As they restructure the processes for making confidential bank information available for public review, regulators should better coordinate their efforts to ensure banks do not face differing disclosure requirements, the American Bankers Association said.
Earlier this year, the FDIC and Office of the Comptroller of the Currency issued separate but related proposals to strike a better balance between public disclosure and protecting confidential information collected as part of agency supervision. Generally, the new rules would allow banks to share confidential information with certain parties without first obtaining agency authorization, as long as certain precautions are taken. They also would revise the agencies’ Freedom of Information Act process.
In two letters to the agencies (FDIC letter and OCC letter), ABA noted the proposals contain several important improvements, including allowing supervised entities to make specified disclosures of confidential supervisory information without prior agency approval. Still, the association raised several concerns, among them the need for the agencies to coordinate with each other and the Federal Reserve in standardizing their disclosure rules.
“Many banking organizations are supervised by multiple federal and state agencies, maintain affiliates subject to different supervisory regimes, and routinely manage information that may implicate more than one agency’s confidentiality rules,” ABA said in its letter to the OCC. “Different standards across the agencies can impose meaningful operational burden, create uncertainty about permissible disclosures, and delay routine information sharing even where all relevant parties have a legitimate need for the information and maintain appropriate safeguards.”
ABA also recommended that the agencies expand and clarify the circumstances in which institutions may disclose confidential information without prior approval and that they preserve fundamental confidentiality protections while providing greater transparency and predictability.
