Apr. 24, 2008 18:56
The Office of the Comptroller Currency (OCC) Creates a New International Supervision Group
Posted by NancyOta under [Finance , International Politics ][ (2) Comment ] | [ (0) Trackbacks ]
The Office of the Comptroller of the Currency (OCC) was established in 1863 as a bureau of the US Department of the Treasury. The OCC charters, regulates and supervises all national banks. Furthermore, it supervises the federal branches and agencies of foreign banks.
Typical to many government agencies, the OCC performs quasi-legislative and quasi-judicial functions. It has the authority to issue agency rules, legal interpretations, and corporate decisions concerning banking, bank investments, bank community development activities, and other aspects of bank operations.
The OCC activities are based upon four objectives: 1) to ensure the safety and soundness of the national banking system; 2) to encourage competition by allowing banks to offer new products and services; 3) improving the efficiency and effectiveness of the OCC; and 4) to ensure fair and equal access to financial services of all Americans.
http://www.occ.treas.gov/aboutocc.htm
Recently, the OCC announced the creation of a new group to focus on international supervision, stating that "International banking issues have grown increasingly important to the OCC and the national banking system."
http://www.occ.treas.gov/ftp/release/2008-37.htm
This could raise several questions concerning increased political administration in private banking issues. Essentially, since the OCC has the authority to pass regulations and enforce them upon national banks, it has the ability to affect how national banks engage in international agreements.
Suppose that the President decides that it does not condone political activity in Cuba. To foreclose investment in tandem with US banks, the President orders the OCC to scrutinize prospective banks who are in communications with Cuban investors. Effectively, without formal action or accountability, the executive can unilaterally prevent private investment activity to further unrelated agendas.
Granted, perhaps that is a very cynical view, but in my opinion it is not that improbable for the Executive to exercise his influence in that matter. Do you agree that this could create an avenue for underhanded political activity in international banking? Or do you think that the creation of the new group on international activity in OCC will ultimately lead to better coordinated and more profitable investment activity while protecting the banking industry within the United States?
submitted by: Brian
The Center for Computer-Assisted Legal Instruction
24/04/2008, 22:29
While I do agree that the OCC's expansion into the international banking sphere could allow the Executive to have a more unfettered role in policy-making in this area that might be considered democratic, I am not troubled by these expanded OCC efforts for two primary reasons. First, the OCC functions as any agency regulation does, meaning that it is subject to court oversight and also can be trumped by Congress in the event that Congress believes the Executive has overreached its boundaries. Second, the constitution vests the Executive with a great amount of authority and control over international policy generally and also banking policy - these two entities merge into the OCC's actions.
29/04/2008, 13:28
Alexandra,
I cannot refute anything that you have said concerning the framework for agencies. I think, however, that agencies don't necessarily operate in ideally. I subscribe to a "realist" view.
For instance, Congress should be able to police the OCC, but how does it practically work? There assessment of OCC will be based upon whether the are following the dictates of the statute. If they discover, that OCC is construing its authority too broadly, Congress may want to amend the statute. We are in a very slow moving system that emphasizes careful and thoughtful lawmaking. It could be very difficult to amend a law that has been in force for many decades.
Congress may then have two viable options. 1. It could bring the head of OCC before a Senate Hearing, and berate them. 2. It could threaten to cut funding. Both of these could be mitigated by a powerful Executive.
So then we are left with judicial review. The problem there is, what standard do we apply? They have to review the OCC according to the statute, which likely gives them a very ill-defined and broad authority to "regulate banking." If Congress intended OCC to have such broad powers, how can Congress judge whether they are or are not in compliance.
I think you made an excellent point about the authority of the executive, and under his power ot executive the laws, he should have influence over an agency. I think in this regard we are both correct: the President should have a lot of influence, but there is a corresponding increase in the possibilty of misuse.