WASHINGTON — A pending rollback of regulations by Congress and regulators will help community banks and the industry at large, a top Office of the Comptroller of the Currency official said Friday.

“I want to share the OCC’s optimism about the industry and the opportunity for meaningful regulatory relief,” said Blake Paulson, deputy comptroller for the central district in prepared remarks to bankers in Chicago.

Paulson was speaking on behalf of acting Comptroller of the Currency Keith Noreika, who is leaving the agency as Joseph Otting, who was confirmed by the Senate on Thursday, is set to take over next week.

Joseph Otting, chief executive officer of OneWest Bank.
Joseph Otting, a former CEO at OneWest, is to be sworn in soon as the next comptroller of the currency. Bloomberg News

“Bankers, industry representatives, regulators, and legislators are having conversations today that would not have been possible just a few months ago,” Paulson said. “That change in tone is very encouraging, and suggests that we can have a constructive process for sharpening our regulatory framework to ensure that it works for everyone.”

Paulson pointed to a September proposal by the OCC, Federal Deposit Insurance Corp. and Federal Reserve Board to simplify capital requirements for banks with assets of less than $250 billion. He also noted that Republican and Democrat senators on the banking panel recently announced a deal to soften Dodd-Frank regulations.

That deal would raise the Dodd-Frank systemically important threshold to $250 billion of assets from $50 billion. Banks above that level would still be subject to the enhanced Dodd-Frank requirements, but those below it would be free unless the Fed designated them as risky.

The bill would also simplify capital requirements for well-capitalized banks with assets of less than $10 billion; exempt such institutions from the Volcker Rule; and give federal savings associations with assets below $15 billion more flexibility to operate as national banks. Banks with less than $5 billion in assets would be able to file shorter call reports.

“The proposal includes a number of targeted fixes in a variety of areas that the OCC supported,” Paulson said.

The OCC official added that the that agency is reviewing compliance risks, including those related to the Bank Secrecy Act, mortgage disclosures and the Military Lending Act.

“These are risks that should sound very familiar to all of you, and it should not be a surprise that we will be focusing on these areas in the next six to 12 months,” Paulson told the bankers.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.