The American Bankers Association today said that while it supports a proposal by the Office of the Comptroller of the Currency to raise the threshold for which its heightened supervisory standards apply to banks, the agency should instead consider rescinding the policy.
In 2014, the OCC adopted heightened governance and risk management guidelines for banks with at least $50 billion in average total consolidated assets. The agency last year proposed raising that threshold to $700 billion. In a letter, ABA endorsed the proposal and agreed with OCC’s reasoning that the current guidelines established “overly prescriptive standards for banking organizations’ design and implementation of a risk governance framework and how boards of directors must carry out their oversight responsibilities.”
However, ABA said the same reasoning for raising the threshold also applies to rescinding the guidelines in their entirety. The association suggested that if the OCC wants to retain some aspects of the policy, then it should reissue the guidelines as nonbinding, principles-based supervisory guidance.
“The OCC has authority to ensure banks are operating in a safe and sound manner and a full rescission of the guidelines aligns with the OCC’s objectives of ensuring banks are focusing on material financial risks by enabling banks to establish institution appropriate risk management frameworks,” it said.
