Warren, Van Hollen probe Bank of Tokyo's switch to national bank

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WASHINGTON — Democratic Senators Elizabeth Warren and Chris Van Hollen sent a letter to the Office of the Comptroller of the Currency on Monday questioning the regulator's decision to approve an application by the Bank of Tokyo to convert its charter from a New York State license to a federal license.

"We are disturbed by this decision, which appears to (1) allow the bank — which has a long record of compliance problems with the New York Department of Financial Services (DFS) — to evade an ongoing state-level investigation; and (2) run counter to standard OCC policies and procedures for licensing decisions," the Massachusetts and Maryland lawmakers said in a letter to acting Comptroller Keith Noreika and incoming Comptroller Joseph Otting.

Otting was confirmed by the Senate 54-43 last week, with the support of two Democrats.

Warren and Van Hollen, who sit on the Senate banking panel, also said it is “especially troubling" that the decision to approve the charter conversion was done while the OCC was under the leadership of Noreika, who represented Bank of Tokyo’s parent company Mitsubishi UFJ Financial Group before joining the OCC.

Noreika reportedly recused himself from the application approval process, but the lawmakers still found the process troubling.

“The decision raises additional questions about conflicts of interest that may have affected the OCC process and decision," said the letter.

The lawmakers also accused the Bank of Tokyo of trying to "sidestep a New York investigation" into whether it was allowing customers to avoid sanctions on countries like Iran and North Korea.

“We are deeply troubled that the OCC would not fully consider the implications of allowing a bank to change its charter in the midst of an investigation into potential sanctions violations given the recent tension related to North Korea's nuclear program,” they said.

The letter asks for a response by Dec. 1. The lawmakers also requested more information on whether the OCC evaluated whether the Bank of Tokyo made the move in order to "to escape supervisory actions by its current regulator," whether it was legal for the bank to expel DFS inspectors immediately after the federal bank charter was approved and the nature of Noreika’s recusal from the process.

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Enforcement AML Charter conversions Licenses and charters Elizabeth Warren Keith Noreika Joseph Otting OCC NYDFS Sumitomo Mitsui Finl Grp