GAO reminds banking agencies they are tardy in addressing ‘priority recommendations’ on alternative data, blockchain risks, more

“Priority recommendations” made by the congressional watchdog – and not yet addressed – for the three federal banking regulators are outlined in reports issued by the agency Tuesday.

According to the reports issued by the Government Accountability Office (GAO), several “priority recommendations” made in the past to the Federal Reserve, Federal Deposit Insurance Corp. (FDIC), and the Office of the Comptroller of the Currency (OCC) include:

  • Federal Reserve: Communicate appropriate uses of alternative data sources—such as rent or utility payments—in credit underwriting (made to all three agencies and the CFPB); establish or adapt an existing formal coordination mechanism to identify and address blockchain-related risks (made to all agencies); design and implement a process to communicate information about the uncertainty surrounding post-stress capital ratio estimates during capital analysis and review deliberations.
  • FDIC: In addition to the joint recommendations, the agency was also advised to follow up on a 2022 recommendation to coordinate with the other banking regulators and communicate to banks engaged in third-party relationships with fintech lenders on the appropriate use of alternative data in the underwriting process.
  • OCC: Recommendations were limited to those jointly advised for the other banking regulators.

GAO Priority Open Recommendations: