WASHINGTON—Acting Comptroller of the Currency Michael J. Hsu today issued the following statement supporting an interagency notice of proposed rulemaking (NPR) on incentive compensation.
Section 956 of the Dodd Frank Act requires six agencies, including the Office of the Comptroller of the Currency (OCC), to jointly adopt a rule or guidelines to govern incentive compensation. The six agencies issued a joint notice of proposed rulemaking on incentive compensation in 2016 but have not yet published a final rule.
Today, I approved an NPR for comment to fulfill Congress’ mandate to address excessive incentive compensation and compensation that could lead to material financial loss, and initiate renewed public dialogue on this topic. The NPR is based on the proposed rule text issued in 2016, which was supported by six federal agencies, with a new preamble that acknowledges developments and supervisory learnings.
The 2016 NPR was the closest the six agencies have come to agreeing on a joint final rule; thus, it is a natural place to start. The financial system has changed significantly since then, and interagency discussions and our supervisory experience have highlighted modifications to the 2016 NPR that would help us fulfill our statutory mandate more effectively. Some of these are discussed in the preamble, including alternatives and questions for commenters. Robust engagement around these issues would be fruitful and is where I would suggest the public focus.
To be clear, this NPR has not been adopted by all six agencies so we are not requesting publication in the Federal Register. We are, however, accepting comments on the proposal and look forward to continuing to engage our interagency peers and the public on how we can most effectively curtail problematic incentive compensation practices.