- Key insight: OCC is reorganizing bank supervision into a tiered structure, walking back supervisory consolidation in April and reversing course on proposals to simplify supervision floated early in the administration.
- Supporting data: Nearly
half of bankers surveyed in an Aprilpoll opposed the idea of merging entire agencies. - Forward look: OCC will announce new leaders for regional and community bank supervision early next month.
The Office of the Comptroller of the Currency Thursday announced it will break its bank supervision wing into three distinct groups, trifurcating the management of national bank examiners based on banks asset sizes and foreign investment.
The move appears to be a reversal of an effort announced in April to unify bank supervision under a single unit.
As of the first of October, the agency will replace the existing Bank Supervision and Examination with distinct lines of business, each led by a Senior Deputy Comptroller that reports directly to Comptroller of the Currency Jonathan Gould.
"This realignment is consistent with our historic risk-based supervision approach and my commitment to tailor supervision to bank risk profile," said Gould in a release. "Over time, I expect these three bank supervision groups to generally align with our tailored regulatory framework. This new structure benefits the institutions we supervise and improves the management of examiner resources and supports examiner development and professional growth."
The supervisory group overseeing Large and Global Financial Institutions — defined by OCC as banks with assets exceeding $500 billion or those with foreign parent companies — will be led by the OCC's current Senior Deputy Comptroller for Bank Supervision and Examination Greg Coleman.
Two additional Senior Deputy Comptrollers will be appointed in early October to lead the remaining groups examining mid-sized regional banks — banks with $30 to $500 billion of assets — and a group overseeing community banks, which will supervise forms with less than $30 billion of assets.
The change seemingly reverses a move the agency made in April, when OCC merged its large, midsize and community bank supervision units into a single office. The April move was billed as streamlining oversight and reducing inefficiencies at the agency, which oversees nationally chartered banks. The OCC also
"Blending the large, midsize and community bank supervision activities will allow for the seamless sharing of expertise and resources to address bank-specific issues or novel needs and provides opportunities for career development and progression for the agency's entire examination workforce," an agency release stated in April. "To ensure [our] approach to supervision evolves to better address today's challenges, align similar functions within the agency, and leverage opportunities for efficiencies."
Community bank advocates like the Independent Community Bankers of America
In addition to splitting up supervision, the OCC Thursday also announced it would split the Office of the Chief National Bank Examiner into five divisions reporting to Senior Deputy Comptroller and Chief National Bank Examiner Jay Gallagher. These will include divisions devoted to supervision systems and analytical support, credit risk, compliance and operational risk, economics, as well as capital, market risk and asset management.
The Office of Financial Technology, created in 2023 under the Biden Administration, will report directly to Senior Deputy Comptroller and Chief National Bank Examiner Gallagher.
The move was met with praise from the ICBA, whose President and CEO Rebecca Romero Rainey said the move helps differentiate supervision of smaller, less risky firms from the largest and most complex banks in the world, both of which OCC oversees.
"The nation's community bankers strongly support today's OCC announcement preserving tailored regulatory supervision based on the size, scope, and complexity of our nation's financial system, as advocated by ICBA," Romero Rainey said. "We thank Comptroller of the Currency Jonathan Gould for today's announcement and look forward to continuing to work together to ensure tiered and proportionate regulations for the relationship-based community banking model, which is fundamentally distinct from the transaction-based model of the nation's megabanks."
Organizational changes at the bank regulators have proven more modest than what was initially envisioned at the onset of the second Trump administration. Last December, the Trump transition team reportedly considered merging federal banking regulators together, but that chatter
