Interview: John C. Dugan-Comptroller of the Currency, U.S. Department of Treasury
Wisniowski, Charles, Mortgage Banking
From the time he was sworn in last August as the 29th comptroller of the currency, John C. Dugan hit the ground running with scant time to look back--as his appointment scheduler would likely attest.
Comptroller of the Currency Dugan is the top administrator of national banks and chief officer of the Office of the Comptroller of the Currency (OCC). The OCC supervises 1,900 federally chartered commercial banks and about 50 federal branches and agencies of foreign banks in the United States, comprising almost three-quarters the assets of the commercial banking system.
The comptroller also serves as a director of the Federal Deposit Insurance Corporation (FDIC), the Federal Financial Institutions Examination Council (FFIEC) and the Neighborhood Reinvestment Corporation (NRC).
Dugan has served in a wide variety of positions in both government and the private sector. Most recently, he was a partner at the law firm of Covington & Burling in Washington, D.C., where he was coordinator of the firm's Financial Institutions Group, specializing in financial institution regulation.
He also served as assistant secretary of the Treasury for domestic finance during the administration of President George H.W. Bush. Before joining the Treasury Department, he was minority general counsel to the Senate Committee on Banking, Housing, and Urban Affairs.
Dugan's agency--in concert with the Federal Reserve, the FDIC, the Office of Thrift Supervision (OTS) and the National Credit Union Administration (NCUA)--released proposed guidance on nontraditional mortgage products (see Mortgage Banking, February 2006, page 9).
Mortgage Banking caught up with Dugan as he marked six months on the job as OCC's chief. He shared his thoughts about OCC's mission as well as the proposed new guidance.
Q: As you have had time to settle in and take stock of your new office, can you describe your vision for the OCC? Specifically, what do you think works and what aspects of the agency do you seek to improve?
A: My vision for the agency [comes from] the expanded role of national banks in our economy over the last 20 years. Now, with assets approaching $4 trillion and 70 percent of the assets of the banking system, national banks are playing an increasingly key role in the economy and our agency is [playing] an increasingly key role in bank supervision.
As I look at that, I break down what I see as important overall themes in several categories. One, of course, always a primary concern for the OCC, is safety and soundness.
The second is balanced supervisory judgment. Third is fostering innovation. Fourth is fairness. The fifth is excellence--by excellence, I mean that it is incumbent upon the OCC to continue its long tradition of maintaining excellent staff throughout the agency, to address the unique risks and the challenges we face as an agency over time.
Q: What programs or initiatives have you implemented, or do you intend to implement, to guide those improvements?
A: Well, let me just take the excellence point first. Given the increased amount of assets flying into the national banking system and the increased responsibilities we have, I have made it a priority to make sure that we have appropriate staff at all levels to address these risks--particularly newer, more challenging risks that our larger institutions are taking.
So we will both be increasing the number and depth of our staffing. We also will continue the role that the OCC has played over a period of years--what I would describe as an innovative role of integrating our economists with our supervisors in the day-to-day aspects of supervising, particularly our largest institutions.
In terms of balance, I think what we're trying to do in our Bank Secrecy Act [BSA] program of compliance is a good example of how we're trying to strike the right balance between requiring banks to have reasonable programs in place, but to apply those in a consistent, even-handed manner that recognizes the importance of judgment and does not impose a zero-tolerance rule, as some have suggested has been the case. …