Japan’s biggest bank has established a lobbying office in the United States as it pursues an ambitious U.S. growth strategy.
Roger Blissett has been hired to head up the government affairs office for MUFG Americas Holding Corp., the U.S. division of Mitsubishi UFJ Financial Group and the holding company for the $118.5 billion-asset MUFG Union Bank in San Francisco. As part of his new job, Blissett over the next two months will take on oversight of an existing team of about 15 employees who handle regulatory compliance and work with examiners.
“Once you make a commitment to the United States being a major market, you really have to become a part of the country. You can’t just be a lender,” Blissett said. “You have to be involved from a corporate social responsibility perspective. You have to be involved in some of the policy debates that pertain to your role as a financial institution. You just have to be involved. You just can’t be an outlier or on the sidelines.”
MUFG has been open about its intent to become a top 10 bank in the United States. The Tokyo-based bank started making inroads into the U.S. in 2008 when it acquired Union BanCal, now MUFG Union Bank, and a little over 350 West Coast branches with it. MUFG Union Bank would have to roughly double in asset size to achieve its parent company’s stated goal.
The company is facing slow growth in its home market of Japan, which has been dealing with negative interest rates and a declining population, and it views the U.S. as an attractive growth opportunity.
MUFG has drawn scrutiny for the recent switch by one of its bank units to a federal charter from a state charter. That decision, approved last fall, brought the New York branch of the Bank of Tokyo-Mitsubishi UFJ under the oversight of the Office of the Comptroller of the Currency, from the New York State Department of Financial Services.
The New York regulator was about to reprimand the bank for failing to improve its internal controls intended to prevent transactions in sanctioned countries, like North Korea. The OCC approved the application in just eight days, and once the bank got the OCC’s sign-off, it sued the New York regulator to stop it from pursuing any further regulatory actions.
Maria Vullo, the state superintendent of financial services, sued in January, questioning the legality of its charter switch and asking a federal judge to let her office fine the bank for making false statements about its efforts to improve internal controls.
The Senate’s Permanent Subcommittee on Investigations is now looking into the matter as well, Bloomberg News has reported.
MUFG declined to comment on the lawsuit. Blissett will not be directly involved with it since it is a legal matter at this point, a company spokesman said.
“His priorities will be to engage with governmental bodies, the OCC and the Federal Reserve," the spokesman said.
Blissett joined MUFG late in February from the Royal Bank of Canada in New York where he worked for 20 years, most recently as managing director of U.S. strategy for RBC Capital Markets. In his new role, he will report to MUFG Americas’ general counsel, Michael Coyne.
Quote“Once you make a commitment to the United States being a major market ...you have to be involved in some of the policy debates that pertain to your role as a financial institution," says Roger Blissett.
Blissett will be based in New York and expects to travel all over, focusing not just on legislative issues in Washington, D.C., but also at state and municipal governments throughout MUFG’s U.S. territory.
In an interview with American Banker, he said his first priority is getting to know the organization, learning who and where MUFG’s borrowers are and getting a feel for its corporate culture.
MUFG is establishing its government affairs function during an election year — and Blissett said he recognizes that could make it harder for lawmakers to find time for him to discuss banking policy matters.
While the bank’s government affairs office is still in its infancy, Blissett named a few issues of interest to MUFG’s business plan. Infrastructure is a big one, and alternative energy is another.
For instance, MUFG favors efforts to diversify sources of energy. It has developed a specialty in lending to developments in wind and other nontraditional power sources.
"We’ve been very big in wind development and alternatives, so we’ll continue to be committed to that," Blissett said.
Blissett also said the company may eventually hire additional staff. That is where the timing of an election year might prove advantageous for the bank.
“We’ve seen a number of people deciding they’re no longer going to seek reelection, and those people have staff, so that may be an opportunity to look at folks who may be interested in working with us down the road,” he said. “We have to weigh all that and look at it carefully.”
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Corrected May 8, 2018 at 7:23PM: An earlier version of this story misstated the name of the MUFG unit that switched charters in New York. It was the New York branch of the Bank of Tokyo-Mitsubishi UFJ.