WASHINGTON (Reuters) - Two major bank industry groups said on Tuesday they oppose a congressional proposal to consolidate federal banking supervision into one regulator.
The American Bankers Association and the Independent Community Bankers of America jointly sent a letter to lawmakers saying that maintaining multiple federal regulators provides a helpful range of regulatory perspectives and is a healthy check against any one regulator neglecting its duties.
“A single regulator is only good when it is right,” the letter said. “When wrong, the outcome could be catastrophic.”
Christopher Dodd, chairman of the Senate Banking Committee, last month pledged to move forward with his efforts to consolidate bank supervision into a single federal regulator.
The proposal has drawn criticism from current bank regulators who do not want to lose power, and is more sweeping than what the Obama administration has recommended.
Tuesday’s letter to lawmakers, including Dodd and House Financial Services Chairman Barney Frank, will add to pressure on lawmakers to give up on the consolidation proposal.
Dodd has not yet introduced formal legislation for the consolidation.
His plan would consolidate the Office of the Comptroller of the Currency and the U.S. Office of Thrift Supervision into one regulator. It would also strip direct bank supervision powers from the Federal Deposit Insurance Corp and the Federal Reserve, transferring those powers to the new regulator.
Reporting by Karey Wutkowski; editing by John Wallace.