WASHINGTON — Top Republicans on the House Financial Services Committee are pressing acting Comptroller of the Currency Michael Hsu about allegations that the agency's former fintech czar
Earlier this year, the Office of the Comptroller of the Currency hired Prashant Bhardwaj — who the agency claimed had "nearly 30 years of experience serving in a variety of roles across the financial sector" — to be its deputy comptroller and chief financial technology officer. His job was to oversee fintechs and the banking-as-a-service sector.
At some point after April, the OCC scrubbed any mention of Bhardwaj from its website.
Some false claims detailed by reports in The Information and Fintech Business Weekly were easily discoverable — the "30 years of experience" in the fintech industry would have meant that he started in the industry as a young teenager. Documents obtained from a Freedom of Information Act request first published by The Information also revealed several jobs Bhardwaj listed on his resume that, according to those institutions, he never held.
Senior Republican lawmakers on the Financial Services Committee — including Reps. Andy Barr, R-Ky., chairman of the subcommittee on financial institutions and monetary policy; Bill Huizenga, R-Mich., chairman of the oversight subcommittee; and French Hill, R-Ark., chairman of the fintech panel — have asked Hsu to provide a briefing to lawmakers on the hire, and what work Bhardwaj was involved in during his time at the agency. The lawmakers made the requests in a letter sent Thursday.
"There is risk that some of the recently proposed federal banking rules from the OCC were made with input from unqualified individuals, or individuals with complacency toward attending to detail and accuracy," the lawmakers said.
The pressure from Republican lawmakers coincides with a heavy pushback from the banking industry on regulatory tightening, and the looming threat of legal challenges to banking agencies' rulemakings. The lawmakers reference regulators' rulemakings in the letter, and they suggest that Bhardwaj's hire could put them into question.
The strongest opposition has been
"The OCC, with officials at the Federal Reserve Board and the [Federal Deposit Insurance Corp.], has been issuing an onslaught of proposals this year," the lawmakers said. "The deluge of recent proposals, guidance, statements, and principles to essentially rewrite the rules of the road for financial institutions in the United States is staggering. Yet, significant proposals with the potential to invoke systemic instability, if not properly calibrated, have been put forward with little to no analytical underpinnings or justifications, possibly reflecting staffing inadequacies."
Hill, Barr and Huizenga requested details on the OCC's hiring practices for senior positions, as well as Bhardwaj's duties and responsibilities, along with specific contributions Bhardwaj made to proposals, guidance or statements at the agency.
"There are significant risks of negligent vetting practices at the OCC that cannot be understated," the lawmakers said in the letter. "There is reputational risk to the OCC through loss of credibility if such high-level positions can be filled with unqualified individuals. There is also a risk of establishing an OCC culture where positions are not based on qualifications and merit but instead on personal connections or other characteristics not aligned with the roles' duties and responsibilities. And most importantly, there is risk that the OCC has broader problems with vetting personnel, which can blossom into larger risks, including to safety, soundness, and stability of the banking system."
