The nation’s banks hoping to use COVID-19 as an excuse to shutter branches or get permanent concessions from regulators better think again, the Financial Times reported.
Brian Brooks, Acting Comptroller of the Currency, an independent agency within the U.S. Department of Treasury, told the newspaper he was not prepared to revisit the fundamentals of bank regulations as a result of the pandemic. He said rules governing branch closures will stay and bank executives should not expect temporary waivers to continue indefinitely.
“I don’t believe this is the worst thing that’s ever happened in the history of the Republic and so therefore I’m not prepared to revisit the fundamentals of bank regulation,” Brooks told the Times.
Brooks, 50, who held a career in the banking sector including stints at OneWest Bank, has served on the board at Fannie Mae and as chief legal officer at Coinbase, the digital currency exchange headquartered in San Francisco, California.
In May, PYMNTS reported Joseph Otting stepped down from the chancellor post to be succeeded by Brooks, the agency’s chief operating officer.
Brooks told U.S. mayors and governors within days of starting in the job that they were endangering the financial system by locking down economies, the Times reported.
As bank branches closed on a temporary basis and customers increased their use of online banking, some bankers have said privately they hope the pandemic will help them to accelerate branch closures.
In the last decade, the number of branches in the country dwindled by 6 percent, or more than 4,500, according to the Federal Deposit Insurance Corp.
Federal rules require national banks to give the Comptroller’s Office 90 days’ notice of any plans to shut branches, including a detailed explanation for their decision.
“I think the idea of we’ll just go ahead and let branches abandon our cities, I think we’d regret that on the back end of this,” Brooks told the Times.
He also said banks should not use the pandemic to discourage the use of checks, as some executives privately acknowledged they have done by telling customers checks could be disrupted by postal service delays.
“People who want to be allowed to use checks should be,” he said. “Don’t get me wrong there, it is a big deal, but it should not be cover for a whole bunch of unrelated stuff.”