banks Selecting Senior Executive Officers Before Submitting Filings”
section of this booklet. Bank directors and organizers of a de novo bank may use this
publication as a guide for obtaining relevant work experience and background information
about proposed senior executives and management officials.
The chief executive officer (CEO) and all senior executive officer positions (as defined in the
“Glossary” section of this booklet) in a new bank charter or federal branch or agency must
receive an OCC nonobjection decision before commencing employment. Adverse
information about the proposed CEO could reflect negatively on the filing and may cause the
OCC to act unfavorably.

Comptroller’s Licensing Manual

3

Background Investigations

The organizers of a de novo bank should name the proposed CEO in the charter filing. Filers
may, however, request confidential treatment of the name of the CEO or senior executive
officers during the charter application review phase.
If a proposed officer requests that his or her present employer(s) not be contacted, the OCC
determines whether the information is needed and whether it is available through alternative
sources. The OCC notifies the proposed officer in advance if there is a need to contact the
current employer(s).

Withdrawal Requests
At any time during the application process, but before a final decision, a filer may submit a
written request formally withdrawing from the background investigation process.

Convicted Individuals
12 USC 1829 prohibits any individual who has been convicted of a crime involving
dishonesty, breach of trust, or money laundering, or who has entered into a pretrial diversion
or similar program in connection with prosecution of such offense(s), from owning,
controlling, participating in the affairs of, or becoming an affiliated party of an insured
depository institution without the prior written consent of the Federal Deposit Insurance
Corporation (FDIC). Additionally, the law provides that if a person is convicted of certain
enumerated offenses, the FDIC cannot consent to an application filed by such person for a
period of 10 years.
If a bank proposes to seek the FDIC’s prior written consent under 12 USC 1829, the bank
must file on the individual’s behalf 2 a written waiver request with the FDIC. If the bank
obtains consent from the FDIC with respect to the individual, the OCC will consider the
FDIC’s decision and the bank’s recommendations during its background investigation. The
OCC retains the authority, however, to object consistent with existing policy and applicable
laws and regulations.

Privacy
The OCC maintains the privacy of personal information and the security of its computer
systems. With respect to the receipt, use, and disclosure of personal information, the OCC
makes every effort to comply with applicable federal law, including the Privacy Act, the
Paperwork Reduction Act, and the Freedom of Information Act.
The OCC’s Licensing Division shares private information with other government agencies
only to the extent required to perform background investigations. Moreover, the OCC does
not collect or create individual profiles with the information provided and does not share
information with any nongovernment entity.
2

The FDIC may permit the individual, rather than the bank, to request the FDIC’s consent.

Comptroller’s Licensing Manual

4

Background Investigations

The OCC will
•
•
•

protect personal information and data in accordance with the Privacy Act.
protect sensitive information from disclosure to unauthorized individuals or groups.
acquire and use sensitive information only in accordance with the performance of official
duties.

Comptroller’s Licensing Manual

5

Background Investigations

Application Process
Generally, the OCC conducts background investigations on certain filers when reviewing
certain applications or notices, including the following:
•
•
•
•
•
•

New bank charters.
Conversions of nonfederal charters to a federal charter.
Citizenship or residency waivers for directors of national banks pursuant to 12 USC 72.
Changes in bank control.
Establishing federal branches and agencies by foreign banks.
Changes in directors or senior executive officers for banks subject to the filing
requirements of 12 USC 1831i and 12 CFR 5.51.

When applicable, filers should include certain specific information and forms to authorize the
OCC to conduct background investigations and should provide enough information about the
filers for the OCC to conduct a background investigation and make a decision. Such
information includes
•
•

signed consent forms authorizing third parties such as credit bureaus, law enforcement
agencies, and the Internal Revenue Service (IRS), to provide information, including
financial, credit, tax, immigration, and criminal investigative information, to the OCC.
a signed “Interagency Biographical and Financial Report.”

These documents are generally filed as attachments to other filings submitted to the OCC. In
addition, and when applicable, the OCC requires filers to be fingerprinted.
If the OCC is ready to act on a filing for which it has not received responses on all of its
background check inquiries and there is no reason to believe that any detrimental information
is forthcoming from the unanswered inquiries, the OCC may insert the following
qualification into the decision letter:
“We have not completed our background checks for some of the above individuals. These
individuals may assume their prospective duties, but their continued service is dependent on
satisfactory completion of the background investigation process.”
When the OCC completes a background investigation and issues an approval, nonobjection,
or notice of intent not to disapprove, but the related filing remains undecided or a decided
filing does not result in a consummated transaction after an extended period, the results of the
background checks may become outdated. This may happen with an application for a new
charter because the OCC allows organizers of the proposed bank 18 months from the OCC’s
preliminary conditional approval to open the bank. The OCC may update, when appropriate,
a background investigation if more than one year lapses between the OCC’s decision and the
consummation of the related transaction.

Comptroller’s Licensing Manual

6

Background Investigations

Specific Procedures
Standard Background Checks
The OCC performs standard background checks through the following:
•
•
•
•
•
•

•

•

Credit bureaus.
Federal Bureau of Investigation.
Federal and state regulators of banks or other entities.
IRS.
U.S. Department of Homeland Security.
Publicly available online resources. The OCC uses online services that compile legal,
news, and business information. Inconsistencies between the submitted “Interagency
Biographical and Financial Report” and the online resources available to the OCC may
require additional information, clarification, or an explanation and may delay the review
and processing of the filing.
FinCEN, which is a bureau of the U.S. Department of the Treasury that administers and
enforces the provisions of the Bank Secrecy Act (BSA). In this capacity, it collects and
maintains information filed by financial institutions under the BSA reporting obligations.
This includes Suspicious Activity Reports and Currency Transaction Reports.
Enforcement Action Report System (EARS), which is an OCC database that contains
historical criminal referral information and information on individuals who have been
subject to administrative enforcement actions. EARS maintains financial institution
regulatory agencies’ records when the filers have been involved with financial
institutions under another agency’s jurisdiction (for example, the FDIC, the Board of
Governors of the Federal Reserve System, or the National Credit Union Administration).

Waivers
The OCC may waive any standard background investigation if the check would be redundant
or would not serve the OCC’s purposes for background investigations. The OCC may waive
or perform a limited background check for a filer who serves as a director or senior executive
officer of an “eligible” depository institution. 3 OCC staff documents all authorized
background check waivers, including the rationale for determinations made regarding
waivers, whether granted or denied.

Optional Background Investigations
The OCC pursues additional background checks when deemed appropriate. Such checks may
include requests for background information from the following:
•
3

U.S. Commodity Futures Trading Commission
An “eligible” depository institution is defined in 12 CFR 5.3.

Comptroller’s Licensing Manual

7

Background Investigations

•
•
•
•
•

State and local law enforcement agencies
Federal Trade Commission
Local courts
National Association of Securities Dealers
U.S. Securities and Exchange Commission

Foreign Nationals Background Investigations
The OCC performs additional background investigations on foreign nationals (non-U.S.
citizens). The OCC determines the nature and scope of the proposed position of an affected
filer and decides, on a case-by-case basis, the extent of the information required to reach a
determination on the appointment. The OCC anticipates that the bank will conduct an
independent review and engage in appropriate due diligence activities for foreign nationals
seeking entry into the federal banking system.
These standard foreign national background checks are performed to obtain information
similar to that compiled on U.S. citizens and are conducted in cooperation with
•
•
•

the OCC’s International Bank Supervision Division.
the U.S. Department of State.
appropriate foreign government regulatory authorities. 4

International Information-Sharing Agreements
The OCC maintains information-sharing agreements with a variety of countries and
applicable foreign government financial authorities. The nature and scope of these
agreements reflect cooperation with the appropriate foreign government financial regulatory
authorities to ensure a safe and sound banking system. Information shared may include
information with respect to cross-border bank leadership appointments within the federal
banking system.

Fingerprint Checks and IRS Tax Checks
Most OCC background investigations include fingerprint checks and “IRS Tax Check
Authorization” forms submitted by filers.
When required, filers must be fingerprinted at an authorized site. The OCC uses an electronic
fingerprinting service, Fieldprint, to fingerprint filers residing in the United States, including
Puerto Rico and the U.S. Virgin Islands. Filers not residing in the United States should
contact the OCC’s Licensing Division for information on the fingerprint process.
There are special background procedures for Japanese nationals. The OCC and the Banking Inspection
Department at the Ministry of Finance of Japan have agreed to certain procedures for background information
checks (or police certificates) on Japanese nationals entering the U.S. banking market. They must obtain their
own record from Japan’s National Policy Agency.

4

Comptroller’s Licensing Manual

8

Background Investigations

Filers undergoing investigation should complete the “IRS Tax Check Authorization” form
when required. To the extent applicable, foreign nationals, as U.S. tax filers with U.S. tax
identification numbers, are also required to submit the “IRS Tax Check Authorization” form.

Change in Bank Control Requirements
The Change in Bank Control Act requires the OCC and each of the other federal banking
agencies to prepare and retain records of reports of any investigations that that agency
conducts.
Certain entities, such as companies, partnerships, trusts, or other corporate structures, may
seek to control a bank and may be required to file the appropriate prior notice with the OCC
under the Change in Bank Control Act. As appropriate, the OCC conducts background
investigations on these entities to the same degree as if they were individuals seeking to
control a bank. These entities should file the “Corporate Background and Financial Report”
(which is similar to the “Interagency Biographical and Financial Report” for individuals)
along with appropriate consent forms. Representatives of corporate filers undergoing
background investigations should consult with the appropriate OCC licensing office
regarding required filing forms.

Comptroller’s Licensing Manual

9

Background Investigations

Application Procedures
Filers
1. If the filing may involve the OCC performing a background investigation, the filer should
contact the appropriate OCC licensing office for guidance on which forms should be
completed and submitted with the filing. If a joint financial statement is provided, both
parties must sign and date.
2. As applicable, the filer completes and submits the “Interagency Biographical and
Financial Report.” If a field in the report does not apply, enter “not applicable” or “NA.”
Attach any supporting documentation that may be required to fully respond to the
information requested. The report must be signed and dated.
3. If the subject of the background investigation is a corporation, partnership, limited
liability company, trust, or other corporate entity, an authorized individual should
complete and submit the “Corporate Background and Financial Report.” If a field in the
report does not apply, enter “not applicable” or “NA.” Attach supporting documentation
for information required to fully respond to the information requested. The report must be
signed and dated.
4. The filer should complete and submit the “IRS Tax Check Authorization” form for the
individual or company under investigation. This form authorizes the IRS to release
information to the OCC. The form must be signed in ink and dated by hand. Complete the
information as shown. If the OCC application number or the related filing is not
available, the OCC will fill in that field when received.
5. The filer should complete and submit a signed “Authorization for Release of
Information.” This release authorizes the OCC to make background investigation
inquiries to third parties. The release must be signed and dated.
6. As applicable, the OCC will provide the filer with information on the OCC’s process for
completing a fingerprint check.
7. The filer should respond to any requests from the OCC for additional information or
clarification on the background investigation information. The OCC, to the extent
permissible, notifies the filer if the OCC finds any adverse information during the
background investigation process. The filer may correct any information previously
submitted or challenge any of the background investigation results to the extent
applicable.

Comptroller’s Licensing Manual

10

Background Investigations

Banks Selecting Senior Executive Officers Before Submitting
Filings
The OCC developed the guidelines below to assist bank directors and proposed directors of
de novo banks serving as selecting officials in their review and selection of proposed senior
executives (candidates).
Before submitting filings to the OCC, selecting bank officials should do the following:
1. Require each candidate to submit the information requested in the “Interagency
Biographical and Financial Report,” if necessary, to the board of directors for review.
2. Perform a credit check of the candidate, identifying the credit bureaus or other sources
used.
3. Contact the candidate’s references and summarize by name the comments received.
4. Contact the candidate’s previous employers and summarize by name and employer the
nature of comments received.
5. Prepare or obtain a summary of the candidate’s duties in previous positions and discuss
how that experience relates to the job description under consideration. Discuss relevant
information, such as the following:
•
•
•
•
•
•

Size and type of loan portfolio supervised, record of loan portfolio performance, and
amount of loan approval authority.
Personnel administration record, including the number and type of employees
supervised and the candidate’s performance record.
Policy development and implementation experience.
Asset/liability management strategies employed.
Investment strategies employed.
Internal control, audit, and management information systems developed.

6. Establish all terms of employment, including proposed salary, methods used to determine
the amount of salary, employment contract, and other compensation.
7. Describe the major duties and responsibilities of the position.
8. Assess the materials required for submission to the OCC and develop the board’s written
evaluation of the proposed senior executives.

Comptroller’s Licensing Manual

11

Background Investigations

Glossary
Director: A member of a bank’s board of directors. The term does not refer to a director of a
foreign bank operating a federal branch or an advisory director who does not have the
authority to vote on matters before the board and who solely provides general policy advice
to the board or any committee.
Executive officer: An officer of a bank who participates in or has the authority to participate
in (other than in the capacity of a director) the bank’s major policymaking functions, whether
or not the individual has an official title, is designated as an assistant, or serves without
compensation. Executive officer positions normally include the board chairman, president,
every vice president, cashier, secretary, treasurer, chief investment officer, and any other
individual the OCC identifies as having significant influence over major policymaking
decisions. (See senior executive officers.)
Federal agency: An office or place of business, licensed by the OCC and operated by a
foreign banking organization in any state, that may engage in the business of banking—
including maintaining credit balances, cashing checks, and lending money—but may not
accept deposits or exercise fiduciary powers.
Federal branch: An office or place of business, licensed by the OCC and operated by a
foreign banking organization in any state, that may engage in the business of banking,
including accepting certain deposits.
Federal savings association: A federal savings association or federal savings bank chartered
pursuant to section 5 of the Home Owners’ Loan Act, 12 USC 1464.
Foreign national: An individual who is not a U.S. citizen.
National bank: An insured or uninsured national banking association.
Organizers: The individuals who file and sign a new charter application. The OCC may
approve additional organizers and organizing directors throughout the charter process,
subject to review and nonobjection.
Principal shareholder: An individual or entity, other than an insured bank, who directly or
indirectly, or acting through or in concert with one or more individuals, owns, controls, or
has the power to vote more than 10 percent of any class of voting securities of the proposed
bank, as defined in 12 USC 375b and implemented by Regulation O (12 CFR 215.2(m)).
Senior executive officers: The President, Chief Executive Officer, Chief Operating Officer,
Chief Financial Officer, Chief Lending Officer, Chief Investment Officer, and Chief Risk
Officer; or any other individual the OCC identifies in writing who exercises significant
influence over, or participates in, major policy making decisions of the bank without regard
to title, salary, or compensation. The term also includes employees of entities retained by a
national bank, federal savings association, or federal branch to perform such functions in lieu
Comptroller’s Licensing Manual

12

Background Investigations

of directly hiring the individuals and, for a federal branch operated by a foreign bank, the
individual functioning as the chief managing official of the federal branch.

Comptroller’s Licensing Manual

13

Background Investigations

References
The following references apply to both national banks and federal savings associations,
except as otherwise noted.
Background Investigations
Regulation

12 CFR 5.7, and 28 CFR 16.34 and 50.12

Change in Bank Control
Law
Regulation

12 USC 1817(j)
12 CFR 5.50

Changes in Directors and Senior Executive Officers
Law
Regulation

12 USC 183li
12 CFR 5.51

Civil Money Penalties
Law

12 USC 1818

Convicted Individuals
Law

12 USC 1829

Crimes and Penalties
Law

18 USC 1001

Federal Branches and Agencies
Law
Regulation

12 USC 3101–3111
12 CFR 28

Formation of a National Bank or Federal Savings Association
Law for national banks
12 USC 21
Law for federal savings associations
12 USC 1464
Regulation
12 CFR 5.20

Comptroller’s Licensing Manual

14

Background Investigations

Table of Updates Since Publication
Date of Last Publication: June 2019
Reason

Affected pages

Citation/Definition changes per Part 5 updates

6, 11

Comptroller’s Licensing Manual

15

Background Investigations