The regulator’s agenda includes reforms to liquidity risk management, Bank Secrecy Act/anti-money laundering (BSA/AML) compliance and community bank regulation, Comptroller of the Currency Jonathan V. Gould said in remarks delivered Friday (Dec. 12) at a meeting of the Financial Stability Oversight Council.
Gould said these planned reforms will mark a continuing of the efforts undertaken this year by the OCC, the Council and others.
“Taken together, these actions represent an initial, but not sufficient, effort to undo discretionary regulatory and supervisory policy choices made after the 2008 crisis that eroded effective supervision and threatened the relevance of the banking system,” Gould said.
Outlining efforts already carried out this year by the OCC, Gould highlighted the recission of the interagency 2013 leverage lending guidance that he said was legally suspect and prohibited broad categories of lending activity, changes to the enhanced supplementary leverage ratio (eSLR) that he said increased market resilience and lending capacity, and a proposed rule that would revise the community bank leverage ratio that he said would improve their ability to serve local businesses, homeowners and entrepreneurs.
Gould also spotlighted a series of reforms designed to tailor examination activities for community banks, efforts to focus supervision on material financial risks, and a proposed rule to eliminate “reputation risk” from OCC’s rules and supervision.
“Our aim is to concentrate supervisory and bank attention on material financial risks that genuinely threaten safety and soundness, not on secondary procedural issues,” Gould said.
When the OCC announced new guidance and proposed rulemakings in October, saying it aims to reduce “regulatory burden” for community banks and promote economic growth, the regulator added in a press release: “The OCC will continue to prioritize reforms targeted to community banks ahead of broader reforms for the industry.”
It was reported Wednesday (Dec. 10) that the Treasury Department aims to give its Financial Crimes Enforcement Network (FinCEN) the ability to veto other regulators’ findings that a bank has violated the Bank Secrecy Act.
With this proposed change, Treasury wants to ensure that regulators focus on key parts of banks’ anti-money laundering efforts, rather than on technical compliance, according to the report.
