JPM JP Morgan Chase and Co

By Andrew Ackerman 

WASHINGTON -- The nation's biggest banks have fewer government examiners roaming their hallways as federal regulators temporarily switch to teleworking to help control the spread of the coronavirus.

The Federal Reserve has instructed its teams of on-site staff at firms like JPMorgan Chase & Co. and Goldman Sachs Group Inc. to work remotely.

"As a precaution, examiners for the largest banks have started working fully remotely, consistent with existing arrangements," a Fed spokesman said to The Wall Street Journal.

Two other regulators, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp., said they too are embracing telework for their supervisors, although only large U.S. lenders have teams of examiners in residence full time.

Regulators said they can effectively oversee banks without an on-site presence.

"Regardless of location and onsite presence, the OCC maintains open and effective channels of communication with its employees and all of the institutions it oversees to support ongoing and effective supervision and risk management of the federal banking system," OCC spokesman Bryan Hubbard said.

Spokesmen for JPMorgan and Goldman Sachs declined to comment.

Bank examiners peruse records and question executives to evaluate loans and ensure lenders comply with safety and soundness regulations. If they spot a problem, they can order banks to fix it and sanction those that fail to comply.

Regulators consider an on-site presence as necessary to supervise banks closely, though they can increasingly conduct much of their day-to-day oversight remotely, say current and former officials.

Separately on Friday, the OCC, a branch of the Treasury Department that regulates national banks, urged lenders to consider waiving late payment fees and ATM fees for consumers affected by the coronavirus, among other steps. The guidance follows a joint statement from a larger group of regulators on Monday that called on banks to be flexible with customers.

"The OCC encourages banks to work with affected customers and communities," the statement said.

The shift on examiners comes as regulators switch many in-person meetings with industry representatives to conference calls and discourage guests from visiting their Washington headquarters, according to regulators and bank officials.

Regulators are also avoiding large gatherings. For instance, the Exchequer Club, a group of bank attorneys and industry representatives, is hosting Mark Calabria, the independent federal regulator of Fannie Mae and Freddie Mac, on a conference call next Wednesday instead of a luncheon at the Mayflower Hotel blocks from the White House.

The Federal Deposit Insurance Corp., which serves as the front-line regulator to about 3,000 banks, has instructed roughly 2,000 of its examiners to telework for at least two weeks beginning on Monday, according to a senior agency official.

Typically, the FDIC only is on site at the banks it examines for a week or two at a time. The agency will forgo onsite visits through the end of the month unless absolutely necessary, a senior agency official said.

The Office of the Comptroller of the Currency, which oversees about 1,200 national banks, plans to "expand the use of telework for staff on a rotational basis at all of its locations and provide other workplace flexibilities," according to a spokesman.

It wasn't immediately clear how many Fed employees were affected by the central bank's decision to relocate its examiners of the biggest global banks. The OCC's expanded use of telework would apply to roughly half of its 3,600 employees.

Write to Andrew Ackerman at andrew.ackerman@wsj.com

(END) Dow Jones Newswires

March 13, 2020 18:35 ET (22:35 GMT)

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