Comptroller of the Currency Jonathan V. Gould voted against a joint resolution plan letter from the Federal Deposit Insurance Corporation and the Federal Reserve Board to American Express and reaffirmed the need for reforms to Dodd-Frank Act Section 165(d) resolution plans, the Office of the Comptroller of the Currency said.
In a statement explaining his vote, Gould said the resolution planning process remains opaque and unfair. "Opacity and uncertainty remain hallmarks of the resolution planning process, and we should not allow them to continue," he said.
Gould said the agencies are telling a non-systemically important bank to address significant concerns with its resolution strategy without detailing those concerns or explaining the potential consequences if they are not addressed. He added that the agencies retain full discretion to take more severe action if the concerns are not addressed in the next plan, and that the options that would likely best protect the company from those consequences are costly to and inappropriate for the organization.
"Although this non-'shortcoming' feedback may appear to be relatively benign, it is continued evidence that the 165(d) resolution planning process remains as unclear and unfair as it was when it began in the early 2010s," Gould said.
He said banks have been pushed too far in structuring themselves to fail, arguing they should instead be built to serve the lending and other financial needs of their communities and customers. He called even raising the specter of large-scale restructuring based on high-level, non-"shortcoming" feedback unacceptable.
Gould said the process is still subject to the faults and abuses he has previously discussed. While the agencies are required by statute to collect and review the company's resolution plan due to its asset size, he said they are not required to deliver feedback unrelated to financial stability concerns. At a minimum, he said, the agencies should revise their joint resolution plan rule so resolution planning does not apply to companies below the current statutory threshold of $250 billion in total consolidated assets.