Forum Calls for Rescission of Standards That Impede Efforts to Ensure a Safe and Strong Financial System
The application of the Guidelines to banks of any size contradicts the goal of refocusing supervision on material financial risks.
Washington, D.C. – The Financial Services Forum supports the Office of the Comptroller of the Currency’s (OCC) reforms to the supervision and examination process and urges the agency to further their efforts by rescinding the onerous guidance for banks of all sizes. In a comment letter, the Forum explained that instead of raising the asset threshold for banks subject to the current guidelines, the OCC must revoke the standards in full to ensure banks and their supervisors can better focus on safety and soundness risks.
“At a fundamental level, the Guidelines are flawed because they represent a one-size-fits-all approach to risk governance and board oversight that is not mandated by any statute. They are a clear example of what Comptroller Gould has identified as ‘supervisory policy choices made after the 2008 crisis that eroded effective supervision…’ The OCC has now committed to refocusing supervision on material financial risks that genuinely threaten safety and soundness. In our view, this goal compels the conclusion that the Guidelines must be rescinded in full,” the Forum stated in the letter.
The Forum highlighted that the largest banks are already subject to enhanced risk management standards and overly prescriptive standards in excess of those requirements can fragment risk management and undermine resilience. While a full rescission is the most effective way to ensure appropriate supervision for all banks, the Forum also provided clear guidance if the OCC decides to retain any aspects of the guidelines, including:
- Reissuing any remaining aspects as nonbinding supervisory guidance following appropriate notice and comment procedures.
- Fundamentally reforming their approach, scope and content to ensure they align with the OCC’s supervisory objectives.
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The Financial Services Forum is an economic policy and advocacy organization whose members are the eight largest and most diversified financial institutions headquartered in the United States. Forum member institutions are a leading source of lending and investment in the United States and serve millions of consumers, businesses, investors, and communities throughout the country. The Forum promotes policies that support savings and investment, financial inclusion, deep and liquid capital markets, a competitive global marketplace, and a sound financial system.
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