by Jeff Sovern
Deepak pointed out earlier this month that Julie Williams is stepping down from her position as Chief Counsel of the OCC. Deepak observed that the news is seen as positive by consumer advocates; one graphic illustration of the feelings some have for her appeared in the movie Maxed Out when her image dissolved into a snake. Deepak also linked to a piece calling her the "Lex Luthor of bank regulators." But you might get a completely different impression from the OCC's announcement, which states:
* * * Ms. Williams was an early advocate for the stronger bank privacy policies and more effective protections that are common today. Her career at the OCC has included groundbreaking work ranging from bank interstate operations and bank powers to privacy rights to pioneering the theory, once thought radical, but now readily accepted and applied, that the Federal Trade Commission Act's ban on unfair and deceptive practices may be applied by the banking agencies to protect bank customers. Nearly a decade ago, Ms. Williams pushed for taking a research-based approach to bank disclosures and using consumer testing to improve disclosures by asking in a speech why consumers got better disclosures on a bag of potato chips than when they engaged in what was likely most important financial transaction they would undertake—taking out a mortgage.
In other words, the announcement painted Ms. Williams as a consumer advocate. Nor does it note the OCC's efforts to preempt state anti-predatory laws during her tenure, though Deepak pointed those efforts out (unless the mention in the announcement of her work on "bank powers" refers to preemption, though that's a pretty ambiguous reference). And the announcement's attempt to highlight Ms. Williams's consumer protection accomplishments seems a bit unimpressive for a bank regulator of long duration. The last sentence is about a speech about mortgage disclosures, which would be more significant if the OCC created mortgage disclosures (at the time of the speech, mortgage disclosures were within the Fed's purview; they now are under the CFPB's jurisdiction). While Ms. Williams has indeed expressed strong views about privacy protections, again, the GLB privacy protection rules were formulated by the Fed, not the OCC.
What are we to make of this? A more honest appraisal of Ms. Williams work would have referred clearly to the preemption actions taken by the OCC during her tenure. After all, preemption is the classic lawyer's issue. Surely those actions are more central to Ms. Williams's work than speeches she gave about rules that her agency lacked the power to write. Is the OCC now embarrassed by its preemption position? It is under new leadership. Is Ms. Williams embarrassed by them? That would be plausible after the financial crisis to which they may have contributed, except that the OCC continued to interpret its preemption powers very aggressively after the financial crisis, even interpreting Dodd-Frank Act so favorably to banks that the Treasury Department took issue with the OCC. Is the explanation that preemption is too technical for most people to follow and so doesn't merit mention in this kind of announcement? But wouldn't the people who know about the OCC, or that it has a Chief Counsel, or about bank interstate operations--which got a mention in the press release--be able to understand preemption?
Or is this just a cynical attempt to cast someone who helped banks at the expense of consumers as a consumer protecter?