Data Show Bank Regulator Goes Easy on Enforcement
March 29: This post has been corrected.
The New York Times business section had a piece over the weekend about a bank regulator called the Office of the Comptroller of the Currency. It points out that while the Federal Reserve has shouldered most of the criticism directed toward bank regulators, because of its relative obscurity, the OCC has escaped much of the scrutiny.
The Times piece focuses mostly on John C. Dugan, the former bank lobbyist who heads the agency. It highlights criticism that Dugan is too pro-bank, and goes back and forth between criticism and Dugan's response:
Mr. Dugan bristles at the notion that he is too easy on banks and says his agency’s record on consumer protection has been “vigorous and sustained.” He says it is a “cheap shot” to suggest that his lobbying years color his viewpoint and that it demeans his employees and his years of public service.
In point-counterpoint situations, what's often helpful is hard data. The Times brings it into the story later on, with statistics on the OCC's formal enforcement orders against banks. Check out the graphic at right.
The OCC has both formal and informal enforcement orders against banks. The Times' chart shows that the agency rarely takes formal enforcement action against banks, and even more rarely doles out actual penalties to the banks in the form of fines, restitutions or refunds to consumers. The agency defended its small number of enforcement actions, saying it works closely with banks to fix problems while they're small, so as not to require stronger measures.
Correction: This post has been corrected to remove language calling the Office of the Comptroller of the Currency a "little known bank regulator."