Evolution of Bank Supervision: 1940–1959

World War II pulled many bank examiners off the front lines of supervision and onto the front lines of combat, which meant increased responsibility for the remaining staff. Despite this, the staff successfully shouldered the heavy burden connected with banks’ roles in financing the production of war materials and spearheading the government’s bond drives. After the war, consumer spending and borrowing grew. Loan losses were low, banks were profitable, and bank failures were practically nonexistent.

Technological developments such as drive-through tellers and credit cards occurred with the growth of suburban sprawl and branch banking. While the breadth of supervision became more complicated with such developments, stability in the federal banking system eased pressure on OCC examiners.

The interstate highway system simplified travel and logistics for conducting examinations. Best of all, according to the legendary examiner “Preacher” Knight, were air-conditioned cars. A team approach to bank examinations bred camaraderie and esprit de corps.