Noting an environment of “high” strategic and operational risk, the OCC outlined nine priorities for midsize and community bank supervision in 2015 in its Semiannual Risk Perspective report.
The OCC said its examiners will focus on strategic planning, corporate governance, stress testing for banks with more than $10 billion in assets, operational risk management, cybersecurity, underwriting practices in certain portfolios where the agency has observed slippage, interest rate risk, compliance and “fair access.”
These priorities respond to increasing credit risk as competition for loans picks up, evolving cyber threats, more frequent data breaches and sluggish earnings. The OCC noted that overall return on equity for federally chartered banks is down year over year, although smaller banks’ ROE has improved and now almost matches that of larger banks.
Read the report.