Bank-Friendly Regulator Makes Sales Pitch: Pick OCC Over States
(Bloomberg) -- A top bank regulator appointed by President Donald Trump is urging foreign lenders to pick his agency’s oversight instead of being supervised by New York and other U.S. states that have triggered compliance headaches for overseas firms.
Joseph Otting, who Trump named to take over the Office of the Comptroller of the Currency a year ago, used a speech in Tokyo Wednesday to make an unusual sales pitch to banks on the benefits of consolidating their U.S. business under his agency. Otting, a former banker himself, touted the OCC’s expertise and said lenders could get “supervisory efficiencies” from ditching the state-by-state oversight their U.S. branches might operate under now.
“Banks should be aware that the OCC is well-positioned and qualified to provide effective and efficient supervision of federal branches of foreign banks operating in the United States,” Otting said. The OCC’s “licensing, legal and supervision experts” stand ready to help bankers make a switch, he added.
If banks do choose the OCC, they will have a sympathetic regulator. Otting said bankers “make dreams come true,” and he wants to help them do that “by reducing the unnecessary burden and inefficient regulation.”
His remarks bring to mind a controversial swap that the OCC approved last year in which Mitsubishi UFJ Financial Group Inc., known as MUFG, dropped its state license in New York for a federal one. The unusually fast exchange happened as the New York Department of Financial Services said it was preparing to reprimand the Tokyo-based lender, and the bank sued the state regulator to prevent it from pursuing enforcement actions.
Maria Vullo, New York’s banking supervisor, accused MUFG of engaging in regulatory arbitrage, arguing the bank was fleeing the consequences of its compliance failures. Bloomberg reported in April that a U.S. Senate investigative panel had opened a probe into the matter.
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