A principal regulator is a state or federal regulatory organization entrusted with acting as a financial institution’s primary supervisor. In most situations, this is the same organization that provided the financial institution’s first charter authorizing it to exist.
Banks and other financial institutions are required to submit quarterly call reports to their main regulatory body detailing their revenue and general status.
Understanding a Primary Regulator
The Office of the Comptroller of the Currency is the main regulator for national banks (OCC). State banks are accountable to the banking authorities of their individual states, whereas state-chartered banks and bank holding corporations first report to the Federal Reserve Board (FRB).
Office of the Currency Comptroller (OCC)
All national banks, federal savings organizations, and federal branches and agencies of foreign banks are regulated, governed, and overseen by the OCC. The U.S. Department of the Treasury’s OCC is a stand-alone agency.
Unions of Credit
All federal credit unions and state-chartered credit unions are supervised and insured by the National Credit Union Administration (NCUA).
State banks are under the jurisdiction of two federal authorities. Deposits at banks and savings associations, as well as state-chartered banks that are not participants in the Federal Reserve System (FRS), are covered by the Federal Deposit Insurance Corporation (FDIC).
In contrast, the FRB serves as the principal regulator for state-chartered banks that are FRS participants. State banking authorities also keep an eye on banks with state charters.
The OCC is in charge of the most institutions and is by far the largest main regulator. The OCC states that it has the authority to inspect federal thrifts and national banks. Applications for new charters, branches, capital, or other modifications to corporate or banking structures may be approved or denied. Additionally, it has the authority to take regulatory action against national banks and federal thrifts that violate the law or engage in other questionable behavior.
In addition to imposing civil money fines, the OCC has the authority to oust executives and directors, reach agreements to alter banking procedures, and issue stop and desist orders. Additionally, it has the authority to issue business judgments, legal interpretations, and rules and regulations regulating lending, investing, and other activities.
In order to form a single regulatory body, the Office of Thrift Supervision (OTS), the OCC, the FDIC, the Federal Reserve Board of Governors, and the Consumer Financial Protection Bureau (CFPB) amalgamated in July 2011. All federally authorized and state-chartered savings banks and savings and loan organizations were formerly governed by the OCC (S&Ls).