WASHINGTON — Comptroller of the Currency Thomas J. Curry today made the following statement at a board meeting of the Federal Deposit Insurance Corporation (FDIC) on his vote approving the proposed Incentive-Compensation Rule, implementing Section 956 of the Dodd-Frank Consumer Protection and Wall Street Reform Act of 2010. The Comptroller also signed the proposed rule on behalf of the Office of the Comptroller of the Currency (OCC).
Thank you, Mr. Chairman.
Before we vote, I’d like to say a few words about one of the items in the summary agenda package that I think is extremely important. That item is a notice of proposed rulemaking implementing Section 956 of the Dodd-Frank Act, which is intended to address a critical safety and soundness concern that contributed to the financial crisis: compensation structures that misalign incentives and lead to excessive risk-taking by financial institutions.
This proposed rule, which was developed jointly by the OCC, the FDIC, the Federal Reserve Board, the Federal Housing Finance Agency, the SEC, and the National Credit Union Administration, recognizes the important role that compensation plays in the risks that banks and other financial institutions assume. By requiring proper alignment of compensation incentives with an organization’s risk appetite, the rule calls on lending officers and other employees to put the interests of their institution above their own.
The rule will play an important role in helping safeguard financial institutions against practices that threaten safety and soundness, or could lead to material financial loss for the institution. It will also complement the OCC’s Heightened Standards guidelines, which address risk governance at large national banks and federal savings associations.
I’d like to thank the staff at the OCC, the FDIC, and the other agencies for their cooperation and the hard work they’ve done to develop the joint proposed rule.
Let me close by saying that I’m pleased to vote for the joint proposed rule today and that I have signed the joint proposed rule on behalf of the OCC that will apply to national banks, federal savings associations, and federal branches and agencies.