Independent Banker - March 2019 - 29

Next: Why your bank needs leaders of all generations
understand the burdens bankers face, and how
to achieve quality supervision that ensures a
safe, sound, fair banking system that meets the
needs of consumers and businesses across the
country. In 2018, we made good progress toward
rationalizing banking rules and regulation. The
Economic Growth, Regulatory Relief, and Consumer
Protection Act (S.2155), enacted in May
2018, made common sense, bipartisan reforms
that the banking agencies acted quickly to implement.
The list of where we made progress is
lengthy: fewer banks under the Volcker Rule,
increased use of short-form call reports, less
frequent examinations for the healthiest community
banks and a simpler capital regime.
In 2019, we'll complete our work implementing
the Economic Growth Act and continue to
work on modernizing Community Reinvestment
Act (CRA) regulations. We'll also work to
make compliance with Bank Secrecy Act and
anti-money laundering (BSA/AML) rules more
efficient and effective.
I also support the dual banking system. The
decision to operate under a federal or state charter
is a bank's business decision, and the freedom
to choose what model works best provides
strength and diversity to our nation's economy.
Q:
A:
What is your view on consolidation
in the banking industry?
Consolidation is a three-decade trend
that appears likely to continue. As comptroller,
I am focused on ensuring that federal
banks and thrifts operate in a safe, sound and
fair manner, and have the regulatory framework
that allows them to compete and adapt to meet
the financial needs of their communities.
I am encouraged to see a resurgence in de
novos. Renewed interest is driven by economic
conditions, banks' abilities to reach new customers,
valuations and regulatory reform. We are
committed to making sure the de novo process
is predictable and timely. Again, it's a good time
to be a banker.
Q:
A:
Are there any initiatives under way
to ensure that the national bank
charter remains relevant and attractive for
community banks?
As a banker, my preference was always
to operate under a federal charter and to
be supervised by the OCC. It made good business
sense, because it allowed our bank to compete
and operate nationwide under one primary regulator
and one uniform set of rules and regulations
as a result of federal law. The men and women of
the OCC provided quality supervision, spotted
issues early and worked with management to
resolve concerns before they became problems.
When they had to, they held management's feet
to the fire and always maintained open communication.
That kind of supervision is priceless.
The OCC continually looks at ways to improve
its supervision and the value of being part of the
federal banking system. One way we did that in
2018 was to focus internally on how we operated
to ensure we spent every dollar in bank assessments
wisely. We eliminated nearly $100 million
in costs in 2018, and as a result, announced the
first reduction in annual bank assessments in a
very long time.
Q:
A:
See the April
2019 issue of
Independent
Banker for
the second
part of our
interview
with Joseph
Otting. You
can also
read the full
interview
online at
independent
banker.org
Are the large national banks becoming
too big to fail or to regulate?
The nation needs a diverse banking system,
and that includes having smaller
local banks that understand their neighbors'
needs intimately and large multinational banks
capable of supporting the nation's industrial
needs on a global scale.
The OCC has a great deal of experience supervising
banks of all sizes, including the nation's
largest, most internationally active banks. Over
the past several years, the agency has enhanced
how it supervises large banks and raised the bar
for how large banks approach their risk. That has
made a significant difference since the last crisis.
Other things have changed since the last crisis
as well. Banks have the best risk management in
my memory, capital and liquidity are approaching
historically high levels, and there are greater
controls around the riskiest activities for the
largest banks. Today, we also have greater coordination
through the Financial Stability Oversight
Council, more resolution authority that provides
orderly liquidation and more risk-sensitive oversight
by federal regulators.
independentbanker.org Q 29
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Independent Banker - March 2019

Table of Contents for the Digital Edition of Independent Banker - March 2019
