Starting in 2018, the Midsize and Community Bank Supervision (MCBS) team of the Office of the Comptroller of the Currency (OCC) will focus on risk analysis, credit underwriting, strategic risk, asset management, operational risk and other objectives. The context of these objectives is as follows:
The incorporation of horizontal initiatives’ core supervisory focal points and participations in LBS-, CBS- and NRC- horizontal initiatives with a focus on training opportunities and efficiencies is a key characteristic of the plan.
High-growth areas, underwriting practices evaluations on renewed or new loans, concentrated portfolios such as commercial real estate, and new products will be areas of focused review for the MCBS team. Assessments in collateral valuation, loan servicing, spillover impact and problem loan workout are expected.
An emphasis on evaluating profitability enhancement through services and products, business model changes and short- and long-term strategies keeping in mind the competitive and economic pressures, as well as the interest rate environment, will be areas of concentration.
The new fiduciary rule, guidance related to investment products and coverage regarding the sales practices and activities of retail nondeposit products are targets of focus.
A continuation of the Federal Financial Institutions Examination Council’s Cybersecurity Assessment Tool to identify, assess and address any gaps in a bank’s cyber resilience is expected. Third-party risk management, information security and data protection are also key focuses. The life cycle of systems development, user awareness programs, bank management’s response to an increase in operational risk and change management plans regarding accounting, regulatory and consumer compliance issues are expected to be assessed.
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