Big Names Walk From OTS and OCC Ahead of Financial Reform
Pending financial reform will create a new consumer financial protection bureau (CFPB) that will focus on the on the extension of credit to consumers in the form of mortgages, credit cards, and other such products. The CFPB will also absorb the Office of Thrift Supervision (OTS) and the Office of the Comptroller of the Currency (OCC). The reform is not law yet, and the above action will take place over a year or so, but in the meantime some big names are leaving the OTS and OCC. Comptroller of the Currency John Dugan notified President Obama today that he plans to leave office on August 14. A source at the OTS also told HousingWire this morning that Montrice Godard Yakima, the face of the bureau's Compliance and Consumer Protection division, "has left for the private sector as her division will likely dissolve." The source did not think personnel would be lost in the change, but rather added to the CFPB. Kevin Mukri, the director for press relations in the OCC, added that attorneys are already working to lay the foundation for the new bureau, though officially, the reform has yet to pass. "Rather than speculate, we will implement accordingly," he said, adding that new financial rule-writing will be starting from scratch, as indicated by Congress. Investment management firm BlackRock noted that the source of funding for all the changes is still up in the air. The revised version of financial reform eliminated the “assessment” on financial institutions over $50bn and hedge funds over $10bn and instead raised Federal Deposit Insurance Corp. (FDIC) premiums and redeployed Troubled Asset Relief Program (TARP) funds. The added FDIC funds stirred the ire of industry groups like the American Bankers Association (ABA), whose president and CEO, Edward Yingling -- also on his way out of office -- warned the fees may harm banks that already paid billions of dollars to keep the FDIC fund strong. There is continuing discussion of a new “Bank Tax” or other measures to reduce the deficit and/or contain costs, according to BlackRock research. Dugan said in his letter of resignation that he felt confident enough in the recovery of the financial sector. His office was a long-time supporter of the reform. “While the financial system continues to face significant challenges, national banks have stabilized, confidence has improved markedly, and institutions are now in a much stronger position to help fund economic recovery,” he wrote. Write to Jacob Gaffney.