GAO defines regulatory capture as "a condition that exists when a regulator acts in service of private interests, such as the interests of the regulated industry, at the expense of the public interest, due to actions taken by the interested parties."

The GAO has not released its report on the NCUA but has reported that the Federal Reserve Banks are susceptible to regulatory capture.

The GAO said, among other things the OCC:

• In staffing teams for large bank examinations and other supervisory activities, fails to "actively check" whether employees may have financial conflicts of interest.
• Fails to analyze data concerning new and departing employees to ensure that the agency is not a "revolving door" with banks it supervises.
• Does not have an adequate system for examining a former employees' past work if the employees accept a job with a bank they supervised.
• Fails to require examination teams to document internal decisions when making decisions about a bank, jeopardizing requirements that the process remains transparent.
• Does not require examination teams to record communications with banks during the examination process.
• Does not require executive management to document when bank officials contact them about an examination that has been conducted.
• Allows examiners to make verbal recommendations that are never documented.

In a response to the GAO report, OCC officials disagreed with whether all documentation is required in many instances, saying such a recommendation does not "advance the aim of promoting robust supervision and independence."

They also disagreed with the GAO recommendation that the agency actively check for conflicts of interest when staff examinations. OCC officials said such a process would risk "undermining the expectation of personal responsibility."