Comptroller of the Currency Thomas Curry spoke to the California Bankers Association on Friday and discussed some of the challenges and opportunities the banking industry is likely to face in 2013.
“California in many ways provides a microcosm of the U.S. banking system—and for that matter, the national banking system that the OCC supervises—with institutions that span the spectrum from the very small to the very large,” Curry said. “Housing and mortgage lending have traditionally been very important to the state and to the national banking system overall. Thus, they are sectors that have been a key focus of the OCC as well.”
Curry said that one of his top priorities has been to ease the transition for financial institutions as the OCC takes over many functions of the Office of Thrift Supervision.
“There are a variety of issues to deal with, of course; those of you that have been involved in mergers know how challenging it can be to bring together two organizations with different traditions and cultures,” Curry said. “However, we were helped by the close relationships forged over the years through our work on common problems and issues. I hope that those of you here today who represent thrift institutions have found the process to be relatively seamless…It is important that we make this process work, and we will do everything possible at the OCC to ensure its success.”
Curry also said that the implementation of Dodd-Frank will continue throughout the year, adding that regulators will continue to work on Basel III capital rules and the contentious Volcker Rule.
“I suspect some of you are probably thinking that 2013 is beginning to sound a lot like 2012,” Curry said. “But we really are nearing the finish line on Volcker and risk retention…As we look out over the legislative landscape, I think it is likely that Congress will consider a number of technical corrections to Dodd-Frank—and perhaps some corrections that are a bit more substantive than technical—but I doubt that the basic legislative framework will undergo significant change. So the rules we are finishing work on now are not likely to change much as a result of anything Congress might do.”
Additionally, Curry addressed the Basel III capital rules, which have been a cause for concern for many small banks worried about being able to meet stringent capital requirements.
“Some of the standards set out in the proposed rule-making are clearing appropriate for banking institutions of all sizes, and they belong in the rule-making,” Curry said, referring to the exclusion of financial instruments from regulatory capital and the restriction of bonuses and distributions for institutions nearing minimum capital levels. “But other elements are clearly not appropriate for smaller banks and thrifts, and our proposed rule-making reflects that.”