The Government Accountability Office wants the Federal Deposit Insurance Corp. to make faster progress on strengthening bank supervision and addressing blockchain technology risks, two recommendations the watchdog issued in May 2025.
In a letter to FDIC Chair Travis Hill last week, GAO Acting Comptroller General Orice Williams Brown suggested that the banking agency consider implementing rotation requirements for its examiners.
“In 2024, we found that FDIC did not require periodic rotation of assignments for certain case managers, which could compromise their independence and interfere with supervision outcomes,” Brown wrote, in a letter released to the public Monday. “By implementing rotation requirements, as we recommended, FDIC could mitigate threats to independence and better ensure that escalation decisions are independent and evidence-based.”
The letter reiterated issues the GAO flagged in its 2024 report examining the FDIC’s response to bank failures of the prior year. The 2024 report found that unlike the Federal Reserve and the Office of the Comptroller of the Currency, the FDIC doesn’t require managing supervisors to rotate posts, meaning they could remain assigned to the same firms for years.
“While case managers may not meet all of FDIC's criteria for rotation requirements — specifically, they do not always have an on-site presence — they play a key role in the supervisory process and have important decision-making authority,” the GAO said in 2024.
Case managers assigned to the same bank for long periods “risk developing close relationships with institution management, which can threaten their independence and interfere with supervision outcomes,” the GAO found.
The FDIC, too, should devise a mechanism to address blockchain technology risks, and the GAO in 2023 found regulators “lacked an ongoing coordination mechanism” to address such risks. This would help the FDIC and other regulators “collectively identify risks and develop and implement a regulatory response in a timely manner,” Brown wrote.
The implementation of these and other open GAO recommendations, according to the watchdog, could save the FDIC large sums of money and improve congressional or executive branch decision making on major issues. It could also eliminate mismanagement and fraud and make progress toward addressing high-risk issues, GAO said.
“Taking action to implement all of GAO's open priority recommendations would directly support FDIC's mission,” the watchdog said.
