Primary Regulator: What It Is, How It Works

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Adam Hayes
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Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master's in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem.

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Updated June 22, 2022
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Thomas Brock
Thomas Brock
Reviewed by Thomas Brock
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Thomas J. Brock is a CFA and CPA with more than 20 years of experience in various areas including investing, insurance portfolio management, finance and accounting, personal investment and financial planning advice, and development of educational materials about life insurance and annuities.
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What Is a Primary Regulator?

A primary regulator is a state or federal regulatory agency tasked with being the main supervising entity of a financial institution. In most cases, this is the same agency that issued the initial charter allowing the financial institution to operate.

Banks and other financial institutions must file quarterly call reports that indicate their income and overall condition to their primary regulatory authority.

Key Takeaways

  • A primary regulator is the main supervising body of a bank or other financial institution. 
  • Primary regulators are state or federal regulatory agencies and are usually the same agency that provided the charter that allowed the financial institution to operate.
  • The Office of the Comptroller of the Currency (OCC) is the biggest primary regulator in the country and is responsible for the greatest number of financial institutions.
  • The OCC's responsibilities include approving charters for new banks, taking actions against banks that don't follow laws and regulations, removing officers and directors, giving out cease and desist orders, and issuing civil money penalties.

Understanding a Primary Regulator

For national banks, the primary regulator is the Office of the Comptroller of the Currency (OCC). State-chartered banks and bank holding companies, meanwhile, initially report to the Federal Reserve Board (FRB), while state banks answer to the banking departments of their respective states.

Office of the Comptroller of the Currency (OCC)

The OCC charters, regulates, and supervises all national banks and federal savings associations, as well as federal branches and agencies of foreign banks. The OCC is an independent bureau of the U.S. Department of the Treasury.

Credit Unions

The National Credit Union Administration (NCUA) supervises and insures federal credit unions and all state-chartered credit unions. 

State-Chartered Banks

Two federal agencies share responsibility for state banks. The Federal Deposit Insurance Corporation (FDIC) insures state-chartered banks that are not members of the Federal Reserve System (FRS), as well as deposits in banks and savings associations.  

For state-chartered banks that are members of the FRS, meanwhile, the FRB is the primary regulator. Additionally, state-chartered banks are supervised by state banking regulators.  

Special Considerations

The OCC is by far the biggest primary regulator and is responsible for the largest number of institutions. The OCC notes that it has the power to examine the national banks and federal thrifts. It can approve or deny applications for new charters, branches, capital, or other changes in corporate or banking structures. It can also take supervisory actions against national banks and federal thrifts that do not comply with laws and regulations or that otherwise engage in unsound practices.

The OCC can remove officers and directors, negotiate agreements to change banking practices, and issue cease and desist orders as well as civil money penalties. Moreover, it can issue rules and regulations, legal interpretations, and corporate decisions governing investments, lending, and other practices.

The Office of Thrift Supervision (OTS) was merged with the OCC, the FDIC, the Federal Reserve Board of Governors, and the Consumer Financial Protection Bureau (CFPB) in July 2011 to create one regulatory agency. Previously, the OCC regulated all federally chartered and state-chartered savings banks and savings and loan associations (S&Ls).

Links to the various primary regulators can be found here.

Article Sources
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  1. Congressional Research Service. "Who Regulates Whom? An Overview of the U.S. Financial Regulatory Framework." Accessed Mar. 9, 2021.