Tuesday, May 27, 2014

Chairman Hensarling Challenges Regulators on Reputation Risk

House Financial Services Committee Chairman Jeb Hensarling (R-Tex.) has sent letters to four Federal banking agencies (Fed, OCC, FDIC, NCUA) challenging their use of 'reputation risk' as a factor in supervision of depository institutions.

Hensarling wrote that "it would be an abuse of regulatory discretion to use vague, subjective, and unquantifiable indicators like a firm's reputation to justify regulatory outcomes that could not otherwise be justified under an objective CAMELS analysis."

He goes on to write that the introduction of reputational risk "can all too easily become a pretext for the advancement of political objectives."

He poses three questions to the regulators and request that they respond by no later than June 12th.

Below is Chairman Hensarling's letter to NCUA.

Posted by at
Labels: ,

1 comment:

  1. AnonymousMay 28, 2014 at 6:50 AM

    Guess they may have to rename it CRAMELS, or for credit unions just CRAMEL as they have no sensitivity.

    ReplyDelete

Subscribe to: Post Comments (Atom)
 

The content is provided for educational purposes only, with the understanding that neither the authors, contributors, nor the publishers of this site are engaged in rendering legal, accounting or other expert or professional services. If legal or other expert assistance is required, the services of a competent professional should be sought.

Comments appearing in response to articles appearing on this site do not necessarily reflect the views of the ABA. ABA makes no representations regarding the truth or accuracy of commentary or opinions that may be posted in response to the articles that appear on this website.

The inclusion herein of any link to a website, either in the text of an article or in a comment, does not denote any approval, sponsorship, or endorsement by the ABA, and ABA is not responsible for the content or opinions expressed on those linked websites or related commentary. This content is not licensed to third parties sites and is not affiliated with any third party site. Any reference to the author or this content on any third party site on the Internet is not authorized by the ABA.

It is the policy of the American Bankers Association to comply fully with all antitrust laws. Certain discussions should be considered off-limits, including those that contain competitively sensitive data such as price and cost information, or statements that could be construed as reflecting an attempt or desire to control or influence a particular market or markets. Future pricing or other prospective competitive information should never be shared.