John Dugan speaks:
JOHN C. DUGAN
COMPTROLLER OF THE CURRENCY
COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS
UNITED STATES SENATE
March 19, 2009
It would not have the benefits of onsite examination and supervision and the very real leverage that bank supervisors have over the banks they regulate. That means, we believe, that compliance is likely to be less effective. Nor would this approach draw on the practical expertise that examiners develop from continually assessing the real-world impact of particular consumer protection rules – an asset that is especially important for developing and adjusting such rules over time. More troubling, the ingredients of this approach – registration, licensing and reliance on enforcement actions to achieve compliance with standards – is the very model that has proved inadequate to protect consumers doing business withn state regulatedn mortgage lenders and brokers.
Finally, I do not agree that the banking agencies have failed to give adequate
attention to the consumer protection laws that they have been charged with
implementing. For example, predatory lending failed to gain a foothold in the banking
industry precisely because of the close supervision commercial banks, both state and
national, received. But if Congress believes that the consumer protection regime needs to be strengthened, the best answer is not to create a new agency that would have none of the benefits of a prudential supervisor. Instead, the better approach is a crisp Congressional mandate to already-responsible agencies to toughen the applicable standards and close any gaps in regulatory coverage. The OCC and the other prudential bank supervisors will rigorously apply them.
But I remember him thusly:
OCC ruling and federal pre-emption of state regulatory rules, in addition to national banks chartering myriad state based subsideriaries.