What is the Office of the Comptroller of the Currency?

The Office of the Comptroller of the Currency (OCC) is a federal government agency regulating national banks and federal savings institutions in the United States. The primary objective of the OCC is to guarantee the national banking system's safety and soundness. The OCC employs inspectors who perform onsite assessments of national banks and constantly monitor bank operations. The agency makes regulations and interprets the law regarding management, investments, lending, and other areas of bank operations.

Key Takeaways

The OCC monitors and supervises domestic and international banks in the United States.

The OCC, appointed by the president, is supported by the banks, who must pay examination and processing fees.

The OCC wields considerable authority, including the ability to refuse new bank branch applications, dismiss bank directors, and even initiate supervisory proceedings against institutions.

What is the OCC Responsible for?

The OCC, established by the National Currency Act of 1863, oversees and supervises banks to ensure that their activities meet standard criteria. This government agency is in charge of monitoring a variety of disciplines, including information technology, management earnings, asset quality, capital, and many more. It enforces the Bank Secrecy Act (BSA) by implementing rules that preserve national security, combat money laundering, and prevent criminal conduct within the financial system.

Its objective is to ensure that national banks and federal organizations operate in a safe environment, provide complete access to financial services, treat clients fairly, and follow all applicable rules and regulations.

Aside from carrying out bank safety and soundness tests, the OCC has additional regulatory responsibilities. Among these responsibilities is the assessment of applications for new bank charters and branches. The OCC has the authority to conduct enforcement proceedings against banks that do not follow banking rules and regulations. Under the jurisdiction of the National Bank Act, the OCC can remove bank officials and directors and adopt rules and regulations controlling national banks' investments, lending, and other operations. In addition, the OCC provides textual guidance to the sector through banking circulars, bulletins, and interpretative statements.

The OCC is an independent agency inside the Department of Treasury. Congress does not support the Office of the Comptroller of the Currency. Instead, national banks and federal savings organizations fund the inspections and processing of company applications. The OCC also makes revenue from its investments, mainly US Treasury securities.

The Senate appoints the comptroller for a five-year tenure. In addition, the comptroller serves on the Federal Deposit Insurance Corporation (FDIC) boards and NeighborWorks America.

A Brief History of the OCC

President Abraham Lincoln formed the OCC on February 25, 1863,  when he signed the National Currency Act. The OCC was responsible for running a nationally chartered bank system and producing a central national currency under the National Currency Act. Thousands of banks were established and regulated under its supervision during the following 50 years.

Since its inception, the OCC has undergone several transformations. The foundation of the Federal Reserve System in 1913 expanded its capabilities. It was critical in sustaining economic stability throughout WWI and WWII. Today, the organization is crucial in guaranteeing financial stability and fostering reliable bank innovation.

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The Structure of the OCC 

The OCC operates four district offices around the country, field and satellite offices, and an examination office in London. Bank examiners conduct on-site examinations of national banks and federal savings organizations or thrifts. They supervise the institution by examining its investment and loan portfolios, financial management, capital, earnings, liquidity, and susceptibility to market risk. Examiners also analyze management's capacity to detect and control risk, internal controls, and compliance with applicable rules and laws.

Who is Regulated by the OCC?

  • Banks
The OCC regulates all national banks in the United States. It is the primary bank regulator; it has the authority to regulate, charter, punish, and close any bank that violates its regulations. It oversees and inspects all banks in the United States.

  • Federal savings organizations
The OCC also regulates federal savings associations. Because federal savings organizations provide many of the same services as banks, they must be regulated similarly. The OCC has direct oversight over all federal savings organizations in the United States. Because of the scale of most federal savings organizations, any mismanagement can result in significant consumer harm. The regulator has the authority to enact new rules and penalize federal savings associations.

Banks must have a comprehensive AML compliance program, and reliable AML officer, or a team.

How is the OCC Fighting Against Financial Hazards?

The Office of the Comptroller of the Currency (OCC) has taken a variety of initiatives to strengthen the cybersecurity of the nation's financial sector vital infrastructure, including hosting webinars for community bankers. The government is constantly updating examiner handbooks, procedures, and training materials to ensure that, as threats change, all national banks and federal savings organizations are able to detect cyber hazards and reinforce their risk management and control systems. 

The OCC is an active member of the Financial Services Information Sharing and Analysis Center, which gives improved real-time insight into a wide variety of possible dangers to the sector and the capacity to help in a coordinated response with other government agencies when appropriate.

Finally, the OCC promotes financial system integrity through its inspections of compliance with the Bank Secrecy Act/Anti-Money Laundering (BSA/AML). The Federal Reserve Board of Governors, the Federal Deposit Insurance Corporation, the Financial Crimes Enforcement Network (FinCEN), the National Credit Union Administration, and the Office of the Comptroller of the Currency released a "Joint Statement on Innovative Efforts to Combat Money Laundering and Terrorist Financing" in 2018 to "urge banks to examine, analyze, and, where appropriate, responsibly apply innovative measures to satisfy their Bank Secrecy Act/Anti-Money Laundering compliance obligations.

Sanction Scanner is here to assist you in meeting your duties under the Financial Crimes Enforcement Network, the OCC, and the Bank Secrecy Act. Sanction Scanner delivers regulatory compliance solutions for financial institutions. You may use Sanction Scanner's worldwide sanction data to verify your customers and identify sanctioned individuals. You may also use API connectivity to automate compliance activities and minimize workload. You can contact us for information about our solutions.

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