Monday, November 19, 2012

A License to Heal

In the mid-1990's, shortly after the 1994 arrival of Chief Counsel Julie Williams to the OCC, the representative of the Comptroller's licensing function was toppled from the Olympian heights of the Comptroller's Executive Committee and quietly tucked away into the organizational structure of the Chief Counsel's office.  The Senior Deputy Comptroller for Corporate Activities took on the more modest, slightly humbler, title of Deputy Comptroller for Licensing.  That position, along with its staff, has been sequestered in the Chief Counsel's Office ever since.

In the campaign to champion national bank preemption and increase the value of the national bank charter, consolidating and unifying OCC's legal forces and its licensing forces was a very effective way to fortify the “surge”.  Post Dodd-Frank, however, the borders have been established and the battle has now largely been decided.   The prevailing and retreating forces have been pretty well sorted out.   It's another world now.

With no permanent Chief Counsel at the moment, Comptroller Curry has the opportunity to curb the out-sized influence of the Chief Counsel's Office among his circle of closest advisors.  The OCC's Annual Report breaks OCC mission-centric activities into three broad programs: Supervise, Regulate (Rulemaking), and Charter.   These are three broad line functions around which all other OCC staff functions are arrayed to support.   Given this established organizational framework, it is also an opportunity to rationalize the role of the Chief Counsel's Office as more of an advisory and supporting staff function, rather than an organization with multiple line responsibilities.

The national bank charter has now been joined by the federal thrift charter, making the OCC this nation's sole Federal financial institution chartering authority, with the exception of federal credit unions.  Multiple forces, including global financial integration, evolving Dodd-Frank requirements, and rapid changes in bank technology, will not only create their own unique impacts on the structure and operations of federally-chartered banks and thrifts, but also on the structure of the financial services industry generally.  New policy questions, including the inevitable unintended consequences of the new federal regulatory architecture, will need innovative regulatory responses.  These high visibility issues will impact OCC licensing decisions and establish precedents for decades to come.

The restoration of licensing to Executive Committee status would give the function direct access to the Comptroller and provide an additional voice at the table. This may have more advantages than disadvantages.

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