frauded or attempted to defraud an insured bank by other means (e.g., borrowing on the strength of stolen or forged collateral). The file contains the names and a summary of the circumstances where an individual has been the subject of reported irregularities or fraud against a bank. In the instances where a name check and identification record are provided by the Federal Bureau of Investigation, any acts of dishonesty or breach of trust are recorded in the reference card files; the actual reports are placed in other permanent files of the Corporation.

(2) Under what statutory and administrative authority was each data bank established and for what purpose? Please supply copies of pertinent federal statutes, regulations and memoranda on which this authority is based and by which it is implemented.

The reference card files are not considered a "data bank."

Section 7(j) of the FDI Act requires bank officials to report changes in "control" of banks and certain loans made on the security of bank stock (Section 7(j) file). Sections 5 and 6 of the FDI Act require a determination of the general character of the management of a proposed insured bank; Section 8(a) requires this Corporation to take appropriate action to protect an insured bank against the unsafe and unsound practices which may be engaged in by the management of a bank; and, Section 8(e) requires the Corporation to take appropriate removal steps against bank officials if they have been involved in certain acts of personal dishonesty. Section 19 of the FDI Act prohibits any person convicted of a crime involving dishonesty or a breach of trust from serving as a director, officer or employee of an insured bank unless approved by the Corporation (Section 8 and 19 file).

(3) Are Federal Deposit Insurance Corporation controls, guidelines, or advice required by or offered to (a) federal or (b) state officials and private individuals who either administer or who utilize this data-gathering program? Please supply copies of pertinent rules or advisory documents as issued by federal and state agencies.

No Federal official outside of this Corporation, no State official or private individual has access to either the Section 7(j) or the Section 8 and 19 reference card files, nor is either of these files administered by anyone outside of this Corporation. Any inquiry by other Federal or State financial institution supervisors is answered on a verbal basis with only limited factual information disclosed; refer to response at question 6.

The Corporation does not require or suggest controls, guidelines or give advice to the other financial institution supervisors on the use of the information. Private individuals do not have access to the reference card files nor is the information therein disclosed to them.

(4) For each category and each conglomerate of data, indicate its present state of computerization or other mechanization for access and retrieval as well as for evaluation and analysis.

Both the Section 7(j) and the Section 8 and 19 files are on manually indexed file cards and we have no present intention of computerizing or using any mechanical process for access, retrieval, evaluation or analysis of the data contained therein.

(5) Describe plans for further computerization or mechanization in cach program.

As stated in response to question 4, we presently have no plans for computerization or mechanization of these files.

(6) In what instances would each system be utilized? By what officials and by what agencies?

As stated in response to questions 4 and 5, we presently have no plans for computerization or mechanization of these files.

The reference card files provide the source for the Corporation and, upon inquiry, other Federal and State financial institution supervisory authorities to associate or connect quickly an individual or business entity to a bank and to locate the correspondence, examination reports and other files relating thereto. (7) For each new data storage and processing program, please describe: (a) the advantages; and (b) the extent to which it permits correlating, common storage and multi-faceted analysis of data on a scale not hitherto available.

As stated in response to questions 4, 5 and 6, we presently have no plans for computerization or mechanization of these files.

(8) What specific subject areas concerning an individual's background, personal life, personality and habits are noted in each data program?

The Section 7(j) and Section 8 and 19 files do not contain material on individuals regarding any of the above-noted subject areas except to the extent that

reported acts or convictions involving dishonesty or breach of trust is background information.

(9) Has the Federal Deposit Insurance Corporation and its component agencies developed comprehensive guidelines governing maintenance of any or all the various data systems, access to them, review and disclosure of material in them, and distribution of data to other agencies? If so, please supply copies.

The Corporation maintains and reviews the reference card files and no distribution is made of the information thereon nor are others allowed access thereto. As stated in response to question 3, any inquiry by other Federal or State financial institution supervisors is answered on a verbal basis with only limited factual information disclosed.

(10-A) Is the subject individual or his representative notified of the fact that he is in the data bank?

(B) Is he allowed to review the data on record about him; to supplement his file; or to explain or rebut inaccurate material? Please describe the precise limitations on such rights for each restriction.

(A) The Section 7(j) and Section 8 and 19 administrative reference card files are not considered data banks and the individuals or their representatives are not informed they are included in the files.

(B) The Section 7(j) file is constructed from information submitted by banks and individuals (or their representatives) involved in the transactions and is considered to be accurate and not in need of review, rebuttal or correction.

The Section 8 and 19 file is a summarization of a reported irregularity or fraudulent act and is updated with the eventual disposition of the charges. The material is deemed accurate and not subject to rebuttal, review or correction unless by due process of law.

(11) What aspects of the recorded data are available to other persons? Who, specifically? For what purpose? By what authority?

Access to the Section 7(j) and the Section 8 and 19 file is limited to Corporation personnel. As stated in answer to questions 3, 6 and 9, the reference card files provide the source for the Corporation and, upon inquiry, other Federal and State financial institution supervisory authorities to associate or connect quickly an individual or business entity to a bank and to locate the correspondence, examination reports and other files relating thereto.

(12) Is a record maintained of each inspection or use of the individual's record? No record of an inspection or the use of an individual reference card is maintained, since neither file is inspected by anyone outside this Corporation.

(13) For each data bank, please indicate how the information is collected, whether it is solicited from the individual, from third persons, or from existing records.

The Section 7(j) file is not considered to be a data bank, in that no information on the named individual's background, personal life, personality or habits is contained in the card file. The information in this file, as described previously in answer to question 1, is reported by the banks or individuals involved.

The Section 8 and 19 file is not considered a data bank. It does not include information on an individual's personal life, personality or habits, and is originated from facts compiled by bank examiners or as furnished by bank officials and from Federal Bureau of Investigation name checks and identification records and updated if a Justice Department investigation is conducted. Any background information in the files is described in answer to question 8.

(14) What officials in your agency are responsible for determining the accuracy of information in the data bank? What provisions are made, procedurally, for deleting information found to be inaccurate or inappropriate, either on the initiative of the agency or on motion of the individual?

The section head analyzing the information for reduction to card format is responsible for a correct recording of the information.

The Section 8 and 19 file is updated from Justice Department investigative reports, from court proceedings and from public files.

(15) What other agencies have access to information or use of information in each data bank?

No other agency has physical access to the information in our reference card files. As noted in response to questions 3, 6, 9 and 11, the reference card files provide the source for the Corporation and, upon inquiry, other Federal and State financial institution supervisory authorities to associate or connect quickly an individual or business entity to a bank and to locate the correspondence, examination reports and other files relating thereto.

1

The type of information contained in the Section 7(j) file and content thereof, in part, is known to the Board of Governors of the Federal Reserve System, and the Comptroller of the Currency. Section 7(j) (5) of the FDI Act requires each of these Federal bank supervisory agencies to report to this Corporation certain facts surrounding the change of "control" of the banks under their supervision. This interchange of information is generally in the form of copies of the documents submitted by banks, subject individuals, or their representatives.

The type of information contained in the Section 8 and 19 file is known to the Department of Justice and the Federal Bureau of Investigation. The preponderance of information contained in the Section 8 and 19 file is summarized from letter-reports to the United States Attorney and Justice Department investigations of reported criminal acts which have occurred in insured banks.

(16) What states and Federal agencies may utilize the data in your computerized files by coding, interfacing and other devices relating to their own computers?

The reference card files are non-computerized and therefore cannot be utilized by coding, interfacing or other devices.

(17) What security devices and procedures are utilized to prevent: (a) unauthorized access to the data file; and (b) improper use of the information?

The reference card files are maintained under ordinary file cabinet lock.

(18) What formal or informal arrangement does the Federal Deposit Insurance Corporation have with congressional committees for the authorizing and reviewing of new data banks and the clearance of new electronic or mechanized recordmanagement techniques?

None. The use of data banks is not contemplated nor do we presently plan for computerization or mechanization of the reference files.

(19-A) Have any data programs or the development of other comprehensive records systems been discussed before other congressional committees by Federal Deposit Insurance Corporation representatives?

(B) Have any been specifically approved by Congress or congressional committees?

(C) If so, would you please supply any available testimony, or citations to such hearings?

(A), (B), and (C) The development and establishment of data programs or other comprehensive records systems have not been specifically discussed before congressional committees by representatives of the Corporation. The need for and the use of the information generated in response to the requirements of Sections 7(j) 8, and 19 of the FDI Act has been discussed by representatives of the Corporation before congressional committees. Copies of testimony are attached as follows:

Statement of Neil G. Greensides, Chief, Division of Examination, Federal Deposit Insurance Corporation, to the Legal and Monetary Affairs Subcommittee of the House Committee on Government Operations on October 15, 1963.

Statement of Joseph W. Barr, Chairman, Federal Deposit Insurance Corporation, before the Senate Permanent Subcommittee on Investigations on March 9, 1965.

Statement of K. A. Randall, Chairman, Federal Deposit Insurance Corporation, before the Subcommittee of Legal and Monetary Affairs, Government Operations Committee on February 7, 1968.

Public Statement of Frank Wille, Chairman, Federal Deposit Insurance Corporation, prepared for a closed session of the Committee on Banking and Currency, House of Representatives on March 8, 1971.

Statement by Frank Wille, Chairman, Federal Deposit Insurance Corporation, before the Committee on Banking and Currency, House of Representatives on April 20, 1971.

Attachments

The following attachments which accompanied FDIC's response have been included in this report; all others have been omitted for reasons of economy.

1. Financial Report.

2. Changes in Bank Ownership and Loans Secured by Bank Stock.

SUPPORTING SCHEDULES

Schedules set forth on this page must agree in total with the appropriate item contained in the Financial Statement on Page 1 of this report.

The type of information contained in the Section 7(j) file and content thereof, in part, is known to the Board of Governors of the Federal Reserve System, and the Comptroller of the Currency. Section 7(j)(5) of the FDI Act requires each of these Federal bank supervisory agencies to report to this Corporation certain facts surrounding the change of "control" of the banks under their supervision. This interchange of information is generally in the form of copies of the documents submitted by banks, subject individuals, or their representatives.

The type of information contained in the Section 8 and 19 file is known to the Department of Justice and the Federal Bureau of Investigation. The preponderance of information contained in the Section 8 and 19 file is summarized from letter-reports to the United States Attorney and Justice Department investigations of reported criminal acts which have occurred in insured banks.

(16) What states and Federal agencies may utilize the data in your computerized files by coding, interfacing and other devices relating to their own computers?

The reference card files are non-computerized and therefore cannot be utilized by coding, interfacing or other devices.

(17) What security devices and procedures are utilized to prevent: (a) unauthorized access to the data file; and (b) improper use of the information?

The reference card files are maintained under ordinary file cabinet lock.

(18) What formal or informal arrangement does the Federal Deposit Insurance Corporation have with congressional committees for the authorizing and reviewing of new data banks and the clearance of new electronic or mechanized recordmanagement techniques?

None. The use of data banks is not contemplated nor do we presently plan for computerization or mechanization of the reference files.

(19-A) Have any data programs or the development of other comprehensive records systems been discussed before other congressional committees by Federal Deposit Insurance Corporation representatives?

(B) Have any been specifically approved by Congress or congressional committees?

(C) If so, would you please supply any available testimony, or citations to such hearings?

(A), (B), and (C) The development and establishment of data programs or other comprehensive records systems have not been specifically discussed before congressional committees by representatives of the Corporation. The need for and the use of the information generated in response to the requirements of Sections 7(j) 8, and 19 of the FDI Act has been discussed by representatives of the Corporation before congressional committees. Copies of testimony are attached as follows:

Statement of Neil G. Greensides, Chief, Division of Examination, Federal Deposit Insurance Corporation, to the Legal and Monetary Affairs Subcommittee of the House Committee on Government Operations on October 15, 1963.

Statement of Joseph W. Barr, Chairman, Federal Deposit Insurance Corporation, before the Senate Permanent Subcommittee on Investigations on March 9, 1965.

Statement of K. A. Randall, Chairman, Federal Deposit Insurance Corporation, before the Subcommittee of Legal and Monetary Affairs, Government Operations Committee on February 7, 1968.

Public Statement of Frank Wille, Chairman, Federal Deposit Insurance Corporation, prepared for a closed session of the Committee on Banking and Currency, House of Representatives on March 8, 1971.

Statement by Frank Wille, Chairman, Federal Deposit Insurance Corporation, before the Committee on Banking and Currency, House of Representatives on April 20, 1971.

Attachments

The following attachments which accompanied FDIC's response have been included in this report; all others have been omitted for reasons of economy.

1. Financial Report.

2. Changes in Bank Ownership and Loans Secured by Bank Stock.