Title III of the Dodd-Frank Act sets forth provisions to address problems and concerns in the multiple agency financial regulatory system by transferring OTS's powers and authorities to FRB, FDIC, and OCC on July 21, 2011 (the "transfer date") and abolishing OTS. All OTS functions related to federal savings associations, all OTS rulemaking authority for federal and state savings associations,2 and the majority of OTS employees transferred to OCC; OTS's supervisory responsibility for state-chartered savings associations and OTS employees to support these responsibilities transferred to FDIC;3 and OTS's authority for consolidated supervision of savings and loan holding companies and their non-depository subsidiaries transferred to FRB. No OTS employees were required to be transferred to FRB.
Section 327(a) of Title III required FRB, FDIC, OCC, and OTS to jointly submit a plan within 180 days of enactment to Congress and the Inspectors General of FRB, FDIC, and Treasury detailing the steps necessary to implement the provisions of Sections 301 through 326. The Inspectors General and Congress received the Plan fulfilling this requirement on January 25, 2011.
Section 327(b) of Title III required that within 60 days of receiving the Plan, the Inspectors General of FRB, FDIC, and Treasury jointly provide a written report to FRB, FDIC, OCC, and OTS, with copies to Congress, that detailed whether the Plan conformed to the requisite provisions and include any additional recommendations for an orderly and effective process. The Inspectors General jointly issued that report, Review of the Joint Implementation Plan for the Transfer of Office of Thrift Supervision Functions, on March 28, 2011, fulfilling this requirement. Based on that review, we concluded that the Plan generally conformed to the relevant provisions of Title III. We noted, however, that the Plan did not address the prohibition in Title III against the involuntary separation or the involuntary reassignment of a transferred OTS employee outside the employee's locality pay area for 30 months (except under certain circumstances). In response, the agencies amended the Plan in April 2011.
Section 327(c) of Title III requires that, within 6 months of Congress receiving the report, the Inspectors General of FRB, FDIC, and Treasury must jointly provide a written report on the status of the implementation of the Plan to FRB, FDIC, and OCC, with a copy to Congress. Further, the Inspectors General of FRB, FDIC, and Treasury must jointly provide such a written report every 6 months thereafter until all aspects of the Plan have been implemented. The Inspectors General issued three reports on September 28, 2011, March 21, 2012, and September 26, 2012, respectively, under this requirement.
In the September 2011 report, we concluded that FRB, FDIC, OCC, and OTS had substantially implemented the actions in the Plan that were necessary to transfer OTS functions, employees, funds, and property to FRB, FDIC, and OCC, as required. However, we identified certain aspects of the Plan that were ongoing or were not yet required to be completed as provided in Title III of the Act. In the March 2012 report, we concluded that FRB, FDIC, OCC, and OTS implemented the actions in the Plan that were necessary to transfer OTS functions, employees, and funds to FRB, FDIC, and OCC, as appropriate. In this regard, all OTS property was transferred to FRB, FDIC, and OCC; and procedures and safeguards were in place at FDIC and OCC as outlined in the Plan to ensure that transferred employees are not unfairly disadvantaged. However, we identified certain items that were ongoing or were not yet required to be completed as provided in Title III of the Act related to (1) the procedures and safeguards in place to ensure that transferred employees are not unfairly disadvantaged, (2) the transfer of property, and (3) the collection of supervisory assessments by FRB. In the September 2012 report, we concluded that procedures and safeguards were in place as outlined in the Plan to ensure that transferred employees are not unfairly disadvantaged; and that the actions in the Plan that were necessary to transfer OTS property to OCC were implemented. However, as discussed below, we identified certain items related to additional certification for certain transferred OTS examiners and collection of supervisory assessments by FRB were still ongoing.
