The United States government has several regulatory bodies dedicated to issues of finance, banking, and the markets. Some of these authorities, such as the Federal Reserve (The Fed) and Securities & Exchange Commission (SEC), may sound more familiar due to their heavy involvement in market concerns and their repeated mentions on the nightly news. Others you might hear about less frequently, even though they may also play a vital role in maintaining the American economy. One such regulatory body is the Office of the Comptroller of the Currency, or the OCC.
The OCC has been in existence since 1863, established during President Lincoln’s administration at the height of the Civil War. At the time, there was no such thing as a national currency. All paper currency in use was issued from so-called “wildcat” banks—state-chartered banks that were authorized to print redeemable bank notes unsupported by gold or silver. The wide variety of different bank notes, and the relative instability of their worth, had proved to be a detriment to the growth of the national economy. The passage of the National Banking Acts in 1863 and 1864 established national banks, whose notes were backed by the United States Treasury and which served the purpose of pushing the wildcat bank notes out of circulation.
Although the OCC was initially established to help fund the Union war effort using these new bank notes, after the war the OCC’s focus was shifted towards regulation of the national banks, in order to fight corruption that would have undermined American confidence in the new system. Today the federally chartered banks handle nearly two-thirds of the capital in the entire commercial banking system in the United States. The OCC monitors several facets of each chartered national bank, including its capital, liquidity, management, community reinvestment, and technological setup, all of which gives the OCC a picture of the bank’s soundness and ability to best serve American consumers. It also oversees foreign banks in the United States and also maintains an office in London to handle activities of American banks overseas.
However, this regular examination of the banking industry is far from the OCC’s only function…in fact, one of the charges of the Comptroller is to increase the efficiency of OCC oversight with the goal of doing less implicit and time-consuming regulation. The OCC also authorizes the banks to offer new products and services, creating necessary competition in the marketplace, and also works to enforce criminal penalties for banks and affiliated institutions that violate anti-terrorism or anti-money laundering laws. Overall, the function of the OCC is to make sure that the banks operate both successfully and scrupulously.
The current Acting Comptroller of the Currency is John Walsh, a long-time public policy expert who has worked in federal government and the private sector focusing on economic and monetary concerns for over 25 years. He succeeded the previous Comptroller, John Dugan, upon the completion of Dugan’s five-year term in August 2010. Walsh has been with the OCC itself since October of 2005.
1. Remember: If you’re vacationing this spring or summer, make sure to set your bills to auto-pay so that you don’t get hit with any lates!
