Three Priorities for Banks This Year

The Office of the Comptroller of the Currency (OCC) released an operating plan today that outlines key objectives that banks need to focus on for the remainder of the year.

The OCC's Committee on Bank Supervision developed the plan, or the Fiscal Year 2016 Mid-Cycle Operating Plan Status Report, that sets forth the agency’s broad supervision priorities and objectives.

The agency’s fiscal year began on October 1, 2015, and concludes September 30, 2016

“The OCC’s operating plan creates the foundation for developing individual bank supervisory strategies and policy initiatives,” said Senior Deputy Comptroller for Bank Supervision Policy and Chief National Bank Examiner Grace Dailey. “Publishing those results promotes transparency and frames our expectations of national banks and federal savings associations going forward."

The agency noted that these strategies are "designed to prioritize risks, achieve supervisory objectives, and effectively use OCC resources." Typically, large bank supervision objectives and midsize and community bank supervision are similar, but strategies depend on the size of the financial institution,complexity, and risk profile.

According to the OCC's plan, here are a few of the supervisory priorities for banks:

1. Compliance

OCC staff will also continue to assess the bank’s effectiveness in complying with consumer laws, regulations, and guidance, which includes the Truth in Lending Act and the Real Estate Settlement Procedures Act Integrated Disclosures Rule requirements and preparation for implementation of the Military Lending Act.

2. Operational Resilience

OCC supervisory staff will review the bank’s adequacy of operational resiliency to information security risks, cybersecurity threats, and third-party relationship risk management. Supervisory staff should continue to implement the Federal Financial Institutions Examination Council’s Cybersecurity Assessment Tool.

3. Credit Risk Management

OCC supervisory staff will evaluate credit risk management, particularly concentration risk management, credit underwriting practices, loan growth strategies, quality of loan policies, allowance for loan and lease losses methodology, and stress testing.

"The OCC will continue to adjust supervisory strategies as appropriate, given meaningful changes in emerging risks and supervisory priorities," the report said.

Click here to view the full report.