WASHINGTON – Acting
Comptroller of the Currency Julie L. Williams told a House subcommittee today
that consumer disclosure requirements present an opportunity to reduce
regulatory burden while improving the quality of information provided to
consumers.
“Today our system
imposes massive disclosure requirements -- and massive costs -- on financial
institutions, but does not generally produce information consumers find easy to
understand and often lacks the information they most want to know,” Ms.
Williams said in testimony before the House Financial Services Committee’s
Financial Institutions and Consumer Credit subcommittee.
Other areas of consumer
disclosure offer an example. “The
success of the Food and Drug Administration’s “Nutritional Facts” label proves
that it is possible to deliver the information that consumers need and want in
a concise and streamlined form,” said Ms. Williams.
Federal banking
agencies are already employing testing to the interagency project to simplify
GLBA privacy notices -- a project that has the potential to produce more
effective and meaningful disclosures for consumers and reduced burden on
institutions that generate and distribute privacy notices, Ms. Williams noted.
Ms. Williams also
expressed concern that small institutions may not have the resources to absorb
regulatory or overhead expenses without adversely affecting the quality and
delivery of the services they provide.
“We need to recognize
that the risks presented by certain activities undertaken by a community bank
are simply not commensurate with the risks of that activity conducted on a much
larger scale,” Ms. Williams said.
“One-size-fits-all simply may not be a risk-based -- or sensible --
approach to regulation in many areas,” she said.
A distinction needs to
be made between banks based on the size, complexity and scope of their
operations in framing the regulatory approach, according to Ms. Williams.
The role of the OCC and
the other agencies is clear. “We, as
federal banking regulators, have a responsibility to look carefully at the
regulations we adopt, to ensure that they are no more burdensome than is
absolutely necessary to protect safety and soundness, foster the integrity of
bank operations, and safeguard the interests of consumers,” Ms. Williams
said.
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The Office of the
Comptroller of the Currency was created by Congress to charter national banks,
to oversee a nationwide system of banking institutions, and to assure that
national banks are safe and sound, competitive and profitable, and capable of
serving in the best possible manner the banking needs of their customers.