The Office of the Comptroller of the Currency (the "OCC") published its Semiannual Risk Perspective report on the risks facing national banks and federal savings associations with a particular focus on (i) the operating environment; (ii) bank performance; and (iii) regulatory actions.

The report found:

  • Strategic Risk. Strategic risk remains high for many banks, as management teams consider viable business models and search for sustainable ways to generate favorable target rates of return or struggle to implement their strategic plans.
  • Credit Risk. Growing competitive pressures and continued strong credit risk appetites have led some banks to relax underwriting credit requirements and terms.
  • Operational Risk. Operational risk remains high as banks adapt business models, transform technology and update operating processes in order to respond to increasing cyber threats.
  • Compliance Risk. Compliance risk remains high as banks manage Bank Secrecy Act/Anti-Money Laundering risks by implementing changes to policies and procedures in order to comply with new Military Lending Act regulations and mortgage lending requirements.

The report outlined OCC priorities over the next 12 months for large, midsize and community bank supervision. The OCC will continue to address (i) credit risk management, (ii) strategic planning and governance, (iii) operational risk, (iv) compliance, (v) interest rate risk, (vi) matters requiring attention ("MRAs"), and (vii) enforcement actions.

The semiannual report concluded that there has been a general decline in both MRAs and overall enforcement actions against banks. In his remarks, OCC Comptroller Thomas J. Curry noted these positive developments stating:

. . . despite these improving indicators, as regulators, we must remain on guard and our top concerns for the banking system remain strategic, credit, operational and compliance risks.

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