The Senators expressed three principal concerns about the proposed rules: first, that the proposed rules would impose new responsibilities on a financial institution’s board of directors that may be better suited to senior management, effectively “blur[ring] the lines between the responsibilities of senior management and responsibilities of the [b]oard,” particularly in respect of risk management processes; second, consistent with the criticisms by state supervisors, that some of the rules may conflict with other state and federal regulatory requirements, such as the preference that “risk management functions reside with the firm’s chief risk officer”; and third, the proposed rules would impose “burdensome” corporate governance standards to the smallest banks without any “empirical evidence” that any “discernible benefit” would be obtained. To confirm their findings, the Senators argued that the OCC removed requirements that were found to be analogous from a prior rulemaking ­­­­­­­— yet the FDIC has not.

The GOP Senators requested answers to several questions no later than August 16, such as whether the FDIC plans to amend or withdraw the proposed rules, and what level of engagement the FDIC had with state-based regulators or stakeholders in developing the proposal. The Senators also directed a question to the OCC’s Acting Comptroller regarding whether the OCC still “believes that board or risk committee approval of material policies under the Framework would be burdensome, and that these policies should be approved by management instead.” The Senators requested the FDIC withdraw the NPRM entirely.