New OCC Boss Outlines Regulatory Agenda

The new head of Office of the Comptroller of the Currency (OCC) has pledged to put climate change and social equity at the heart of the banking regulator’s policy agenda.

Michael Hsu was named acting comptroller of the currency this week by Treasury Secretary Janet Yellen. He will become deputy comptroller when a permanent nominee for comptroller is appointed.

In a statement shared with agency staff, Hsu said: “The pandemic has had a disproportionate impact on vulnerable communities, especially communities of colour and rural communities, and the recovery threatens to leave many of them even further behind.

“Climate change poses new risks and challenges for banks, and we need to make sure they understand those risks and can manage them.”

He said the OCC’s focus would be on solving urgent problems that affected the agency’s mission to ensure a safe, sound and fair banking system.

Technological change and digitalization’s impact on banking were also mentioned. “Complacency about risk-taking is of increasing supervisory concern as we enter a phase of growth and heightened competition,” he added.

Hsu will also announce a review of key regulatory standards, he said, which would consider a range of external and internal views and pandemic-related circumstances.

Hsu is the fourth person to lead the OCC in the past year. Joseph Otting stepped down at the start of June 2020 and was replaced by Brian Brooks. Brooks left the regulator at the start of this year, with chief operating officer Blake Paulson stepping in as acting comptroller since January 14. Paulson has now resumed his COO role.

Prior to joining the OCC, Hsu was as an associate director in the Division of Supervision and Regulation at the Federal Reserve. During his tenure at the Fed, he led the Large Institution Supervision Coordinating Committee (LISCC) program, which supervises global systemically important banking companies operating in the US.

The OCC supervises 1,200 national banks and federal savings associations, which include large, midsize and community banks.