June 9, 2005
Julie L. Williams Urges Steps To Reduce Unnecessary Regulatory Burden and Improve Consumer Disclosure
WASHINGTON – Acting Comptroller of the Currency Julie L. Williams told a House subcommittee today that consumer disclosure requirements present an opportunity to reduce regulatory burden while improving the quality of information provided to consumers.
"Today our system imposes massive disclosure requirements -- and massive costs -- on financial institutions, but does not generally produce information consumers find easy to understand and often lacks the information they most want to know," Ms. Williams said in testimony before the House Financial Services Committee’s Financial Institutions and Consumer Credit subcommittee.
Other areas of consumer disclosure offer an example. "The success of the Food and Drug Administration's "Nutritional Facts" label proves that it is possible to deliver the information that consumers need and want in a concise and streamlined form," said Ms. Williams.
Federal banking agencies are already employing testing to the interagency project to simplify GLBA privacy notices -- a project that has the potential to produce more effective and meaningful disclosures for consumers and reduced burden on institutions that generate and distribute privacy notices, Ms. Williams noted.
Ms. Williams also expressed concern that small institutions may not have the resources to absorb regulatory or overhead expenses without adversely affecting the quality and delivery of the services they provide.
"We need to recognize that the risks presented by certain activities undertaken by a community bank are simply not commensurate with the risks of that activity conducted on a much larger scale," Ms. Williams said. "One-size-fits-all simply may not be a risk-based -- or sensible -- approach to regulation in many areas," she said.
A distinction needs to be made between banks based on the size, complexity and scope of their operations in framing the regulatory approach, according to Ms. Williams.
The role of the OCC and the other agencies is clear. "We, as federal banking regulators, have a responsibility to look carefully at the regulations we adopt, to ensure that they are no more burdensome than is absolutely necessary to protect safety and soundness, foster the integrity of bank operations, and safeguard the interests of consumers," Ms. Williams said.