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Plan to Prevent Banks From Seducing Regulators Dies Under Trump - ABI

A high-profile plan to prevent federal watchdogs from getting too cozy with banks they are supposed to police has been scrapped by President Donald Trump’s newest Wall Street regulator, Bloomberg News reported. For years, the Office of the Comptroller of the Currency intended to remove hundreds of examiners who work inside the offices of JPMorgan Chase & Co., Citigroup Inc. and other lenders. In just his second week on the job, OCC chief Joseph Otting nixed the effort. “Upon review, it is not practical to continue the agency’s efforts to move resident examiners out of on-site locations,” said Otting, a former banker. Other reforms, such as regularly rotating supervisors from bank to bank so they don’t spend too long in a particular firm, show that the OCC has taken steps to prevent “regulatory capture,” said Otting, who ran OneWest Bank Group when Treasury Secretary Steven Mnuchin was the lender’s chairman. Factors cited as contributing to the OCC maintaining the status quo include the high cost of Manhattan real estate and the burden examiners would face in slogging back and forth between government offices and Wall Street banks.

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