FDIC seeks personnel overhaul from Congress

The Federal Deposit Insurance Corporation on Wednesday asked Congress to grant the agency a broad range of personnel flexibilities that officials say are vital to continuing proper regulation of the banking industry.

"We're looking for flexibility; the banking industry is changing very rapidly," said Glen Bjorklund, the FDIC's deputy director for administration. "We cannot adjust our workforce as quickly, or even plan."

The FDIC's proposal was sent to the Senate Governmental Affairs Committee, the House Government Reform Committee, the Senate Banking, Housing, and Urban Affairs Committee and the House Committee on Financial Services.

The origin of the FDIC's request lies in a 60-year-old agency decision to voluntarily be a part of the competitive civil service. Bjorklund said the system has worked well, but the corporation -- which is funded by bank premiums, not congressional appropriations -- now has to modernize to keep tabs on the financial industry. The request includes greater latitude in hiring and pay as well as a streamlined appeals process.

Bjorklund compared the initiative with the wide-ranging personnel overhauls at the Defense Homeland Security departments. Congress allowed those agencies to craft their own human resources systems, outside of the purview of the standard civil service system.

Those reform efforts have met vehement opposition from federal labor unions. FDIC officials said they have been in contact with the National Treasury Employees Union and believe an acrimonious result can be avoided.

"I would say our conversations with them have been pretty much behind the scenes. They don't favor where we are going," Bjorklund said. But "there's not that level of rancor or concern that you are seeing with the Department of Defense's proposal."

The FDIC, however, has apparently underestimated the level of union opposition to its plan. NTEU President Colleen Kelley called on lawmakers to reject the proposal. The union represents about 4,300 workers at the FDIC.

"I am as concerned about the FDIC proposal as I am about the DHS and the DoD proposals," Kelley said. "Yes, it's different, but there are very serious things in here."

Of particular concern, she said, are proposals to alter the role of veterans preference in the hiring process and the development of extended term employment. Kelley said NTEU officials were discussing the proposal with the agency, but FDIC officials abruptly called off negotiations during the summer.

"It's unfortunate [and] that is not how it had to be," Kelley said. "There was a time I thought we were going to work through a package with FDIC that we could support."

FDIC officials said their proposal will not hurt agency employees.

The agency wants to "preserve merit, preserve due process, but have the freedom to seek efficiencies," Bjorklund said.