In an opinion article published in the Financial Times on Tuesday, Brian Brooks, Acting Administrator of the Office of the Comptroller of the Currency (OCC), proposed that it is necessary to reset banking regulations in an era of algorithms.
Brooks is currently the head of the U.S. Treasury Department’s Office of the Comptroller of Currency. He compares existing banking regulations with traffic regulations. He further compared driverless cars to a new step in decentralized finance. Brooks wrote: “Just as the original road rules protected us from other drivers, our current banking regulations are mainly to prevent human error.”
Brooks’s overall tone in this letter is full of confidence, and banking regulators have the ability to re-adjust and learn how to assess bias and fraud in algorithms. He stated that this will eventually prove to be easier than trying to eradicate these same problems from human bankers. Brooks concluded:
“Can we usher in a future that eliminates errors, stops discrimination, and provides universal service for all? Optimists like me think so. If regulators, bankers, and policy makers were like automakers 10 years ago Just as bold, how different is the American banking industry today?”
OCC chartered and directed the National Bank. Brooks was the head of Coinbase’s legal team and he has been a major supporter of integrating encryption technology into the national payment system. Under his supervision, the OCC recently authorized the National Bank to run stablecoin payments and nodes.
Brooks is also a proponent of the national concession for non-depository institutions, and the national concession is specifically designed to provide financial technology companies with the opportunity to obtain a national license without having to go through every state in the United States before the end of December. However, state regulators have carried out Fight back and file a lawsuit, mocking their so-called OCC “non-bank concession” as an excessive expansion of the power of the federal government. In today’s opinion article, Brooks may have mentioned these issues related to state regulators, he wrote:
“There is also a risk that, in the absence of federal regulatory clarity, US states are eager to fill this gap and create some inconsistent rules, which hinders the orderly development of the national market.”
Although President Trump nominated Brooks as Administrator in November last year, the Senate has not advanced his nomination. With the new government taking office next week, whether Brooks can continue to serve in the OCC seems to depend on Biden’s nomination.
