At a Peterson Institute for International Economics event on June 22, Federal Deposit Insurance Corporation (FDIC) Chairman Martin Gruenberg announced that the FDIC — along with the Board of Governors of the Federal Reserve System (Federal Reserve) and the Office of the Comptroller of the Currency (OCC) — will issue an interagency notice of proposed
On June 22, the Office of the Comptroller of the Currency (OCC) released Version 1.0 of its Asset Management booklet, which provides an overview of sound risk management processes for bank asset management. The OCC will apply this updated booklet to the supervision of community banks engaged in asset management activities.
Version 1.0 is a
At a Brookings Institution event on June 20, Assistant Attorney General Jonathan Kanter, a top antitrust official for the U.S. Justice Department (DOJ or Department), announced that the Department will reassess its approach to bank merger enforcement given current market realities. Specifically, the Department will assess whether the factual and economic assumptions underlying its 1995 Bank Merger Guidelines are adequate to measure today’s competition.
On June 14, the Office of the Comptroller of the Currency (OCC) published the spring edition of its Semiannual Risk Perspective, which discusses key issues facing banks. The good news is that the federal banking system saw historic growth in net interest income in 2022. However, rising interest rates weigh on other aspects of bank performance, such as noninterest income, as mortgage activity continues to slow.
On June 9, the Office of the Comptroller of the Currency (OCC) announced it is requesting information for a proposed annual survey aimed at understanding and measuring the public’s trust in banking and banking supervision. The OCC is inviting various stakeholders to comment on the survey’s scope and ways to track public trust over time.
On June 6, the Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, and Office of the Comptroller of the Currency (collectively, the agencies) issued guidance to banking organizations on managing the risks associated with third party relationships. This final guidance reflects the 82 comment letters the agencies received from banking organizations, financial technology (fintech) companies and other third party providers on the proposed guidance released in July 2021 and replaces each agency’s existing guidance to ensure consistency in supervisory enforcement. While the agencies acknowledge that “[t]he use of third parties can offer banking organizations significant benefits, such as quicker and more efficient access to technologies, human capital, delivery channels, products, services, and markets,” they caution that the use of third parties “does not remove the need for sound risk management.” The agencies emphasize, however, that supervisory guidance does not have the force and effect of law and does not impose any new requirements on banking organizations.
On May 31, the Federal Deposit Insurance Corporation (FDIC) released its First Quarter 2023 Quarterly Banking Profile showing a first quarter aggregate net income of $79.8 billion for its 4,672 insured commercial banks and savings institutions, an increase of $11.5 billion from fourth quarter 2022. In a statement accompanying the release of the Profile, FDIC Chairman Martin Gruenberg stated: “Despite the recent period of stress, the banking industry has proven to be quite resilient. Net income still remains high by historical measures even after deducting one-time transactions, asset quality metrics are favorable, and the industry remains well capitalized.” Chairman Gruenberg did acknowledge, however, that these results include only a few weeks of the banking stress that began in early March. The more lasting effects of recent bank failures may not be fully apparent until after the second quarter.
On May 25, the Office of the Comptroller of the Currency (OCC) announced that it has revised its manual on bank enforcement actions to specifically address banks that exhibit or fail to correct persistent weaknesses. The OCC’s focus is on the larger and more complex banks it supervises.
On May 23, Chairman Martin J. Gruenberg of the Federal Deposit Insurance Corporation (FDIC) delivered remarks at the Cities for Financial Empowerment Fund 2023 Bank On National Conference. One of the focuses of the Chairman’s remarks was on entities that misrepresent the availability of deposit insurance. ”[S]ince 2022, the FDIC has taken action against more than 85 entities that were misrepresenting the nature, extent, or availability of deposit insurance. In some instances, these firms had made misleading claims in connection with crypto assets while others had apparently developed fraudulent websites to trick consumers into believing they were doing business with a bank.”
On April 12, at a roundtable discussion hosted by the Bipartisan Policy Center Federal Deposit Insurance Corporation (FDIC) Vice Chair Travis Hill opined that the following potential regulatory responses to the failure of Silicon Valley Bank and liquidation of Silvergate Bank should be considered.