OCC begins absorption of the OTS
The Office of the Comptroller of the Currency took over supervision of 700 institutions and will absorb between 600 and 700 employees from the Office of Thrift Supervision Thursday. The regulator merger comes under the Dodd-Frank Act. Lawmakers wanted to end the ability of lenders to shop regulators, which Countrywide Financial Corp. did in 2007 by switching from the OCC to the OTS. Just one year after the switch, the failing mortgage giant was forced to sell to Bank of America (BAC) in a fire sale. The OCC issued final rules Wednesday on how it will govern these smaller institutions. For instance, it added language, clarifying that federal savings associations will be subject to the same standards as national banks when determining if a state law obstructs or impairs a bank's powers. The OCC also revised rules on investigations, allowing state attorneys general to bring enforcement actions in court to enforce applicable state laws. After the transition is complete, the OCC will provide a single assessment schedule for both national banks and federal savings associations, which will pay the lesser of the two fees. For assessments charged in September 2012, the OCC will assess fees regardless of charter. Kenneth Clayton, chief counsel for the American Bankers Association said the agency appropriately tightened its process for preemption decisions and the merger will solidify regulations under a single umbrella. "This makes sense in a national economy. An efficient, well-regulated national system makes it easier for banks to grant credit to customers across state lines, promotes job creation and preserves our industry’s competitive structure," Clayton said. "A patchwork quilt of inconsistent state laws drives up the price of financial products and makes consumers’ financial lives more complicated." Write to Jon Prior. Follow him on Twitter @JonAPrior.