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The Risk Management Flash - Vol 1 Issue 2

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A summary of risk management developments for regional and community financial institutions

Topics Covered in this Issue

  • OCC 2019 Supervision Priorities
  • The Role of Supervisory Guidance
  • Treasury Releases FinTech Report
  • Final Rule Implements Extended Exam Cycle for More Banks
  • Complaints Management System
  • Bank Culture Reform
  • FinTech Charter and Global Sandbox / GFIN
  • Community Bank Supervision
  • BSA Compliance Supervision
  • Regulators Issue Proposed Rule Regarding Treatment of HVCRE
  • American Institute of Certified Public Accountants National Conference on Banks & Savings Institutions Conference Recap
  • The Institute of Internal Auditors Financial Services Exchange Conference Recap
  • Center for Financial Professionals Operational Risk Management USA Recap
  • Interest Rate Risk: Managing for Today & Planning Ahead for Future Challenges
  • Credit Risk: Strategy Execution

OCC 2019 Supervision Priorities


The Office of the Comptroller of the Currency (OCC) recently released its bank supervision operating plan for fiscal year 2019 identifies the focus of each of the agency’s supervisory operating units for the new federal fiscal year starting on Oct. 1. Overall, the OCC will develop supervisory strategies for cybersecurity and operational resiliency, commercial and retail credit underwriting and concentration risk management, and Bank Secrecy Act (BSA) compliance management and change management due to new regulations. The agency added a new risk focus: monitoring internal controls and end-to-end processes for how banks deliver products and services, as well as how they implement new products and strategic partnerships. The 2019 plan does not include a focus from the prior year on business model sustainability and strategy changes. See link to 2019 plan.

The Role of Supervisory Guidance


The primary financial regulatory agencies (The Federal Reserve, Consumer Financial Protection Bureau, Federal Deposit Insurance Corporation, National Credit Union Association and OCC) clarified the role of supervisory guidance in bank supervision, noting that it does not have the force and effect of law and affirmed that supervisory guidance is intended to outline expectations and general views regarding appropriate practices for a given subject area, meaning they would not pursue enforcement actions based upon such guidance.

The agencies highlighted additional ongoing efforts to clarify policies and practices related to supervisory guidance. Specifically, the agencies said they would: limit the use of numerical thresholds or bright-lines when outlining expectations in supervisory guidance; not criticize institutions for violations of supervisory guidance; strive to reduce the issuance of multiple guidance documents; and continue working to clarify the role of supervisory guidance in communications with exam teams and supervised institutions. The agencies also noted that seeking public comment on guidance does not signal that the guidance is intended to have the force and effect of a regulation or law. See joint guidance statement.

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