Jonathan Gould, the nominee to head up the Office of the Comptroller of the Currency, pledged to “shine a spotlight” on any de-banking activities during a Senate Banking Committee nomination hearing Thursday.
Gould, an OCC veteran, was nominated by President Donald Trump in February to serve as the comptroller of the currency; the agency is now led by Acting Comptroller Rodney Hood.
A partner at law firm Jones Day, Gould spent roughly three years as senior deputy comptroller and chief counsel of the OCC during the first Trump administration and the Biden administration. He’s also served as a lawyer for the Senate Banking Committee.
Republican senators including the committee’s chair, Tim Scott of South Carolina, sought to ensure Gould is aligned with recent banking agency moves away from reputational risk. Gould said he agreed with Hood’s decision to stop examining banks for reputational risk, and said he aims to ensure de-banking is not allowed in the banking system.
“I think too often reputation risk is used as a pre-text for other motives, and I think the regulators have at their disposal other forms of more easily quantifiable and just better understood, more precise, more objective terms, including litigation risk, [Bank Secrecy Act/anti-money laundering] compliance risk,” Gould said during the hearing.
In his opening statement, Gould advocated for allowing banks “to engage in prudent risk-taking.”
“In the years since 2008, bank regulators have at times tried to eliminate rather than manage risk, frustrating the ability of banks to fulfill their function,” he told the committee. “This blinkered approach to risk management has implications for the cost and availability of credit, the system’s ability to absorb shocks, and its adoption of new technologies and embrace of innovation.”
Gould said his top priorities would include “depoliticizing the banking system,” improving supervision, embracing innovation and ensuring banks support the economy.
“I will do everything in my power to ensure the continued relevance of our national banking system and its ability to support our national economy consistent with the President’s vision,” he told the committee.
With regard to digital asset innovation, Gould said during the hearing that many such activities are “clearly legally permissible,” and he hopes to engage on ways they can be done in a safe and sound manner. Gould did a stint as chief legal officer at blockchain firm Bitfury.
Sen. Elizabeth Warren, D-MA, expressed concern over Gould’s record as the OCC’s chief counsel during the first Trump administration, worrying that he “may pursue a Wall Street deregulatory agenda, block states from exercising their rights to protect their citizens from predatory practices by national banks, and let large banks off the hook when they violate the law.”
Warren, the committee’s ranking member, also said Gould’s current role representing national banks raises questions about his ability to avoid conflicts of interest in leading the OCC.
In a letter to Gould on Tuesday, Warren peppered him with more than 100 questions that sought to parse his thoughts on bank regulation, supervision and enforcement; merger reviews; cryptocurrency assets; states’ rights; regulatory independence in the context of Department of Government Efficiency actions; and ethics and conflicts of interest.
“Given your record at the OCC, I fear a return to rubber stamping deals,” Warren wrote to Gould on merger reviews. “It is especially troubling given that a mega-merger application to create the largest credit card bank in the country, Capital One’s acquisition of Discover, would be sitting on your desk.”
During the hearing, Gould voiced support for tailored approaches to regulation and supervision. When Sen. Thom Tillis, R-NC, asked what needs to be done in the wake of the Silicon Valley Bank failure, Gould pointed to improving bank supervision.
“There seems to have just been a failure to focus on the material, financial risk embedded with that bank’s balance sheet and its unique business model,” Gould said. “This is risk management 101, and the fact that it was overlooked by both the California regulator and the San Francisco Fed is really deeply disturbing.”
At the hearing, senators also questioned Paul Atkins, the nominee to chair the Securities and Exchange Commission, and Luke Pettit, nominee for assistant secretary of the Treasury Department. Atkins, who fielded more questions from Democrats than Gould did, pledged to make digital asset regulation a priority.
“Ambiguous and non-existent regulations for digital assets create uncertainty in the market and inhibit innovation,” he said. “A top priority of my chairmanship will be to work with my fellow commissioners and Congress to provide a firm regulatory foundation for digital assets through a rational, coherent and principled approach.”
