Warren Presses Bowman, Gould Over Decision to Grant National Charter to Bank Facing Ongoing Enforcement Action

Warren Presses Bowman, Gould Over Decision to Grant National Charter to Bank Facing Ongoing Enforcement Action

"Your decision to approve United Texas Bank's conversion weakens one of Dodd-Frank's basic protections against regulatory arbitrage. The approval opens the door for other banks to seek the same treatment."

Text of Letter (PDF)

Washington, D.C. - U.S. Senator Elizabeth Warren (D-Mass.), Ranking Member of the Senate Banking, Housing, and Urban Affairs Committee, sent a letter to Michelle Bowman, Vice Chair of Supervision at the Federal Reserve Board, and Jonathan Gould, Comptroller of the Currency, raising concerns over the decision to allow the United Texas Bank to convert from a Texas state-chartered bank supervised by the Federal Reserve Board (the Fed) and the Texas Department of Banking to a national bank supervised by the Office of the Comptroller of the Currency (OCC), which would allow United Texas to enjoy weaker enforcement requirements.

The Ranking Member expressed serious concern that this conversion occurred despite United Texas Bank being under a cease-and-desist order related to serious deficiencies of its anti-money laundering and terrorist financing controls.

"The OCC's decision to approve the conversion - and the Fed's failure to object to it - absent a compelling reason directly contradicts the intent of the statute and threatens to reignite a race-to-the-bottom among banking regulators," wrote the Ranking Member.

"Granting United Texas Bank a national bank charter sets a dangerous precedent that gives other banks the green-light to convert their charters to the lowest common denominator regulator rather than fix the serious issues that may put the U.S. financial system at risk… and it highlights the deficiencies in the OCC's process for reviewing charter applications as it has already improperly granted a slew of national trust charters to seemingly ineligible cryptocurrency companies." the Ranking Member highlighted.

The Ranking Member urged the OCC to immediately revoke United Texas Bank's national bank charter, and to further inform the Ranking Member's oversight duties, she requested that Bowman and Gould provide written responses to her questions regarding the decision to approve the conversion.

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