OCC’s Otting will be recused from oversight of five banks, agency says
WASHINGTON — Comptroller of the Currency Joseph Otting will not be involved in certain regulatory matters related to five banks with which he has ties.
Otting will be recused from certain matters involving two banks where he previously held leadership roles, CIT and U.S. Bank, according to an internal staff letter that the Office of the Comptroller of the Currency released to reporters Wednesday. The other three banks are Central Bank in Lexington, Ky., UBS Bank USA and MUFG Union Bank.
The letter said Otting will bow out of "particular matters involving specific parties in which he knows one of the ... entities is a party."
Otting specifically cannot get involved in the pension units of U.S. Bank due to his investment as a former employee, as well as at MUFG Union Bank, where Otting worked in the eighties and nineties and where his wife has a pension. The recusal for those two banks only pertains to pension-related matters.
"Examples of particular matters involving specific parties include examinations, enforcement actions, contracts, and litigation," the letter, written by Ethics Counsel Jennifer Dickey, said. "Though uncommon, specific party matters may also include policies, regulations, or legislation narrowly focused on one or a few institutions."
Otting was an executive at U.S. Bank, where he worked during the early 2000s. He later served as CEO of OneWest Bank in California, which was merged into CIT in 2015.
“If any briefing or discussion that Comptroller Otting is attending should segue into a discussion where a recommendation or decision is sought on a specific-party matter covered by this recusal list, he will step out of the room,” Dickey wrote. “Or, if it would be disruptive to do so, he will advise those present of his recusal and refrain from offering any comments, recommendations or decisions on the matter.”
Both Central Bank and UBS Bank are state-chartered and therefore not regulated by the OCC, so the recusal letter will have limited impact on those banks. An OCC spokesman said Central Bank was included on the list "out of a preponderance of caution" because Otting is friends with an executive of the bank. Otting has a mortgage with UBS, according to his financial disclosure.
The other banks that fall under OCC oversight would continue to be regulated by the agency per usual but with limited say by Otting, depending on the matter.
It is common for a regulator to be recused from certain companies they were once involved with before they entered government. Otting’s recusal list was shorter than the 80 banks and other companies that were on the recusal list for Keith Noreika, who served as acting comptroller before Otting took the helm of the agency.