OCC Proposes Rescinding Recovery Planning Guidelines for Large Banks

The Office of the Comptroller of the Currency has proposed rescinding its recovery planning guidelines for insured national banks, federal savings associations and federal branches with at least $100 billion in assets.

The agency said in a Monday (Oct. 27) press release that the guidelines, which went into effect Jan. 1, are unnecessary because the OCC expects these institutions to be well managed and have appropriate risk management processes in place.

“Risk management is a dynamic process that involves real-time responses to the facts and circumstances of a stress event or periods of stress,” the OCC said in the release. “Banks should routinely assess and adjust their operations to adapt to evolving risk factors and conditions. Relieving covered banks of the obligation to engage in prescriptive recovery planning activities is consistent with the OCC’s ongoing effort to identify and eliminate unnecessary regulatory burden.”

The OCC requested comments on the proposal from the public and will accept them for 30 days after its proposal is published in the Federal Register, according to the release.

When announcing new guidance and proposed rulemakings on Oct. 6, the OCC said that it aimed to reduce “regulatory burden” for community banks and promote economic growth.

The agency added that it would extend these efforts to other banks as well.

“The OCC is also considering additional steps to enhance flexibility and reduce burden related to model risk management,” the regulator said in an Oct. 6 press release. “This bulletin is just the first step in refining model risk management guidance for all of the OCCs regulated institutions.”

It was reported on Oct. 12 that an upcoming regulatory rollback will likely open up nearly $140 billion in capital for Wall Street lenders. Consultancy Alvarez & Marsal said that the U.S. government has taken a much more bank-friendly stance on regulations since Donald Trump returned to office.

Comptroller of the Currency Jonathan V. Gould issued a statement Monday commending the Federal Reserve Board for its proposal to enhance transparency and public accountability of its annual stress test.

Gould said the current stress testing regime is “too opaque” and that the Fed’s proposal is a step toward “restoring public trust.”

“The OCC also is committed to regulatory transparency, clarity and improved accountability, and is working to ensure these principles are foundational to its approach to the supervision and regulation of the federal banking system,” Gould said.