Independent Banker - October 2017 - 50

spearhead reform. A holdover from
the previous administration currently
leads the Consumer Financial
Protection Bureau.
At the moment, the prudential
regulators don't have significant
pending regulations on which they
must act. However, as Karen Thomas,
ICBA senior executive vice president,
government relations and
public policy, explains,
" The expectation is once
we have new personnel
" Each agency has
an approach to
examination and
supervision that a
change in personnel
at the top of the
agency could impact
and influence. "
-KAREN THOMAS, ICBA
in place at these agencies, there is
a significant amount of regulatory
relief that they could provide without
legislation. " Yet the longer it takes to
have new personnel in place at each
agency, the longer the delay in the
expected regulatory relief.
The prudential regulators jointly
issue many regulations. It usually
takes all three of these agencies-the
OCC, Fed and FDIC-to implement
changes. For example, regulatory
capital rules are issued jointly by
the OCC, Fed and the FDIC and can
be amended without legislation.
Currently, mortgage servicing assets
are treated unfavorably, and highvolatility
commercial real estate has
a high risk-weight under the capital
rules, Thomas explains. These are
both areas for which agencies could
provide relief. In fact, the agencies
announced at the end of August
that " they are developing a proposal
that would simplify the capital rules
to reduce regulatory burden, particularly
for community banks. That
proposal would simplify the capital
rules' treatment of mortgage servicing
assets and other items. "
The OCC, Fed and FDIC each
supervise different banks. The
OCC oversees national banks;
the Fed supervises state
banks that are members of
the Federal Reserve System;
and the FDIC supervises
state nonmember banks.
" Each agency has an approach
to examination and supervision
that a change in personnel at the top
of the agency could impact and influence, "
Thomas says.
There has been some movement in
filling vacant posts. The Senate Banking
Committee held confirmation
hearings before Congress's August
recess and in September voted to
approve both Randal Quarles as Fed
vice chairman for supervision and
Joseph Otting as head of the OCC.
With Congress having faced many
critical issues in September, timing on
final confirmation is hard to predict.
Federal Reserve
President Trump nominated Quarles,
a former undersecretary of the
Treasury in the George W. Bush
administration, to serve on the
Federal Reserve Board as vice chairman
of supervision. As such, Quarles
will likely lead all of the regulatory
changes affecting bank supervision.
While the entire board of governors
would vote on any regulatory
changes, as vice chairman for supervision,
Quarles will heavily influence
the direction of the regulation and
the supervisory approach.
50 ICBA IndependentBanker October 2017
Office of the Comptroller
of the Currency
Trump's nominee for OCC head is
Joseph Otting, former president and
CEO of $12 billion-asset OneWest
Bank, which Treasury Secretary
Steven Mnuchin founded. As with
Quarles, the Senate Banking Committee
voted to advance Otting's
nomination to the floor for a full
Senate confirmation.
Under the National Bank Act, the
president has considerable leeway to
appoint an acting comptroller of the
currency when the office is vacant.
In May, Washington banking lawyer
Keith Noreika was appointed acting
comptroller and will remain in the
position until Otting's confirmation
by the Senate. Noreika recently said
he was requesting public input about
how to more precisely delineate what
the Volcker Rule proscribes.
FDIC chair
Current FDIC Chairman Martin
Gruenberg's term ends in November.
President Trump's choice to head
the agency, James Clinger, one-time
chief counsel of the House Financial
Services Committee, withdrew his
nomination in July, citing familyrelated
obligations. There have been
other names mentioned, but as of this
writing, nothing has solidified.
This setback is likely to delay
Trump's plan to pull back DoddFrank.
Clinger was one of a
triumvirate of nominees-Quarles as
vice chairman for supervision at the
Federal Reserve, Otting for comptroller
of the currency and Clinger at the
FDIC-that would have ensured a
tapering of Dodd-Frank.
Fed community banker's seat
Many potential candidates for
this position have been stymied by
requirements that the candidate
Independent Banker - October 2017

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