FOR IMMEDIATE RELEASE
March 14, 2002
Contact: Robert M. Garsson
OCC Supports Legislative Efforts to Reduce Unnecessary Regulatory Burden
WASHINGTON — Julie L. Williams, Chief Counsel and First Senior Deputy Comptroller for the Office of the Comptroller of the Currency, told a House Financial Services subcommittee today that the OCC strongly supports provisions in pending legislation that would eliminate unnecessary regulatory burden on banks.
"Effective bank supervision demands that we achieve a balance among several, sometimes competing, but equally important, objectives," Ms. Williams said in testimony before the Subcommittee on Financial Institutions and Consumer Credit. "One of these objectives is to foster banks' ability to conduct their business profitably and competitively, free from burdensome constraints that are not necessary to further the purposes of the banking laws."
Ms. Williams said consumers and financial institutions would benefit from provisions that would:
"The bill also contains provisions that address a second, and fundamentally important, objective of bank supervision, and that is to promote and maintain the safety and soundness of the banking system," Ms. Williams said.
For example, the bill expressly authorizes the Federal banking agencies to enforce written commitments of institution-affiliated parties or controlling shareholders to provide capital to an insured depository institution. This provision would reverse the effect of recent Federal court decisions that allow agencies to enforce such written commitments only if they can show that the non-bank party was "unjustly enriched."
"By removing this impediment to our ability to hold parties to their commitments to provide capital, the new provision will enhance the safety and soundness of insured depository institutions and reduce losses to the deposit insurance funds," Ms. Williams said.
Ms. Williams said the OCC is working with the other banking agencies to develop recommendations for additional provisions that would enhance regulators' safety and soundness authority, reduce risk to the deposit insurance funds and facilitate enforcement efforts in cases involving wrongdoing.
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