Breaking News: Curry replaced at OCC

Comptroller Curry to step down 5/5 — Trump likely to name banker Joseph Otting as permanent replacement.

Comptroller Curry will leave his post as Comptroller of the Currency on May 5.  President Trump appointed Keith Noreika to serve as acting comptroller.  Mr. Noreika is a banking law expert and a partner at the law firm of Simpson Thacher & Bartlett LLP.  He will keep the OCC running until President Trump names a permanent replacement (and that proposed permanent replacement is confirmed by the Senate).

“Serving as Comptroller of the Currency has been the highlight of my career,” Curry said in a statement. “The Comptroller is a special job and I am proud to have served with 4,000 men and women who showed such deep dedication to the agency’s mission of ensuring the safety and soundness of the federal banking system and the fair treatment of its customers.”

Many experts believe that President Trump will name Joseph Otting as Curry’s permanent replacement.  If Trump picks former banker Joseph Otting to head the OCC and he is confirmed, he will be the first former banker to head the OCC since the 90s.  Current Comptroller Thomas Curry’s appointment as head of the OCC expired last month.  Mr. Otting was chief executive of OneWest.  While at OneWest, Mr. Otting worked with current Treasury Secretary Steve Mnuchin, who was chairman of its board.

It will be interesting to see how this appointment would impact federal banking and the broader economy.  The OCC supervises more than 1,400 national banks and federal savings associations, including Bank of America and Wells Fargo. The OCC employs more than 700 bank examiners in its large-bank supervision division.  The OCC often has its examiners on-site at the banks it supervises (most regulators do not have this sort of constant oversight, but this arguably allows the OCC to truly understand the particular bank’s operations).

Comptroller Curry has been a regulator for most of his career – he served as Chairman of the Federal Financial Institutions Examination Council and he served as director of the Federal Deposit Insurance Corporation (which is the main federal regulator for state chartered banks).  Prior to joining the federal government, Mr. Curry led Massachusetts’ main bank regulator.

In contrast, Mr. Otting has been a banker for most of his career—he was the President, Chief Executive Officer, and a member of the Board of Directors of OneWest Bank.  He started his career at Bank of America, and progressed to Union Bank where he eventually was named Executive Vice President and Head of Commercial Banking.  He also worked for US Bank, a subsidiary of US Bancorp.  He served as the Market President of US Bank in Oregon, and Executive Vice President and Manager of East Region Commercial Bank Group.  He also led US Bank’s efforts to expand into California, and head roles of Vice Chairman, Head of Commercial Banking, and Head of Wholesale Middle Market Business.  All in all, his career has allowed him to work in the trenches of almost every aspect of banking.

While we know Comptroller Curry believed that banks had to partner with fintech companies or have a viable technology business plan to address the competitive landscape of the future, it is not clear where Mr. Otting stands on the issue of the marriage between traditional banking and technology.  Does he believe that the OCC should foster fintech and collaboration between tech companies and traditional banking?  Does he feel that the OCC was overstepping its authority with the proposed fintech charter?  Arguably, Mr. Otting and the White House want to focus on loosening regulatory roadblocks to allow banks to lend more – one criticism some have had against Comptroller Curry was that he was too aggressive in believing banks could not properly assess potentially risky lending practices.  Does a fintech charter play into using the best of technology and the best of banking practices to allow more efficient lending?  As noted in our comment to the OCC’s white paper about the proposed fintech charter, we believe that such a charter would promote responsible innovation.

Time –and maybe the Senate hearing—will tell.

Again, Mr. Noreika will keep the OCC running until Curry’s successor is confirmed—likely Mr. Otting.  If Mr. Otting is Trump’s pick for the permanent comptroller, OLPI does not believe there should be anything that really holds up his appointment, but you never know.  OLPI will keep you posted.a partner at law firm Sim

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