House votes not to increase administrative liability of accountants when client is an insured financial institution.

• Position: Legislation - Brief Article

With strong support from the AICPA, the House of Representatives voted to delete a section in H.R. 1375 which was passed by the House Financial Services Committee that would have authorized the federal banking agencies to take administrative action, including imposing civil money penalties, on third-party providers of services (including accountants, attorneys and appraisers) to insured financial institutions for negligent action by the provider. The current administrative standard for third parties is knowing or reckless action. If enacted, this change would have placed third-party independent contractors on the same footing as financial institution insiders with respect to the banking agencies' administrative authority. While the banking...