+-------+---+-----------------------+-----------+-----------------+---+
| # O   | # |                       |           |                 | # |
|       | # |                       |           |                 |   |
| ##    | # |                       |           |                 |   |
|       | # |                       |           |                 | # |
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|       | C |                       |           |                 | # |
|       | C |                       |           |                 | # |
|       |   |                       |           |                 |   |
|       | 2 |                       |           |                 |   |
|       | 0 |                       |           |                 |   |
|       | 0 |                       |           |                 |   |
|       | 4 |                       |           |                 |   |
|       | - |                       |           |                 |   |
|       | - |                       |           |                 |   |
|       | 5 |                       |           |                 |   |
|       | 9 |                       |           |                 |   |
|       |   |                       |           |                 |   |
+-------+---+-----------------------+-----------+-----------------+---+
|       | * |                       |           |                 |   |
|       | * |                       |           |                 |   |
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|       | * |                       |           |                 |   |
|       | * |                       |           |                 |   |
+-------+---+-----------------------+-----------+-----------------+---+
| ## Co |   |                       |           |                 |   |
| mptro |   |                       |           |                 |   |
| ller  |   |                       |           |                 |   |
| of th |   |                       |           |                 |   |
| e Cur |   |                       |           |                 |   |
| rency |   |                       |           |                 |   |
|       |   |                       |           |                 |   |
| > Adm |   |                       |           |                 |   |
| inist |   |                       |           |                 |   |
| rator |   |                       |           |                 |   |
| > of  |   |                       |           |                 |   |
| > Nat |   |                       |           |                 |   |
| ional |   |                       |           |                 |   |
| >     |   |                       |           |                 |   |
| Banks |   |                       |           |                 |   |
+-------+---+-----------------------+-----------+-----------------+---+
| #     |   | ## Retail Lending     | ## Des    | ##              |   |
| # Sub |   |                       | cription: | Interim Examina |   |
| ject: |   |                       |           | tion Procedures |   |
+-------+---+-----------------------+-----------+-----------------+---+

**TO:** Chief Executive Officers of National Banks, Department and
Division Heads, and All Examining Personnel

During the last several years, the Office of the Comptroller of the
Currency (OCC) has seen significant changes in the retail lending
activities of national banks. For many banks, retail lending has become
a more prominent part of lending activities and a major contributor to
overall profitability. More generally, the mix and complexity of
products that banks offer and the availability of credit to consumers
has expanded. Concurrent with this growth have been changes in the ways
that banks manage their retail portfolios.

In light of these developments, the OCC is issuing the attached Retail
Lending Examination Procedures. The procedures address the various risk
management and control functions that banks need to manage more diverse
and complex portfolios and provide targeted procedures for specific
credit functions and types of retail loans. The procedures also
incorporate the provisions of the interagency *Uniform Retail Credit
Classification and Account Management Policy* (issued in 2000) and the
interagency *Account Management and Loss Allowance Guidance* (issued in
2003).

The Retail Lending Examination Procedures are structured to accommodate
ongoing supervision of all types of retail credit products, and more
comprehensive examinations of high risk or larger, more complex
operations. The procedures are divided into two parts:

-   **Minimum Procedures** -- These procedures are designed to enable
    examiners to assess the bank's exposure to retail credit risk and to
    identify significant changes in the bank's performance, products, or
    markets during supervisory activities. The procedures provide the
    steps necessary for a comprehensive retail lending examination in
    smaller or less complex operations. They also serve as the base
    retail lending procedures for larger or more complex operations.

-   **Supplemental Procedures --** These procedures are organized by
    functional and product-specific areas and include additional testing
    and product-specific procedures. They are targeted to larger, more
    complex operations, as well as to smaller banks whose condition
    requires more comprehensive review.

The OCC plans to incorporate the procedures in an update to the
*Comptroller's Handbook* series at a later date. Until a revised
handbook is issued, examiners should use the attached procedures.
Questions about these procedures may be directed to your supervisory
office or to the Credit Risk Department at (202) 874-5170.

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Barbara J. Grunkemeyer

Deputy Comptroller for Credit Risk

Attachment: [Retail Lending Examination
Procedures](http://www.occ.treas.gov/ftp/bulletin/2004-59a.pdf)

\[http://www.occ.treas.gov/ftp/bulletin/2004-59a.pdf\]