Anonymous 4

I am a commissioned FDIC examiner who has examined banks ranging from 1 composite to 5 composite, less than $100 million to over $25 billion in TA, across many different states and territories, some banks with no recommendations and some under C&D orders, some highly ethical management teams and others containing alleged fraudsters, etc. The singular most poignant conclusion that I have come to in my career is that humans are endlessly optimistic and shockingly shortsighted. If the goals of those revising the regulations are to dilate the pool of acceptable risk in U.S. financial institution activities and absolve bank management of the consequences of their decisions, then by all means, adjust the ratings factors as proposed. But, at least be transparent and say that is the underlying intention. Have we forgotten why these ratings factors were developed in the first place? Travis Hill may think these regulations are 'adapting to the times,' but he forgets that history repeats itself consistently and without fail. Banking regulation has 'adapted to the times' shortly before each of the major recession/depressions over the past 100 years. It appears we have forgotten that risk management practices are the first and last line of defense that keep capital, earnings, and liquidity levels satisfactory. It appears we have forgotten that there hasn't been a single bank failure in history unattributed to management decision-making. I urge you to reflect on the amount of poverty and suffering the world could have avoided if we simply required more stringent risk management processes related to uninsured deposit levels, mortgage underwriting and MBS securitization, and asset/liability interest rate risk. There is no question that FDIC, FRB, and OCC regulations are stale. However; rather than entirely dissolve sections related to risk management processes, increase clarity into what level of materiality meets the threshold for supervisory recommendations and other regulatory responses. Bank management should not have to deal with examiners recommending policy limits on activities the bank does not even participate in; however, the American people also should not have to worry about whether their job and life savings are at risk. This is especially true when the life savings of the majority of Americans are already insufficient for both their day-to-day expenses and retirement. Are these proposed regulation changes truly to 'even the keel' or is it to comply with pressure for enabled greed? I urge policy makers to reflect on the radical changes proposed and seek a more pragmatic regulatory middle ground.