Support for reviewing Bank Merger Act (BMA) guidelines was cited by a third member of the board of the bank deposit insurance fund, according to his statement issued Tuesday.
Michael J. Hsu, acting comptroller of the currency (and, as the head of the Office of the Comptroller of the Currency [OCC], a member of the Federal Deposit Insurance Corp. [FDIC] Board), said he supports the view of the majority of FDIC Board members that the BMA guidelines are “ripe for review.” He said he was particularly focused on the financial stability “prong” of the guidelines, given large bank merger trends and his own experience during the 2008 financial crisis with too-big-to-fail firms.
“I voted for the Request for Information (RFI) on the BMA due to the inability to reach compromise and urgency on the financial stability issue, which I care deeply about,” Hsu said. “However, I am concerned that legal or procedural quicksand may ultimately limit our ability to act on this issue in a timely manner.”
Hsu added that he believes views of the majority of FDIC Board members should influence the agency’s agenda and actions. “As a Director on the FDIC Board, I will continue to consider each issue on its merits,” he added.
Hsu’s comments follow a joint release issued by two other members of the FDIC Board last week – from FDIC Director Martin Gruenberg and Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra, also a member of the FDIC Board – that stated the FDIC Board had issued the RFI and will take public comments for 60 days following its publication in the Federal Register.
“This marks the beginning of a careful review of the effectiveness of the existing regulatory framework in meeting the requirements of the Bank Merger Act,” according to the joint statement. “Effective implementation of the Bank Merger Act has deep implications for the safety and soundness, financial stability, community accountability, and competitiveness of the banking system. We strongly support this Request for Comment.”
However, following the release of that declaration, the FDIC issued its own statement. “The FDIC has longstanding internal policies and procedures for circulating and conducting votes of its Board of Directors, and for issuing documents for publication in the Federal Register,” the statement reads. “In this case, there was no valid vote by the Board, and no such request for information and comment has been approved by the agency for publication in the Federal Register.” It was presented without attribution to any FDIC agency official or staff member.
The link to the statement on the agency’s website is no longer in use. The statement had been emailed and then posted on the website last week.