WASHINGTON, D.C.— Shayna Olesiuk, Director of Banking Policy, issued the following statement in connection with today’s filing of a comment letter to the Office of the Comptroller of the Currency (“OCC”) on community bank digitization: 

“Community banks are a vital component of the U.S. banking landscape. Unlike megabanks that operate thousands of branches across multiple states and earn much of their income from trading and financial market-related activities, community banks are distinguished by the unique combination of banking services they provide and how they do business. 

“We applaud and support the OCC’s request for information on the benefits and costs of community bank digitalization in detail. Advocating for community banks’ continued development in areas related to digitalization is vital because it offers the potential for long-term benefits to both banks and local communities. But it is also critical to balance this enthusiasm with a clear recognition of the risks and costs of digitalization. Indeed, a community bank that takes on too much digitalization too quickly or exposes itself and its customers to unknown or excessive risks for which it does not have the skills or systems to manage or control could face devastating effects, including potential failure of the bank.  

“Better Markets urges regulators to ensure that bank boards are able to uphold their vital oversight role; banks be held to strong third-party risk management standards; artificial and machine-learning technology be well-managed; and crypto activities be approached cautiously given the proven risks to the financial system. Better Markets likewise cautions regulators to ensure that they have appropriate staffing and expertise to oversee the development of digitalization at community banks.” 

The Comment Letter is available here. 

### 

Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies—including many in finance—to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.org.