United States

OCC guidance offers banks a good model for choosing consultants

Questions to ask, red flags to watch for


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What should your bank consider when hiring consultants? If you are only looking at experience, resources and fees, you may not be looking far enough. In today’s environment, no matter the nature of the engagement, it pays to consider how well the consultant’s work will hold up to regulatory scrutiny.

 The Office of the Comptroller of the Currency (OCC) recently issued guidance for banks to follow when hiring consultants during an enforcement action. That guidance can serve as a valuable starting point when your bank is considering consultants for any reason.

If the OCC requires a bank to retain a consultant, it requires the bank to perform due diligence around a number of factors, including:

  • Qualifications
  • Independence
  • Resources
  • Expertise
  • Capacity
  • Reputation
  • Information security and document custody practices
  • Risk management and reporting
  • Conflict of interests
  • Financial viability
  • Any professional disciplinary actions

Independence is a key issue, and our whitepaper outlines the seven independence issues that the OCC raises in its guidance. Finally, learn the three key questions and five red flags your bank should consider when hiring consultants.