OCC overhauls neighborhood, midsize bank guidance

The Office of the Comptroller of the Currency will revamp its guidance of neighborhood and midsize banks, consisting of designating one deputy comptroller accountable for managing “novel banks and technology service providers,” according to a memo gotten by American Banker.

The modifications will put a larger focus on monitoring fintech and cryptocurrency, in addition to producing versatility the company may require to represent debt consolidation of little banks. The reorganization will work Oct. 1.

“This is a significant restructuring of the midsize and community bank department,” stated Daniel Stipano, a partner at Davis Polk and a 30-year veteran of the OCC. “It’s recognizing the changes that have taken place in the industry, particularly those due to technology and consolidation.”

The OCC was unable to supply an authorities for an interview by press time.

The company is designating a deputy comptroller for the guidance of “novel banks and technology service providers,” according to the memo.

“This will provide a coordinated and consistent approach to supervising these institutions, which have specialized and unique business models,” the memo stated.

The concern of unique banks and innovation provider is growing in value to the OCC and other bank regulators, as the appeal of digital properties skyrockets and collaborations in between banks and fintechs end up being more widespread. The Biden administration has prompted stablecoin companies, for example, to obtain charters from banking regulators.

The OCC is likewise deserting its district structure for managing neighborhood banks, according to the memo. The company will eliminate its existing 4 district limits, which are presently the Central, Southern, Northeastern and Western districts.

Instead, it will develop 6 areas: Northeast, Central/Mid-Atlantic, South, Southeast, Midwest and West.

Currently, each of the OCC’s 4 districts has one deputy comptroller. The OCC stated its design is “fragmented,” and discussion products about the modification worried that the neighborhood and midsize bank inspectors will “operate as one team.” Under the brand-new system,there will be one assistant deputy comptroller per area; they will report to 3 deputy comptrollers.

In addition, the existing deputy comptroller post in charge of midsize bank guidance would stay. Starting July 17, that deputy comptroller will likewise monitor trust banks.

This might impact how some banks are taken a look at.

“Some banks may be examined by different people and different offices, and possibly with a different approach,” Stipano stated.

In addition to the neighborhood banks and unique bank modifications, the OCC will develop a Risk, Resources & Examiner Development system “to better inform and support supervision.”

The company stated it will likewise centralize its district and midsize operations personnel, “which will promote further consistency.”

The modifications will not lead to any layoffs, and won’t trigger any modifications in work places, however will develop more than 20 brand-new positions, according to the memo.


A news media journalist always on the go, I've been published in major publications including VICE, The Atlantic, and TIME.

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