OCC 2019 supervisory op plan targets cybersecurity, CECL, BSA/AML risks, more

A supervision operating plan for fiscal 2019 that includes focus on risk areas such as cybersecurity, the current-expected-credit-loss (CECL) accounting standard and Bank Secrecy Act/anti-money laundering (BSA/AML) compliance was released Tuesday by the Office of the Comptroller of the Currency (OCC).

“The operating plan guides the development of supervisory strategies for individual national banks, federal savings associations, federal branches, and federal agencies (collectively, banks), as well as technology service providers,” the plan states.

The plan, 1 1/2 pages long, is to be used by OCC managers and staff to guide their supervisory priorities, planning, and resource allocations for FY 2019, the OCC said in a press release Tuesday.

OCC says the plan aligns with the agency’s fiscal 2019 – 2023 strategic plan and national risk priorities. In addition to the baseline supervision to assign ratings, the development of supervisory strategies will focus on the following risk areas:

  • Cybersecurity and operational resiliency, with emphasis on maintaining information technology systems and remediating identified concerns.
  • Commercial and retail credit loan underwriting, concentration risk management, credit risk management, and the allowance for loan and lease losses (ALLL), including preparations for the current expected credit losses (CECL) accounting rule.
  • Bank Secrecy Act/anti-money laundering (BSA/AML) compliance, with emphasis on determining whether AML compliance programs keep pace with changing risk environments and regulatory developments.
  • Consumer-compliance related change management process, with emphasis on implementation of regulatory requirements, including the Home Mortgage Disclosure Act.
  • The integrated mortgage disclosure requirements under the Truth in Lending Act and Real Estate Settlement Procedures Act, and the Military Lending Act.
  • Internal controls and end-to-end processes necessary for product and service delivery. This may include emphasis on implementation of new or revised products or strategic partnerships.

OCC says the FY 2019 bank supervision operating plan identifies priorities across each of its Committee on Bank Supervision operating units – the Office of the Chief National Bank Examiner, Compliance and Community Affairs, Large Bank Supervision, and Midsize and Community Bank Supervision. Objectives are similar among the bank supervisory units, but the plan says managers will differentiate bank size, complexity, and risk profile when developing individual bank supervisory strategies.

“CBS operating plans include resources and support for risk-focused examinations of technology and significant service providers that provide critical processing and services to banks,” the plan states. “The OCC will adjust supervisory strategies, as appropriate, during the fiscal year in response to emerging risks and supervisory priorities.”

Periodic updates about supervisory priorities and horizontal risk assessments will be provided in the Semiannual Risk Perspective report, OCC says. That report is published by the OCC National Risk Committee in January and July, drawing on mid-year and year-end data.

OCC Releases Bank Supervision Operating Plan for Fiscal Year 2019

OCC Strategic Plan, Fiscal 2019 – 2023