It is likely that Congress
will pass Dodd-Frank technical corrections legislation this year, said OCC
Thomas Curry, adding that some corrections will be a bit more substantive than
technical. But, he assured that the basic legislative framework will not
undergo significant change. Thus, the Volcker Rule and the risk retention rules
currently being finalized by the SEC, CFTC and the banking regulators are not
likely to change much as a result of anything Congress might do. He said that
the Volcker Rule and the risk retention regulations will be finalized in
``relatively short order.’’ He noted that regulators are continuing to work on
the Basel III capital regulation.
Regarding Basel III,
regulators are closely reviewing the comment letters and are especially focused
on the provisions that might have an outsized impact on smaller banks and
thrifts.
Some of the standards set out
in the proposed rulemaking are clearly appropriate for banking institutions of
all sizes, and they belong in the rulemaking. For example, I think most of us
would agree that we should exclude from regulatory capital those instruments
that can’t be trusted to be there when they are most needed to absorb losses.
Likewise, the idea of restricting bonuses and dividend distributions for
institutions that are nearing minimum capital ratios also seems sound.
But other elements are
clearly not appropriate for smaller banks and thrifts, and our proposed
rulemaking reflects that. For example, the counter-cyclical buffer as proposed
applies only to large banks, and, of course, the parts of the proposal related
to the advanced approaches don’t apply to community institutions either. I can
assure you that we are giving very close attention to all of the issues that
have been raised in the comment process, and we are doing our best to craft
rules that will maintain strong capital standards without unduly increasing
burden.