The Office of the Comptroller of the Currency (OCC) has proposed a rule that would raise the asset threshold for risk management requirements from $50 billion to $700 billion. This alarming proposal would drastically change how our financial system treats and exposes communities to risk, narrowing critical requirements from 45 banks to just the four largest: Wells Fargo, Citibank, Bank of America, and JP Morgan Chase.
The OCC insists risk management procedures are only appropriate for the largest institutions since they are the most complex, but this assumption runs into a familiar pitfall of equating size with complexity. There are certainly banks that fall in the $50-700 billion range that are more unique and complex than the aforementioned traditional banks (case in point, Silicon Valley Bank); banks whose risk management requirements would be significantly lessened by this proposed rule.
A change this drastic would be concerning under normal circumstances, but it is even more so in the current context of broad-scale deregulation of the financial system.
