On his first day as acting comptroller of the currency, Michael Hsu vowed to focus on "solving urgent problems and addressing pressing issues until the 32nd Comptroller is confirmed," according to a statement the Office of the Comptroller of the Currency (OCC) posted on its website Monday.
Among the urgent matters Hsu listed are climate change, accelerating digitalization, the disproportionate impact the pandemic has had on communities of color and rural areas, and the consequences of risk at banks.
"Complacency about risk-taking is of increasing supervisory concern as we enter a phase of growth and heightened competition," Hsu said Monday.
Hsu also said he would announce a review of key regulatory standards and various pending matters but did not mention any by name.
His predecessor as acting comptroller, Blake Paulson, drew the ire of Democratic lawmakers last month over his defense of the "true lender" rule, which allows fintechs or other nonbank lenders to offer loans at higher interest rates than the state in which they are licensed by partnering with a bank that is chartered in a state with a higher interest rate cap. The OCC finalized the rule in October.
Paulson wrote lawmakers in April to counteract "misperceptions" surrounding the rule, adding that undoing it would have an "adverse impact."
Sen. Chris Van Hollen, D-MD, introduced a resolution in March to revoke the rule using the Congressional Review Act. Senate Banking Committee Chairman Sherrod Brown, D-OH, also called for the OCC to revoke the rule, saying it was "rushed through."
"I want to make sure that we distinguish the forest from the trees, that changed circumstances due to the pandemic are considered, and that all alternatives are evaluated," Hsu said Monday.
Hsu may also address the fair access rule, which the OCC finalized in January, shortly before then-Acting Comptroller Brian Brooks resigned. The regulator paused publication of the rule — which would prohibit banks with more than $100 billion in assets from denying services to gun manufacturers, energy firms and operators of private prisons, among other lines of business — to allow the next confirmed comptroller to review it.
Hsu, in Monday’s statement, may also be referring to the OCC’s revamp of the Community Reinvestment Act, which was finalized in May 2020 without the backing of fellow regulators such as the Federal Reserve and the Federal Deposit Insurance Corp. (FDIC).
The revision to the anti-redlining rule creates new data collection requirements, evaluates banks based on areas where they have significant deposits rather than where their branches are, raises asset thresholds and adds a distinction between small and intermediate-sized banks.
"The review will take into account a full range of views, both external and internal," Hsu said, again not referencing any particular regulation.
"What I love most about bank supervision is that it is dynamic: curiosity, collaboration, and problem solving are valued and key to being effective as things change," Hsu said in Monday’s statement. "The OCC has a well-earned reputation for having strong examiners, an excellent policy shop, and sharp lawyers, supported by a team of dedicated professionals who enable effective operations. We are going to need to build off of that to adapt to today’s challenges and a rapidly changing environment."
