Fed Shifts to Remote Oversight of Wall Street Banks--Update
March 13 2020 - 5:50PM
Dow Jones News
By Andrew Ackerman
WASHINGTON -- The nation's biggest banks have fewer government
examiners roaming their hallways as federal regulators temporarily
switch to teleworking to help control the spread of the
coronavirus.
The Federal Reserve has instructed its teams of on-site staff at
firms like JPMorgan Chase & Co. and Goldman Sachs Group Inc. to
work remotely.
"As a precaution, examiners for the largest banks have started
working fully remotely, consistent with existing arrangements," a
Fed spokesman said to The Wall Street Journal.
Two other regulators, the Office of the Comptroller of the
Currency and the Federal Deposit Insurance Corp., said they too are
embracing telework for their supervisors, although only large U.S.
lenders have teams of examiners in residence full time.
Regulators said they can effectively oversee banks without an
on-site presence.
"Regardless of location and onsite presence, the OCC maintains
open and effective channels of communication with its employees and
all of the institutions it oversees to support ongoing and
effective supervision and risk management of the federal banking
system," OCC spokesman Bryan Hubbard said.
Spokesmen for JPMorgan and Goldman Sachs declined to
comment.
Bank examiners peruse records and question executives to
evaluate loans and ensure lenders comply with safety and soundness
regulations. If they spot a problem, they can order banks to fix it
and sanction those that fail to comply.
Regulators consider an on-site presence as necessary to
supervise banks closely, though they can increasingly conduct much
of their day-to-day oversight remotely, say current and former
officials.
Separately on Friday, the OCC, a branch of the Treasury
Department that regulates national banks, urged lenders to consider
waiving late payment fees and ATM fees for consumers affected by
the coronavirus, among other steps. The guidance follows a joint
statement from a larger group of regulators on Monday that called
on banks to be flexible with customers.
"The OCC encourages banks to work with affected customers and
communities," the statement said.
The shift on examiners comes as regulators switch many in-person
meetings with industry representatives to conference calls and
discourage guests from visiting their Washington headquarters,
according to regulators and bank officials.
Regulators are also avoiding large gatherings. For instance, the
Exchequer Club, a group of bank attorneys and industry
representatives, is hosting Mark Calabria, the independent federal
regulator of Fannie Mae and Freddie Mac, on a conference call next
Wednesday instead of a luncheon at the Mayflower Hotel blocks from
the White House.
The Federal Deposit Insurance Corp., which serves as the
front-line regulator to about 3,000 banks, has instructed roughly
2,000 of its examiners to telework for at least two weeks beginning
on Monday, according to a senior agency official.
Typically, the FDIC only is on site at the banks it examines for
a week or two at a time. The agency will forgo onsite visits
through the end of the month unless absolutely necessary, a senior
agency official said.
The Office of the Comptroller of the Currency, which oversees
about 1,200 national banks, plans to "expand the use of telework
for staff on a rotational basis at all of its locations and provide
other workplace flexibilities," according to a spokesman.
It wasn't immediately clear how many Fed employees were affected
by the central bank's decision to relocate its examiners of the
biggest global banks. The OCC's expanded use of telework would
apply to roughly half of its 3,600 employees.
Write to Andrew Ackerman at andrew.ackerman@wsj.com
(END) Dow Jones Newswires
March 13, 2020 18:35 ET (22:35 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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