Comptroller of the Currency Joseph Otting made some news on Capitol Hill in testimony before the House Financial Services Committee on June 13 and the Senate Banking Committee on June 14.
- In his House hearing, Otting stated that some fintech startups could meet capital and liquidity requirements necessary to become banks, though he avoided specifics on how the OCC will proceed on plans to issue a special purpose charter for fintech startups that would allow them to compete nationally under federal supervision rather than apply for licensing state by their states – a move that has come under legal challenges from state regulators.
- Otting also testified that his agency is calling on larger banks to adopt stronger policies to prevent the opening of unauthorized accounts, though he said OCC's "horizontal review" last year of more than 40 national banks "did not find pervasive or systemic issues in regards to improper account openings."The review, not publicly released, of more than 500 million new accounts found roughly 20,000 without proof of authorization, of which OCC believes less than half were unauthorized, according to Otting.
- The Comptroller also offered his views on overhauling landmark banking regulations, including rules under the Community Reinvestment Act and the Bank Secrecy Act, which he called his top two priorities, and plans to reduce the agency's own spending, including "shrinking our physical footprint and taking advantage of technology to reduce our costs.
- In implementing the bank deregulation bill signed into law in May, Otting said "we will need to consider whether the proposed recalibration of the enhanced supplementary leverage ratio remains appropriate, or whether additional fine tuning will be necessary."
- Otting faced criticism from Senate Democrats over changes to the CRA, which OCC oversees, with members suggesting that the Comptroller had not demonstrated sufficient sensitivity to discrimination and the needs of poorer communities. Banking Committee Democrats are also calling for more information on that horizontal review.