Office of the Comptroller of the Currency
The Office of the Comptroller of the Currency (OCC) is an independent bureau within the United States Department of the Treasury that was established by the National Currency Act of 1863 and serves to charter, regulate, and supervise all national banks and thrift institutions and the federally licensed branches and agencies of foreign banks in the United States. The Comptroller of the Currency is Joseph Otting.
Seal of the Office of the Comptroller of the Currency
Logo of the Office of the Comptroller of the Currency
Flag of the Comptroller of the Currency
|Formed||February 25, 1863|
|Employees||3,973 (as of December 2016)|
|Parent agency||Department of the Treasury|
Duties and functions
Headquartered in Washington, D.C., it has four district offices located in New York City, Chicago, Dallas and Denver. It has an additional 48 field offices throughout the United States, and a London office to supervise the international activities of national banks. It is an independent bureau of the United States Department of the Treasury and is headed by the Comptroller of the Currency, appointed to a five-year term by the President with the consent of the Senate.
The OCC pursues a number of main objectives:
- to ensure the safety and soundness of the national banking system;
- to foster competition by allowing banks to offer new products and services;
- to improve the efficiency and effectiveness of OCC supervision especially to reduce the regulatory burden;
- to ensure fair and equal access to financial services to all Americans;
- to enforce anti-money laundering and anti-terrorism finance laws that apply to national banks and federally licensed branches and agencies of international banks; and
- to investigate misconduct committed by institution-affiliated parties of national banks, including officers, directors, employees, agents and independent contractors (including appraisers, attorneys and accountants).
The OCC participates in interagency activities in order to maintain the integrity of the federal banking system. By monitoring capital, asset quality, management, earnings, liquidity, sensitivity to market risk, information technology, consumer compliance, and community reinvestment, the OCC is able to determine whether or not the bank is operating safely and soundly, providing fair access and treatment to customers, and complying with all applicable laws and regulations. The OCC was created by Abraham Lincoln to fund the American Civil War but was later transformed into a regulatory agency to instill confidence in the federal banking system, ensure it operates in a safe and sound manner, and treats customers fairly.
The OCC regulates and supervises about 1,400 national banks, federally-licensed savings associations, and federally-licensed branches of foreign banks in the United States, accounting for more than two-thirds of the total assets of all U.S. commercial banks (as of March 2017).
Other financial regulatory agencies like the OCC include the Federal Deposit Insurance Corporation (of which the Comptroller serves as a director), the Federal Reserve, the Consumer Financial Protection Bureau, and the National Credit Union Administration. The OCC routinely interacts and cooperates with other government agencies, including the Consumer Financial Protection Bureau, Financial Crimes Enforcement Network, the Office of Foreign Asset Control, the Federal Bureau of Investigation, the Department of Justice, and the Department of Homeland Security.
The Comptroller serves as a director of the Neighborhood Reinvestment Corporation, and the Federal Deposit Insurance Corporation.
Preemption of state banking regulation
In 2003, the OCC proposed regulations to preempt virtually all state banking and financial services laws for national banks and their diverse range of non-bank, corporate operating subsidiaries. Despite opposition from the National Conference of State Legislatures, the OCC's regulations went into effect. In Watters v. Wachovia Bank, N.A. 550 U.S. 1 (2007), the United States Supreme Court validated the preemption of state regulations by the OCC, ruling that the OCC, not the states, has the authority to subject national banks to "general supervision" and "oversight":
State regulators cannot interfere with the business of banking by subjecting national banks or their OCC-licensed operating subsidiaries to multiple audits and surveillance under rival oversight regimes.
In Cuomo v. Clearing House Association, L. L. C. 557 U.S. 519 (2009), the Court clarified its decision in Watters, stating that federal banking regulations did not preempt the ability of states to enforce their own fair-lending laws, as "'general supervision and control' and 'oversight' are worlds apart from law enforcement", and therefore states retain law enforcement powers but have restricted "visitorial" powers over national banks.
In October 2013, the OCC released a bulletin, "Risk Management Guidance" mandating that banks assess and manage the risk of all their third-party relationships. The bulletin states that a bank's use of third parties does not diminish its responsibility to ensure that all activities are in compliance with applicable laws. Previously, banks may have monitored only those third-party relationships which posed the greatest risk to them. Under the new guidelines banks must monitor all third-party relationships by adopting risk management processes "commensurate with the level of risk and complexity of its third-party relationships". The document stresses the importance of an effective risk-management process throughout the entire life-cycle of the relationship. This includes: due diligence in third party selection, written contracts, ongoing monitoring of third party performance and activity, contract termination ability, clear risk management roles, documenting and reporting, and independent reviews.
Banks often engage tens-of-thousands of third parties and are unable to effectively manage the associated risk of all their relationships through traditional means. As a result, many banks have adopted external IT solutions to assist their needs. This has rapidly expanded the market for third-party management software solutions.
List of Comptrollers of the Currency
- Hugh McCulloch (1863–1865)
- Freeman Clarke (1865–1867)
- Hiland R. Hulburd (1867–1872)
- John Jay Knox (1872–1884)
- Henry W. Cannon (1884–1886)
- William L. Trenholm (1886–1889)
- Edward S. Lacey (1889–1892)
- A. Barton Hepburn (1892–1893)
- James H. Eckels (1893–1897)
- Charles G. Dawes (1898–1901)
- William Barret Ridgely (1901–1908)
- Lawrence O. Murray (1908–1913)
- John Skelton Williams (1914–1921)
- D. R. Crissinger (1921–1923)
- Henry M. Dawes (1923–1924)
- Joseph W. McIntosh (1924–1928)
- John W. Pole (1928–1932)
- J. F. T. O'Connor (1933–1938)
- Preston Delano (1938–1953)
- Ray M. Gidney (1953–1961)
- James J. Saxon (1961–1966)
- William B. Camp (1966–1973)
- James E. Smith (1973–1976)
- John G. Heimann (1977–1981)
- C. T. Conover (1981–1985)
- Robert L. Clarke (1985–1992)
- Eugene Ludwig (1993–1998)
- John D. Hawke, Jr. (1998–2004)
- John C. Dugan (2005–2010)
- John G. Walsh (acting) (2010–2012)
- Thomas J. Curry (2012–2017)
- Keith A. Noreika (acting) (2017)
- Joseph Otting (2017–present)
- "Office of the Comptroller of the Currency Annual Report : Fiscal Year 2016". OCC.gov. Retrieved May 19, 2017.
- "Office of the Comptroller of the Currency Annual Report : Fiscal Year 2016". Occ.gov. Retrieved May 19, 2017.
- "Proposed Rules : Federal Register Vol 68 No. 150" (PDF). Edocket.access.gpo.gov. Retrieved November 11, 2013.
- Archived October 15, 2008, at the Wayback Machine
- Watters v. Wachovia Bank, N.A., 550 U.S. 1 (Supreme Court of the United States 2007).
- Cuomo v. Clearing House Association, L. L. C., 557 U.S. (Supreme Court of the United States 2009).
- "Third-Party Relationships: Risk Management Guidance". www.occ.gov. October 30, 2013. Retrieved March 21, 2018.
- "OCC standards require strict oversight of third-party relationships - Insights". www.bakertilly.com. Retrieved March 21, 2018.
- "Help and Frequently Asked Questions about National Banks from OCC's". Helpwithmybank.gov. Retrieved November 11, 2013.