OCC, FDIC heads discuss plans for community bank relief

OCC and FDIC leaders said they plan to focus on improving the regulatory framework for community banks, including making changes to the community bank leverage ratio.

OCC Focus: Speaking at this week’s Financial Stability Oversight Council meeting, Comptroller of the Currency Jonathan Gould said the OCC will:

• Tailor bank supervision and prioritize reforms aimed at community banks.

• Revise its examination approaches to community banks for fair lending, capital, liquidity, the Community Reinvestment Act, and third-party risk management, with an eye to adjusting such approaches to reflect the low risks posed by community banking activities.

• Ensure de novo charters and bank mergers and acquisitions decisions are made quickly.

FDIC Priorities: Also at the FSOC meeting, FDIC Acting Chairman Travis Hill said the FDIC is:

• Analyzing potential changes to the community bank leverage ratio.

• Working to reform the CAMELS rating system with a goal of shifting the emphasis toward financial risks and away from process.

Michelle Bowman Comments: Fed Vice Chair for Supervision Michelle Bowman recently said the Fed has started looking at elements of the bank regulatory framework unique to community banks, including the community bank leverage ratio.

Recent ICBA Input: ICBA in July shared near-term regulatory priorities in a letter to Bowman, including fixing broken regulations harming communities and reducing the community bank leverage ratio.

Ongoing Agency Efforts: The agencies this year have undertaken numerous regulatory relief efforts in line with ICBA’s “Repair, Reform, and Thrive” plan, including the FDIC withdrawing proposals on brokered deposits and corporate governance, proposing to raise various regulatory thresholds, and proposing amending its guidelines for appealing material supervisory determinations.