Question

Which of the following is NOT allowed under OCC Regulation 9?

1) A member of the trust administration committee also is on the investment committee.
2) A member of the trust committee also is on the bank's loan and discount committee.
3) A director/officer who participates significantly in the administration of fiduciary activities serves on the trust audit committee.
4) A member of the trust administration committee is an officer of a non-affiliated bank.

Answer 1

Under OCC Regulation 9, it may not be allowed for a director or officer who participates significantly in the administration of fiduciary activities to serve on the trust audit committee, due to potential conflict of interest concerns.

Step-by-step explanation:

The subject of your question is related to the regulations under the Office of the Comptroller of the Currency (OCC) Regulation 9, which governs the fiduciary activities of national banks. In regards to which of the listed scenarios is NOT allowed under OCC Regulation 9, it is generally important for individuals in a fiduciary position to avoid conflicts of interest that could impair their judgement or lead to a breach of fiduciary duty. Therefore, a potential conflict may arise if a director or officer who significantly participates in the administration of fiduciary activities serves on the trust audit committee. This scenario could compromise the audit committee's independence and the effectiveness of audits, as the person being audited would also be part of the auditing body.