Financial Regulatory Advice and Response Team members Neil Bloomfield, Ed O’Keefe, Tom Pennington, and Kris Whittaker attended the Prudential Regulation Conference presented by SIFMA and The Clearing House in Washington, D.C. This year’s conference was focused on the future of prudential regulation, including the new leadership at the prudential agencies. The conference included insights from the Joseph M. Otting, Comptroller of the Currency, Mark E. Van Der Weide, General Counsel for the Federal Reserve, and Jelena McWilliams, Chairman of the FDIC, among others. There are a few overarching themes to the conference. All three of the speakers focused on a commitment to transparency and a willingness to revisit existing rules and guidance. They also all discussed their agencies actions to implement S. 2155, the “Economic Growth, Regulatory Relief and Consumer Protection Act” (also known as the Crapo bill) and the recently proposed revisions to the Volker Rule.
Comptroller Otting reaffirmed his commitment to the priorities we discussed in our earlier post and in his recent testimony before the Senate Banking Committee. Specifically, he focused on his goals to:
- modernize the Community Reinvestment Act;
- encourage banks to meet customers’ needs for short term, small dollar credit; and
- work with FinCEN to promote more efficient compliance with the Bank Secrecy Act and anti-money laundering regulations.
This was one of the first opportunities for Chairman McWilliams to discuss how her tenure at the FDIC may take shape. Chairman McWilliams made several key points, including that she:
- plans a listening tour to the 53 jurisdictions overseen by the FDIC (i.e. the 50 states, District of Columbia, Puerto Rico and Guam). She intends to hear from the banks supervised by the FDIC as well as consumers;
- believes strongly in seeking feedback from the institutions regulated by the FDIC;
- is interested in revisiting the CAMELS definitions and process, which has not been considered since the 1990s. In addition, she supports reviewing the CID and MRI/A to ensure consistency. Chairman McWilliams intends to bring these issues to the FFIEC during her tenure as Chair of that organization;
- suggests the US consider its engagement with Basel. She expressed concern that US banks may be taking anticipatory actions regarding assets based on opinions from the Basel Committee that the US bank regulators will not follow; and
- suggests banks be permitted to streamline their resolution plan submissions to reflect only the changes from prior submissions.
Mark E. Van Der Weide, General Counsel for the Federal Reserve focused his remarks on several areas that are currently outstanding at the Board, including:
- tailoring rules and guidance to the size and complexity of the organizations supervised by the Federal Reserve;
- increasing efficiency of the Federal Reserve’s actions to lessen regulatory burden;
- simplifying the regulatory framework; and
- ensuring to the extent possibly the transparency of the Boards actions and decision making.
Mr. Van Der Weide also discussed several pending capital related proposals, additional guidance on resolution planning, TLAC and revamping the definition of “control”.