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In Humphrey's Executor v. United States, 295 U.S. 602 (1935), the Supreme Court considered the proper role of the executive branch over congressionally established independent governmental entities. That case held that a commissioner of an independent agency cannot be removed because of his policy viewpoints.

Commissioner Humphrey

of the Federal Trade Commission was asked to resign by President Franklin D. Roosevelt. The Supreme Court, in ruling the removal of the commissioner unconstitutional, stated that:

the language of the act, the legislative reports,
and the general purposes of the legislation as
reflected by the debates, all combine to
demonstrate the congressional intent to create a
body of experts who shall gain experience by
length of service -- a body of experts which
shall be independent of executive authority,
except in its selection, and free to exercise its
judgment without the leave or hindrance of any
other official or any department of the
government. ... Its duties are performed without
executive leave and, in the contemplation of the
statute, must be free from executive control.

295 U.S. at 625-626. See also Wiener v. United States, 357 U.S. 349 (1958).

Conclusion

There is no sound legal basis to apply the Antideficiency Act apportionment provisions to the FDIC and inject the executive branch into the budget decisions of the FDIC.

APPENDIX

Partial Chronology of Prior Consideration of
Increasing Executive Budget Oversight Over the FDIC

1945

1947

1949

1950

1958

1960

In enacting the comprehensive Government Corporation
Control Act, Congress designated the FDIC as
"mixed-ownership" and did not include a requirement that
FDIC participate in the appropriations process. See
Government Corporation Control Act: Hearing on S.469
Before the Subcommittee of the Senate Committee on
Banking and Currency, 79th Cong., 1st Sess. (1945)
(statement of Leo T. Crowley, Chairman, FDIC).

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Budget Control Act The Senate rejected provision to subject the FDIC to the appropriations process by vote of 83 to 1. H.R. 3756, 80th Cong., 1st Sess. (1947). See Bank Supervision, Bank Directors and Conflicts of Interest: Hearings on S.71 Before the Committee on Banking, Housing, and Urban Affairs, 95th Cong., 2d Sess. 30 (1978) (statement of George LeMaistre, FDIC Director).

The House of Representatives rejected a proposal to
subject the FDIC to the appropriations process. H.R.
4177, 81st Cong., 1st Sess (1949). See Bank Supervision,
Bank Directors and Conflicts of Interest: Hearings on
S.71 Before the Committee on Banking, Housing, and Urban
Affairs, 95th Cong., 2d Sess. 31 (1978) (statement of
George LeMaistre, FDIC Director).

A House of Representatives Report expressly excluded the
FDIC from the appropriations bill because the FDIC's
funds, i.e., assessments on insured banks, were not
Government moneys and were used only for deposit
insurance. H.R. Rep. No. 303 81st Cong. 2d Sess.
(1950). See Bank Supervision, Bank Directors and
Conflicts of Interest: Hearings on S.71 Before the
Committee on Banking, Housing, and Urban Affairs, 95th
Cong., 2d Sess. 32 (1978) (statement of George LeMaistre,
FDIC Director).

Hearings were held on proposal to subject the FDIC to the
appropriations process. No action taken. Amending the
Government Corporation Co. Act: Hearings on H.R. 8332
Before a Subcommittee of the Committee on Government
Operations, 85th Cong., 2d Sess. (1958) (statement of
Rep. Patman).

Hearings were held on proposal to subject the FDIC to the
appropriations process. No action taken. Making the
Federal Deposit Insurance Corporation Subject to Annual
Budget Review: Hearings on H.R. 12092 Before a

Subcommittee of the Committee on Government Operations,
86th Cong., 2d Sess. (1960).

1960

1961

1965

1967

1977

1983

A proposal to subject the FDIC to the appropriations process was never reported out of committee. H.R. 12092, 86th Cong., 2d Sess. (1960). See Bank Supervision, Bank Directors and Conflicts of Interest: Hearings on S.71 Before the Committee on Banking, Housing, and Urban Affairs, 95th Cong., 2d Sess. 32 (1978) (statement of George LeMaistre, FDIC Director).

A proposal to subject the FDIC to the appropriations process was never reported out of committee. H.R. 6810, 87th Cong., 1st Sess. (1961). See Bank Supervision, Bank Directors and Conflicts of Interest: Hearings on S.71 Before the Committee on Banking, Housing, and Urban Affairs, 95th Cong., 2d Sess. 32 (1978) (statement of George LeMaistre, FDIC Director).

A proposal to subject the FDIC to the appropriations process was never reported out of committee. H.R. 10507, 89th Cong., 2d Sess. (1965). See Bank Supervision, Bank Directors and Conflicts of Interest: Hearings on S.71 Before the Committee on Banking, Housing, and Urban Affairs, 95th Cong., 2d Sess. 32 (1978) (statement of George LeMaistre, FDIC Director).

Report of the President's Commission on Budget Concepts advocated reforms including subjecting the FDIC to appropriations process. See, The Report of the President's Commission on Budget Concepts, 30 (1967).

A proposal to subject the FDIC to the appropriations process was the subject of hearings but no action was taken. Bank Supervision, Bank Directors and Conflicts of Interest: Hearings on S.71 Before the Committee on Banking, Housing, and Urban Affairs, 95th Cong., 2d Sess. (1978).

Study suggests comprehensive reform of laws governing
government corporations including subjecting them to
greater budget supervision. No action taken.
Comptroller General, Report to Congress: Congress Should
Consider Revising Basic Corporate Control Laws (1983).

FOR RELEASE UPON DELIVERY

June 4, 1986 10:00 A.M.

STATEMENT OF

ROBERT L. CLARKE

COMPTROLLER OF THE CURRENCY

Before the

FINANCIAL INSTITUTIONS SUPERVISION, REGULATION,

AND INSURANCE SUBCOMMITTEE

of the

COMMITTEE ON BANKING, FINANCE, AND URBAN AFFAIRS

U.S. HOUSE OF REPRESENTATIVES

June 4, 1986

Mr. Chairman and members of the Subcommittee, I welcome this opportunity to appear before you to discuss first, proposed legislation concerning bank advertising and disclosure practices intended to improve consumer information; and second, constraints facing the Office of the Comptroller of the Currency.

resource

BANK ADVERTISING AND DISCLOSURE

H.R. 2282, the "Truth in Savings" bill, attempts to achieve uniform disclosure of the interest rates and fees associated with interest-bearing deposit accounts offered by depository institutions so that consumers can make more meaningful comparisons among such accounts. The OCC fully supports this goal. We believe, however, that current federal banking agency regulatory initiatives in this area may make "Truth in Savings" legislation unnecessary.

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Background

The removal of interest rate ceilings on time and savings accounts, which was completed earlier this year, has resulted in an abundance of creative and innovative new deposit accounts. Consumers have clearly benefited from the greater choice of accounts available to them and the opportunity to earn market rates of interest on their savings deposits. variety of accounts with varying terms and conditions has understandably caused some customer confusion.

However, the

Most depository institutions have clearly and accurately explained the various features of their financial products. Nonetheless, it may be difficult for consumers to compare the individual features of similar accounts offered by different depository institutions. For instance, two accounts paying the same simple interest rate may have different yields depending on the frequency of compounding. To the extent that consumers are

confused, savings dollars may not flow to the depository

institutions offering the best rates and terms. For these

reasons, we share your view about the importance of uniform and

accurate disclosure in advertising.

Existing Rules on Bank Advertising

The OCC currently has no express rulemaking authority regarding advertising of deposit accounts by national banks.

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