Key regulator presses Congress on bank bill

Key regulator presses Congress on bank bill
© Greg Nash

A top banking regulator called Monday for Congress to pass a bipartisan rollback of strict banking rules passed after the 2008 financial crisis, but wouldn’t take sides in a power struggle over the bill between the House and Senate.

Comptroller of the Currency Joseph Otting said the House should clear a bipartisan Senate-passed bill to scale back the Dodd-Frank Act. The former bank president said the reform bill is critical for smaller firms weighed down by the 2010 law.

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“This is a monumental change in our ability to influence regulation. I don’t think this is the last time for us to get a chance to open this,” Otting said at a Washington summit for community bankers. “We’ve always said that if we were writing it ourselves, we would probably modify some of the elements. But in its holistic format, we’re supportive.”

The bill, sponsored by Senate Banking Committee Chairman Mike CrapoMichael (Mike) Dean CrapoHillicon Valley: Trump signs off on sanctions for election meddlers | Russian hacker pleads guilty over botnet | Reddit bans QAnon forum | FCC delays review of T-Mobile, Sprint merger | EU approves controversial copyright law Trump authorizes sanctions against foreign governments that interfere in US elections Cruz gets help from Senate GOP in face of serious challenge from O’Rourke MORE (R-Idaho), would exempt dozens of banks from some of the strictest parts of Dodd-Frank. The measure passed the Senate last month, 67-31, with strong bipartisan support.

But Speaker Paul RyanPaul Davis RyanGOP super PAC drops .5 million on Nevada ad campaign Blue wave poses governing risks for Dems Dems seek to rebuild blue wall in Rust Belt contests MORE (R-Wis.) has vowed to freeze the bill until senators agree to negotiate on changes with House Financial Services Committee Chairman Jeb HensarlingThomas (Jeb) Jeb HensarlingMidterms to shake up top posts on House finance panel Kavanaugh hires attorney amid sexual assault allegations: report Did Congress just settle for less than best plan to reform housing finance? MORE (R-Texas).

Otting told reporters after his speech before the Independent Community Bankers of America that he’s “not in a position” to say whether Ryan should end the blockade.

Instead, he encouraged both chambers to come to an agreement on the best way to clear the bill.

“There needs to be some dialogue between the Senate and the House if there are other provisions that are included in that,” Otting told reporters. “Congressman Hensarling has a lot of active voices about things that should be included in that, and I just hope they can get to resolution on something that can go to the floor.”

Otting also previewed several of his own efforts to revamp banking laws through the Office of the Comptroller of the Currency (OCC), which was created to ensure the safety and soundness of U.S banks and deposit holders.

The comptroller said the OCC would weigh in within the next two to three months on whether financial technology companies should be able to apply for a bank-like charter. Such a charter would allow companies that offer online lending and other financial services to operate nationally while adhering to federal banking standards.

Financial technology boosters say a national charter would help innovative firms reach more consumers without having to traverse state-by-state approval. Bank advocates fear that the charter could allow risky startups to drive further consolidation within the industry and harm the smaller brick-and-mortar lenders.

Otting has expressed openness to a charter for financial tech companies, but he pledged Monday that nationally approved firms would be “subject to the same rules and regulations as other banks in the market.”

“If they want to be a bank then we really need to understand what they’re underwriting,” Otting said, “And we can’t get in a position where they’re selling a product that wouldn’t be bank-ready."