On May 25, the OCC issued a revised version of its policies and procedures regarding bank enforcement actions. The revisions, which are found in a new Appendix C, address the OCC’s consideration of supervisory and enforcement actions against banks that exhibit “persistent weaknesses” and appear to further remarks delivered by Acting Comptroller Hsu earlier this year regarding what he described as the “too-big-to manage (TBTM) problem.” Viewed in the context of those remarks, Appendix C appears to deliver a stark warning that the OCC is prepared to use even its most severe tools, including mandated divestitures, to address the “TBTM problem.” In addition, although the revisions do not purport to constrain the OCC’s discretion in any given case, they may be viewed as providing guideposts for banks of all sizes by articulating a presumption of increasingly severe enforcement measures and a potential time period against which “persistence” may be gauged.
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