By: Ken Chase.
The Office of the Comptroller of the Currency recently confirmed that the OCC will be cutting assessment rates for all banks next year in a move that is expected to “level the playing field” for the nation’s community banks. According to acting Comptroller of the Currency Michael J. Hsu, the fee cut will apply to the first $200 million of a bank’s assets, with an additional cut of 20% on assets greater than $200 million but less than $20 billion.
Hsu noted that the fee reduction will provide up to a $41.3 million savings for community banks, without reducing the “quality of OCC supervision or the resources available” to those banks. He added that the OCC hoped that the move will provide community banks with “extra breathing space” and more ability to make investments in cybersecurity, digitalization, personnel, and compliance.
As part of the OCC commitment to community banks, Hsu has focused on providing support in key areas. In addition to help with assessments, the OCC is streamlining licensing for de novo banks and reorienting its strategy for risk-based supervision. It is also pursuing changes in the way various agencies regulate the industry.
Hsu’s comments were delivered during a Texas Bankers Association meeting in Dallas at the beginning of September. He stressed the importance of being proactive about regulatory concerns and said that his approach has been informed by his experience during the 2008 financial meltdown, where he learned “about the disastrous consequences that can result from an unlevel playing field where regulatory arbitrage and races to the bottom are allowed to fester.”