FILE PHOTO: Japan's national flag is seen behind the logo of Mitsubishi UFJ Financial Group Inc (MUFG) at its bank branch in Tokyo, Japan September 5, 2017. REUTERS/Kim Kyung-Hoon
November 8, 2017
By Olivia Oran and Karen Freifeld
NEW YORK (Reuters) – Japan’s Mitsubishi UFJ Financial Group Inc (MUFG) <8306.T> has received approval from the U.S. Office of the Comptroller of the Currency (OCC) to convert state-supervised branches into federally regulated ones, a U.S. spokesman for the bank confirmed late on Tuesday.
As a result, MUFG’s Bank of Tokyo-Mitsubishi UFJ Ltd branches in New York, Illinois, Texas and California will be regulated by federal charters, rather than state, the spokesman said.
MUFG, Japan’s biggest lender, also owns Union Bank in California, which is already regulated by the OCC.
MUFG’s application was driven by its desire to have a single regulator, said a person familiar with the matter, who did not want to be identified.
A spokesman for the OCC declined to comment.
MUFG’s Bank of Tokyo-Mitsubishi UFJ branch in New York has been regulated by New York state’s Department of Financial Services (DFS), which has been known in recent years for its aggressive enforcement.
In 2013, the bank paid $250 million to settle with the New York regulator for stripping information from $100 billion in wire transfers that authorities said could have been used to police transactions with sanctioned countries like Iran.
The following year, the bank paid DFS an additional $315 million penalty after being accused of misleading regulators regarding its transactions with the sanctioned countries.
A spokesman for the New York regulator declined to comment.
The OCC, under Acting Comptroller Keith Noreika, has promoted a deregulatory agenda in an effort to scale back post-crisis financial rules.
It’s unclear whether other state regulated financial institutions are considering moves similar to MUFG.
(Reporting by Karen Freifeld; Editing by Himani Sarkar)