OCC Comptroller Otting Testifies before Congress
This week, Joseph Otting, head of the Office of the Comptroller of the Currency (OCC) headed to Capitol Hill for a dual round of hearings before the House Committee on Financial Services on Wednesday and the Senate Banking Committee on Thursday. Both hearings allowed Otting to provide an update on the state of the banking industry, which OCC regulates. It was the first time Otting has testified on Capitol Hill as head of the OCC.
In his testimony before both Houses, Otting once again brought up OCC’s bulletin issued back in May that encourages banks to offer short-term, small-dollar installment loans.
“Banks are well suited to offer affordable short-term, small-dollar installment lending options that can help consumers find a path to more mainstream financial services without trapping them in cycles of debt,” Otting said in his testimony. “When banks offer products with reasonable pricing and repayment structures, consumers can benefit from banks’ other financial services such as financial education and the opportunity to build a positive credit record.”
As reported in the Wall Street Journal, Otting’s testimony before the House opened with questions about OCC’s review of bank sales practices following the recent issues with Wells Fargo. He also said that OCC doesn’t plan to reissue a controversial guidance document spelling out standards for banks issuing leveraged loans. As it stands, guidance is just that – standards that banks can follow on a voluntary basis.
Most of the fireworks in both hearings came when Otting was asked about discrimination in the banking industry. Otting said he has “never personally observed” discrimination in banking “but many of my friends from the inner city across America will tell me that it is evident today.” This resulted in backlash from Democrats at the House hearing that was echoed before the Senate.