United States

OCC’s Semiannual Risk Perspective indicates slight change in risks

COMPLIANCE NEWS  | 

The Office of the Comptroller of the Currency (OCC) issued fall Semiannual Risk Perspective, which highlights key risk issues facing banks, as well as the OCC’s supervision priorities. Similar to the spring 2016 report, strategic, credit, operational and compliance risks continue to be areas of top concern.  However, for the fall 2016 report, the OCC has added governance over sales practices as a key risk issue and has changed the characterization of leveraged lending from a key risk issue to an issue requiring continued monitoring.

The report also outlines OCC’s supervisory priorities for the next 12 months. The priorities are divided into two categories corresponding to the OCC’s operating units. In the areas of BSA/AML and regulatory compliance the priorities are:

Large bank supervision

  • Effectiveness of BSA/AML programs and controls to address evolving money laundering schemes, technological changes and the overall money laundering and terrorist financing risk
  • Avoiding BSA/AML strategies that inadvertently negatively impact financial inclusion
  • Compliance with new regulatory requirements, including those relating to capital, liquidity, trading activities, residential mortgages and risk retention
  • Adequacy of change management processes to implement new platforms, technologies and processes required by significant changes to regulatory requirements; including the amended Military Lending Act (MLA), Flood Disaster Protection Act (FDPA) and Home Mortgage Disclosure Act (HMDA)

Midsize and community bank supervision

  • Effectiveness of BSA/AML programs and controls in addressing changing customer profiles, evolving money laundering schemes, technological change and the overall money laundering and terrorist financing risk
  • Adequacy of compliance risk management
  • Effectiveness in identifying and responding to compliance risks created by new products, services or terms
  • Adequacy of change management processes for implementing new platforms, technologies and processes required by significant changes to regulatory requirements; including the rules that implement the MLA, FDPA and HMDA, as well as compliance with the TILA/RESPA integrated disclosure (TRID) requirements