Acting Comptroller Michael Hsu Addresses FDIC Resolution Planning and Supervisory Disclosure

Acting Comptroller of the Currency Michael J. Hsu recently outlined his positions on key Federal Deposit Insurance Corporation (FDIC) board matters, specifically regarding resolution planning requirements and the handling of confidential supervisory information. These policy stances reflect ongoing efforts by federal regulators to strengthen bank resilience and clarify the boundaries of transparency in the U.S. banking system.

What are the recent changes to resolution planning?

The FDIC has focused on refining how large banking organizations prepare for potential failure, a process governed by the Dodd-Frank Act. Acting Comptroller Hsu has emphasized that resolution plans, often called “living wills,” must remain actionable and credible. According to Office of the Comptroller of the Currency (OCC) statements, these plans ensure that if a systemically important financial institution fails, it can be resolved under the bankruptcy code without triggering a broader financial crisis or requiring a taxpayer-funded bailout.

The regulatory focus has shifted toward ensuring that firms maintain sufficient liquidity and operational continuity during a stress event. By voting in alignment with broader interagency goals, the OCC aims to synchronize expectations between the FDIC and the Federal Reserve, reducing the compliance burden on banks while maintaining rigorous safety standards.

How is confidential supervisory information handled?

A primary point of contention in recent regulatory votes involves the disclosure of confidential supervisory information (CSI). Under federal law, CSI—which includes reports of examination and internal regulatory correspondence—is strictly protected to encourage candid dialogue between banks and their examiners.

Acting Comptroller Hsu has supported protocols that balance the public’s interest in bank transparency with the necessity of keeping sensitive examination data private. According to the FDIC’s recent regulatory updates, the agency is working to clarify when and how this information can be shared with third parties or the public. The OCC’s stance is that overly broad disclosure could undermine the effectiveness of the examination process by discouraging banks from sharing proprietary risk data with regulators.

Why do these regulatory votes matter for the banking sector?

These policy decisions determine how much capital and liquidity banks must hold and how much information they must disclose to the public. The following table summarizes the core areas of regulatory focus:

What happens next for bank compliance?

Banks should expect increased scrutiny regarding their operational readiness. The OCC and FDIC are moving toward a more integrated approach for mid-sized and large banks, specifically regarding how technology and cloud-based infrastructure are accounted for in resolution plans.

As the OCC continues to prioritize bank supervision, firms will likely face updated guidance on how to manage third-party risk, which has become a significant factor in recent resolution planning discussions. Compliance officers should monitor upcoming Federal Register notices for finalized rules on information sharing, as these will dictate reporting requirements for the next fiscal year.

Key Takeaways

• Resolution Credibility: Regulators remain focused on ensuring that large banks can be resolved without systemic disruption.
• Information Security: The protection of confidential supervisory information remains a priority to maintain the integrity of the bank-examiner relationship.
• Regulatory Alignment: The OCC and FDIC are working to streamline interagency processes to provide clearer expectations for banking institutions.