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  • OCC issues update to Comptroller’s Handbook

    Agency Rule-Making & Guidance

    On July 23, the OCC issued Bulletin 2018-20, which announced revisions to the “Capital and Dividends” booklet of the Comptroller’s Handbook as mandated by the Economic Growth, Regulatory Relief, and Consumer Protection Act. The revised booklet—which applies to all OCC-supervised bank examinations—includes changes to the regulatory capital rule, reflects the integration of the OTS into the OCC, and includes expanded examination procedures for capital, dividends, and capital adequacy.  

    Agency Rule-Making & Guidance OCC Comptroller's Handbook Examination S. 2155

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  • OCC issues updates to Comptroller’s Handbook

    Federal Issues

    On June 28, the OCC issued Bulletin 2018-18, which revises and updates certain booklets of the Comptroller’s Handbook. Among other things, the revisions and updates (i) clarify the applicability of each booklet to community, midsize, and large banks: (ii) incorporate Uniform Interagency Consumer Compliance Rating System revisions; (iii) provide asset management and Bank Secrecy Act/Anti-Money Laundering/Office of Foreign Assets Control risk assessment examiner guidance to ensure consistency with the Federal Financial Institutions Examination Council BSA/AML Examination Manual’s appendixes J and M; (iv) incorporate relevant aspects of the Dodd-Frank Act; (v) clarify the roles of banks’ boards of directors and management; and (vi) “include revised concepts and references regarding third-party risk management; new, modified, or expanded bank products or services; and corporate and risk governance.” The revised booklets are: Bank Supervision Process, Community Bank Supervision, Compliance Management Systems, Federal Branches and Agencies Supervision, and Large Bank Supervision.

    Federal Issues OCC Comptroller's Handbook Bank Secrecy Act Anti-Money Laundering Dodd-Frank Third-Party OFAC

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  • OCC updates Comptroller’s Handbook to include Military Lending Act booklet

    Agency Rule-Making & Guidance

    On May 11, the OCC issued the “Military Lending Act” (MLA) booklet of the Comptroller’s Handbook. According to the announcement, the booklet reflects the 2015 Department of Defense amendments, as well as the interpretive guidance published in 2016 and updated in 2017 (covered by InfoBytes here and here), and applies to the examinations of OCC-supervised institutions that establish consumer credit products covered by the MLA. The booklet includes, among other things, (i) rules for determining fees and charges included in the calculation of the military annual percentage rate (MAPR); (ii) rules for calculating the MAPR; (iii) required disclosures to be provided to covered borrowers; and (iv) consumer credit limitations for covered borrowers.

    Agency Rule-Making & Guidance OCC Military Lending Act Comptroller's Handbook Department of Defense

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  • OCC updates Comptroller’s Handbook to include recovery planning standards for large financial institutions

    Agency Rule-Making & Guidance

    On April 26, the OCC released the “Recovery Planning” booklet as part of its Comptroller’s Handbook. The booklet explains the purpose of effective recovery planning and provides guidance for OCC examiners to use when assessing the “appropriateness and adequacy of [a] covered bank’s recovery planning process and the integration of that process into the covered bank’s overall risk governance framework.” According to the OCC, unless determined otherwise, a bank is subject to the Recovery Planning guidelines if the bank has average total consolidated assets of (i) $50 billion or more; (ii) less than $50 billion, if the bank was previously a covered bank; or (iii) less than $50 billion, if the OCC determines that the bank is highly complex or otherwise presents a heightened risk. Recovery plans are designed to identify triggers and options for responding to a range of “severe internal and external stress scenarios” for the purpose of timely restoring financial strength and viability, and should, among other things, include measures to reduce risk as well as strategies to develop and maintain plans specific and appropriate to the size and complexity of the covered bank. The booklet states that recovery plans “may not assume or rely on any extraordinary government support.”

    Agency Rule-Making & Guidance OCC Comptroller's Handbook Risk Management

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  • OCC Updates Community Bank Supervision Comptroller's Handbook

    Federal Issues

    On November 3, the OCC announced an update to the “asset quality core assessment procedures” in its Community Bank Supervision Comptroller’s Handbook (Handbook). Among other things, the revised Handbook:  (i) updates concentration risk management procedures and stress testing guidance for community banks; (ii) incorporates procedures for credit underwriting assessments; (iii) enhances appraisal, evaluation, allowance, and credit review examination procedures; and (iv) updates the asset quality references and standard request letter.

    Federal Issues Banking OCC Community Banks Risk Management Stress Test Comptroller's Handbook

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  • OCC Updates Comptroller's Handbook to Include New Corporate and Risk Governance Booklet

    Consumer Finance

    On July 29, the OCC released the “Corporate and Risk Governance” booklet to update, consolidate, and rescind various booklets in the Comptroller’s Handbook. The new booklet is intended to provide examiners with a summary of corporate and risk governance, related risks, the board’s and management’s respective roles and responsibilities in corporate and risk governance, and examination procedures. The new booklet identifies the following as the primary risk categories associated with corporate and risk governance: (i) strategic; (ii) reputation; (iii) compliance; and (iv) operational. The booklet advises banks to maintain corporate and risk governance structures and practices that align with their changes in size, risk profile, and complexity. According to the booklet, an effective corporate and risk governance framework is key to the safe and sound operation of a financial institution and stimulates public confidence in the financial system.

    Examination OCC Risk Management Comptroller's Handbook

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  • OCC Updates Comptroller's Handbook to Include New Student Lending Booklet

    Consumer Finance

    On May 9, the OCC updated its Comptroller’s Handbook to include a new booklet titled “Student Lending.” Despite banks having to alter their private student lending strategies as a result of the 2008 financial crisis, the OCC’s booklet maintains that banks can still benefit from the wider array of consumer products and the broader business model that the private student lending industry offers. The new booklet contains information related to banks’ participation in the private student lending industry, including, but not limited to:

    • Inherent credit, interest rate, liquidity, price, operational, compliance, strategic, and reputation risks in the industry.
    • Unique aspects of private student loans, such as the “significant time lag between loan advances and repayment, and the student borrower’s lack of certainty in finding a stable, reliable primary source of repayment after graduation.”
    • Regulatory expectations for safe and sound operations, cautioning that banks should adhere to the credit underwriting and documentation standards as stated in 12 CFR 30, appendix A, “Safety and Soundness Standards.”
    • Risk management practices, reminding banks that use third parties to market, solicit, or originate private student loans to have in place risk management frameworks that include due diligence in selecting third parties, written contracts that have been vetted for duties, obligations, and responsibilities of all parties (compensation parameters included), and ongoing monitoring and quality assurance programs.

    Designed for examiners to use in their examination and supervision of banks involved in the private student lending industry, the booklet outlines two sets of examination procedures: (i) primary examination, when an examiner’s objective is to “assess risk level, evaluate the quality of risk management, and determine the aggregate level and direction of risk of the bank’s student lending activities”; and (ii) supplemental examination, when examiners “determine whether student lending marketing activities are consistent with the bank’s business plans, strategic plans, and risk appetite, and that appropriate controls and systems are in place before the bank rolls out new products or new-product marketing initiatives.” Finally, the booklet advises examiners reviewing banks’ student lending activities to “remain alert for lending practices and product terms that could indicate discriminatory, unfair, deceptive, abusive, or predatory issues.”

    Examination OCC Student Lending Comptroller's Handbook Risk Management

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  • OCC "Deposit-Related Consumer Credit" Booklet of Comptroller's Handbook to be Amended

    Consumer Finance

    On February 20, the OCC announced that it would be removing the “Deposited-Related Consumer Credit” booklet, originally issued on February 11, from its website. The OCC’s February 11 booklet seemingly required banks to change overdraft protection services, however the agency has since stated that the booklet was not intended to establish new policy. According to the OCC’s website, the agency will “[revise] the booklet to clarify and restate the existing law, rules, and policy.” When the OCC releases its amended version of the booklet, we will update the February 16 Special Alert to reflect the agency's modifications.

    OCC Overdraft Comptroller's Handbook

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  • OCC Updates Mortgage Handbook, Retirement Plan Products Handbook


    On February 7, the OCC issued an updated Mortgage Banking booklet of the Comptroller's Handbook. The revised booklet (i) provides updated guidance to examiners and bankers on assessing the quantity of risk associated with mortgage banking and the quality of mortgage banking risk management; (ii) makes wholesale changes to the functional areas of production, secondary marketing, servicing, and mortgage servicing rights; and (iii) addresses recent CFPB amendments to Regulation X and Regulation Z, as well as other Dodd-Frank related statutory and regulatory changes. The updated booklet replaces a similarly titled booklet issued in March 1996, as well as Section 750 (Mortgage Banking) issued in November 2008 as part of the former OTS Examination Handbook. On February 12, the OCC issued a revised Retirement Plan Products and Services booklet of the Comptroller’s Handbook that (i) updates examination procedures and groups them by risk; (ii) updates references and adds a list of abbreviations; (iii) adds references to recent significant U.S. Department of Labor regulations and policy issuances; (iv) adds a discussion of Bank Secrecy Act/anti-money laundering and Regulation R; and (v) adds a discussion of board and senior management responsibilities regarding oversight of risk management.

    Examination Mortgage Origination Mortgage Servicing OCC Bank Supervision Comptroller's Handbook

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