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Wednesday, September 24, 2014

OCC’s Curry Endorses Tailored Supervision

Regulators should be able to tailor supervision to the unique business models of banks rather than relying on asset-size tests, Comptroller of the Currency Thomas Curry said at an industry event in Arlington, Va. He specifically referenced the Dodd-Frank Act’s $50 billion asset threshold for systemically significant firms, which he said “was a demarcation at the time [that] doesn’t necessarily mean you’re engaged in that activity that they are trying to target.” He continued:

The better approach is to use an asset figure as a first screen and give discretion to the supervisors based on the risks in their business plan and operations. It's just too easy to say, ‘This is the cutoff.’ I’m a little leery of just a bright line.

ABA has been encouraging Congress and the prudential regulators to employ tailored regulation in recognition of the diversity of the banking industry and to avoid imposing unnecessary regulation on banks whose business models do not warrant it.

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