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Testimony by Mariano J. Mier Permanent United States Senate Subcommittee on Investigations Page 13 of 27

July 25, 1985

Federal Savings Bank, had

survived the ordeal

untarnished. I, after all, had

been entrusted, just two months before, with the presidency of the Puerto Rico League of Savings Institutions, and had far greater responsibilities than those of my institution.

I now was custodian of the

trust, the welfare and

well-being not just for First

Federal Savings Bank, but for

the entire industry.

The scandal, which

was prominently displayed by

both the local and national

media, was unprecedented in

Puerto Rico's history. Until

that day the only precedents we

had were those of similar

violations found in a host of

financial institutions in the

mainland United States.

In my new position as

Testimony by Mariano J. Mier
Permanent United States Senate
Subcommittee on Investigations
Page 14 of 27
July 25, 1985

president of the Puerto Rico

League of Savings Institutions,

a post almost as new as my

initiation as a thrifter, for prior to December 1982 I had been a commercial banker for

almost all my professional

life, it was of paramount

importance to leave aside

competitive considerations and

address the problem from the

vantage point of how to stop

whatever erosion in the

people's confidence in our

industry had resulted from the

arrests.

On June 13th, after

chairing a board meeting of our

League, in a prepared statement

released to the local media, I

reaffirmed, as I had done

following the arrests of June

6th, our full cooperation with

the continuing federal

investigation and welcomed the

Testimony by Mariano J. Mier Permanent United States Senate Subcommittee on Investigations Page 15 of 27

July 25, 1985

opportunity to get rid of any

unscrupulous member of our

financial community found in

violation of the law and/or the

regulations.

At the same time, I

offered my fellow thrifters the

services of our own compliance

officer at First Federal

Savings Bank, who personally

headed an in-depth compliance

seminar for all member

institutions last June 22nd.

As I cannot be fully

conversant about the compliance

procedures that have been

followed or that are now being

followed by all the thrift

institutions on the island and since my participation in this industry is of recent vintage I beg that you allow me to share

with you the experiences that I

have had at First Federal

Savings Bank with matters of

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Testimony by Mariano J. Mier Permanent United States Senate Subcommittee on Investigations Page 17 of 27

July 25, 1985

result, the bank has turned

around dramatically, showing

net profits for the last thirty months and is well on its way to recovery. Yet the overhaul we began in 1983 continues.

One area to which I

personally devoted special

attention, for it is an area

that I feel should be addressed

to by the chief executive

officer, was the matter of

compliance with all the laws

and regulations.

A compliance officer

with extensive commercial

compliance banking experience

was hired.

A compliance office

was created and has

subsequently been revamped and

expanded. All compliance

procedures, manuals and

trainings were examined and

restructured.

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