ABA Banking Journal - December 2011 - (Page 12)
Did regulators have to slap so many banks so hard?
In the current banking crisis, regulatory orders and enforcement actions have been handed out with frequency and gusto. A former federal official, frequently described during the 1980s crisis as “the regulator from Hell,” thinks federal agencies have overdone it. “Enforcement actions should be for banks that don’t get it,” said Robert Clarke, former Comptroller of the Currency (1985-1992). “They shouldn’t be something put out there to please the agency’s Inspector General or the chairman of a congressional banking committee. They shou ld be used judiciously and used where there is no other way to get the job done.” Clarke, now senior partner at the Houston law firm of Bracewell & Giuliani LLP, joined fellow speaker Donald Powell in an ABA Annual Convention dissection of the current regulatory environment. Powell, former FDIC chairman (2001-2005), now serves on Bank of America Corp.’s board. Clarke said he believes banks and regulators need to work harder at communicating with each other. Regulators, he said, need to “calm down” and ask if they really need to take as drastic action in as many cases as they have. Regulators have spoken of cases where, in exam after exam, management does not act on examiner findings or demands for improvement or change. But in his comments during the panel discussion, Clarke took the opposite position at first, criticizing cases where, in a series of exams, guidance from each examiner on a given subject—he used loan loss reserves as an example—proved contradictory. “There needs to be predictability,” said Clarke. “At the be
Enforcement actions should be for banks that don’t get it
— Robert Clarke, former Comptroller of the Currency
ginning of the year, you should be able to figure out what the expectations of examiners are going to be.” But when what’s been recorded in an exam report is dead on, he said, the bankers ought to do something about what’s been flagged. Clarke suggested that regulators could help ease matters simply by giving bankers an opportunity “to blow off a little steam.” For his part, Don Powell said greater dialog between regulator and regulated would help a banker say directly to a regulator, “I bumped my head, but I’m going back in.” Read more at http://tinyurl.com/clarkepowell
Did You Miss This?
I don’t ever remember a time when the input of bankers on regulations being written is more important than now. You’re the leading expert on your bank. Just say, ‘Here’s how this reg will impact my bank and my market’
— Mark Olson, co-chair, Treliant Risk Advisors
12 | ABA BANKING JOURNAL | december 2011
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