- Chief Compliance Officer and VP of Legal Affairs, Arrow Electronics
By 
Aaron Nicodemus2024-05-29T20:01:00
The acting head of the Office of the Comptroller of the Currency (OCC) favors requiring more mid-sized U.S. banks to conduct the same rigorous recovery planning as the largest banks, part of a lesson learned from the collapse of three mid-sized banks in 2023.
Michael Hsu, in a speech delivered Monday at a European conference, said the issue of recovery planning helps mitigate the too-big-to-fail problem.
“Ensuring effective recovery planning at large banks is especially important given last year’s bank failures in the U.S. and Credit Suisse’s distress and eventual acquisition by UBS,” he said, referring to the fates of Silicon Valley Bank, Signature Bank, and First Republic Bank in the United States and Credit Suisse’s merger with its bigger Swiss rival.
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Compliance departments at financial institutions must become more involved in ensuring their firm’s operational resiliency to address emerging risks, the Treasury Department’s Office of the Comptroller of the Currency said in its semi-annual risk perspective.
Acting Comptroller of the Currency Michael Hsu argued banks should adopt a “strong sense of fairness” to bolster the effectiveness of their compliance programs, particularly regarding lending decisions guided by AI and machine learning tools.
The Office of the Comptroller of the Currency proposed eliminating expedited or streamlined reviews of mergers for national banks and federal savings associations.
The U.S. Supreme Court extended the statute of limitations for businesses attempting to challenge some federal regulations, allowing regulated entities a longer timeline to appeal a decision.
The Supreme Court of the United States overturned a long-held precedent in which courts deferred to federal agencies in interpreting complex or ambiguous regulations–a decision that could make thousands of federal regulations more vulnerable to legal challenges.
Financial institutions would be required to conduct more thorough risk assessments on their anti-money laundering/countering the financing of terrorism programs under a new rule proposed by the Treasury Department’s Financial Crimes Enforcement Network.
