OTS Strategic Plan 2003-2008 August 26, 2003

 

 

Strategic Plan (2003 – 2008) 

for the Office of Thrift Supervision

Mission Statement: To supervise savings 

associations and their holding companies 

in order to maintain their safety and 

soundness and compliance with consumer 

laws, and to encourage a competitive 

industry that meets America’s financial 

services needs.
 

OTS Strategic Plan 2003-2008 August 26, 2003

Table of Contents

Page

OTS’s Mission, Overview, and Guiding Principles 1

Strategic Goals and Issues 3

Program

Strategic Goals

Key Strategic Issues

Vitality of the Thrift Charter

Emergency Preparedness

Partnerships on Cross-cutting Issues 6

Accomplishing OTS Strategic Goals

Goal 1: A safe and sound thrift industry 7

Goal 2: A flexible legal and regulatory framework that enables the 

thrift industry to provide a full competitive array of financial 

services. 9

Goal 3: Fair access to financial services and fair treatment of thrift 

customers 11

Goal 4: A professional and motivated workforce that provides 

exceptional service to its customers and supports 

achievement of OTS business goals. 13

Key External Factors Affecting Achievement of Goals 15

Appendices:

A. Strategic Management Process 17

B. Relationship Between OTS and Treasury Goals 18

C. Program Evaluations 19

D. Means to Accomplish Strategic Goals 21

E. Data Capacity 25

F. Challenges and Consultations 26
From the Director 

l am pleased to present OTS’s Strategic Plan for fiscal years 2003 - 2008. The Plan sets forth 

the strategies and activities that OTS will use to help ensure a safe and sound, competitive, and 

profitable thrift industry that meets the needs of the American people. 

The thrift industry plays a major role in nurturing the American dream of home ownership. 

Financing the purchase of homes has been the focus of thrift institutions throughout their 

history. Thrifts continue to do an excellent job of promoting homeownership by making 

residential mortgage financing readily available. 

Housing is one of the principal drivers of the American economy and accounts for more than 20 

percent of annual gross domestic product (GDP). Thrifts are major players in this arena and 

make a significant contribution toward our nation’s GDP. As of December 2002, thrift 

investments related to residential mortgages accounted for 67.5 percent of industry assets, 

While mortgages are the driving and stabilizing force for most thrifts, the federal thrift charter 

has evolved and now offers considerable flexibility to serve other market niches. Thrifts can 

offer a full range of lending products, including small business and other commercial, farm, 

construction, land development, credit card, education, and auto loans. 

Thrifts are diverse in terms of size and scope. They range from small, one office, mutually 

owned institutions to large, sophisticated, publicly traded thrifts with hundreds of offices. 

Currently the largest OTS-regulated thrift has assets exceeding $240 billion, with the next 

largest institution at $76 billion. At the other end of the spectrum, there are 24 thrifts with assets 

of under $10 million. 

OTS begins this strategic planning period with a healthy and robust thrift industry. As of June 

2003, there were 947 thrifts with total assets of $1.06 trillion. Approximately 99.5 percent of the 

industry was well capitalized, and no thrift was less than adequately capitalized. 

OTS supervises 956 savings and loan holding companies in 516 corporate structures. Over 

half of all thrifts and 90 percent of total thrift assets are owned by holding companies. The 

holding company structures control approximately $6 trillion in consolidated assets and vary 

widely in their operations and structure. More than 100 structures are engaged in significant 

lines of business other than banking such as insurance, financial services, retailing, and 

manufacturing. 

We will monitor our progress and performance on the strategies and goals outlined in this Plan 

and make appropriate modifications as new challenges arise and the industry evolves. 

OTS Strategic Plan 2003-2008 August 26,2003 
 

OTS Strategic Plan 2003-2008 August 26, 2003

Notification of Where to Send Comments or 

Questions

Comments or questions regarding OTS’s draft Strategic Plan

 should be sent to:

Timothy T. Ward

Chief Financial Officer

Office of Thrift Supervision

1700 G. Street, N.W.

Washington, D.C. 20552

Comments can also be e-mailed to Mr. Ward at:

timothy.ward@ots.treas.gov
 

OTS Strategic Plan 2003-2008 1 August 26, 2003

OTS’s Mission, Overview, and Guiding Principles

Mission 

To supervise savings associations and their holding companies in order to maintain their 

safety and soundness and compliance with consumer laws, and to encourage a 

competitive industry that meets America’s financial services needs.

Overview 

Established by Congress as a bureau of the Department of the Treasury on August 9, 1989, 

OTS charters, examines, supervises, and regulates federal savings associations. OTS’s primary 

statutory authority is the Home Owners’ Loan Act (HOLA) originally enacted in 1933. OTS also 

examines, supervises, and regulates state-chartered savings associations belonging to the 

Savings Association Insurance Fund (SAIF) and provides for the registration, examination, and 

regulation of savings association affiliates and holding companies. 

The federal thrift charter allows the thrift and its subsidiaries, as well as its holding company and 

other affiliates, to operate under a single consolidated regulator. In this respect, OTS is unique 

among the federal banking agencies. The charter also provides the flexibility to engage in a 

wide variety of activities while focusing primarily on retail banking and home mortgage, 

consumer, and small business lending.

Condition of the Thrift Industry

 

As of June 2003, there were 947 thrifts with combined assets of approximately $1.06 trillion. 

The financial condition of the thrift industry is strong. Over 99.5 percent of the industry is well 

capitalized, and as of June no thrift was less than adequately capitalized. A stable economy, a 

generally hospitable interest rate environment, sound lending and investment practices, and 

effective regulation, including strengthened capital standards, aided this strong performance. 

Thrifts reported record earnings and capital for 2002 and for the first two quarters of 2003. 

OTS Operations

OTS is headquartered in Washington D.C. with four regional offices located in Jersey City, 

Atlanta, Dallas, and San Francisco. The headquarters’ office develops nationwide policies and 

programs for the agency and coordinates the operations of OTS. The regional offices examine 

and supervise institutions, and process most applications. Approximately 75 percent of OTS’s 

staff of 900 employees work in regional offices.

The President, with Senate confirmation, appoints a Director of OTS for a 5-year term. OTS’s 

Director also serves on the boards of the Federal Deposit Insurance Corporation (FDIC) and the 

Neighborhood Reinvestment Corporation. 
 

OTS Strategic Plan 2003-2008 2 August 26, 2003

OTS funds its operations through periodic assessments charged to the thrift industry and 

receives no appropriated funds from Congress. In 1998, OTS amended its assessment 

regulation to: 1) establish an assessment structure that keeps assessments rates as low as 

possible while providing OTS with the resources necessary for effective supervision, and 2) 

more equitably correlate assessments to supervision costs. 

Guiding Principles 

These principles guide the mission and operations of OTS and support our core values:

Integrity Internal and external actions are conducted with the highest degree of 

honesty and fairness, fostering confidence in OTS by the public, the 

thrift industry, and its employees.

Professionalism OTS values its employees as critical assets to achieve excellence in 

regulating the thrift industry. Flexible human capital strategies ensure 

a talented staff ready to meet regulatory challenges in a productive and 

satisfying work environment. OTS’s staff works in an environment built 

on trust, respect, teamwork, communication, creativity, diversity, and 

empowerment.

Efficiency OTS is committed to excellence and efficiency. Management provides 

quality-focused leadership and technical excellence to enable OTS to 

meet its regulatory responsibilities in a cost-effective and timely 

manner.

Partnerships OTS works with other financial institution regulators to achieve 

consistency in policy and regulation. We seek to minimize regulatory 

burden to the extent consistent with effective supervision.

Responsiveness OTS listens to, learns from, and collaborates with the institutions it 

regulates and the public it serves on how best to address their needs. 

OTS addresses industry and individual risks in a proactive, efficient, 

and effective manner. 
 

OTS Strategic Plan 2003-2008 3 August 26, 2003

Strategic Goals and Issues

Program 

OTS’s program is to ensure a safe and sound thrift industry. Over 83 percent of its resources 

and revenues are used to achieve this goal. 

Strategic Goals

Four strategic goals guide the operations of OTS and directly support the mission and goals of 

Treasury:

ß A safe and sound thrift industry. 

ß A flexible legal and regulatory framework that enables the thrift industry to 

provide a full competitive array of financial services.

ß Fair access to financial services and fair treatment of thrift customers.

ß A professional and motivated workforce that provides exceptional service to its 

customers and supports achievement of OTS business goals.

Key Strategic Issues

Through examinations, OTS assesses the financial condition and risk profile of thrift institutions 

and identifies violations of law and regulation and potential financial and economic problems. 

To combat fraud, money laundering, and financial crimes, thrifts are reviewed during exams for 

compliance with the requirements of the Bank Secrecy Act, the USA PATRIOT Act, and other 

anti-money laundering laws. 

Examinations help to prevent development or continuation of unsafe operating practices and to 

effect timely resolution of problems or weaknesses, including those related to consumer 

protection and the Community Reinvestment Act (CRA). To enhance our ability to effectively 

regulate the thrift industry, OTS began the process of combining the safety and soundness and 

compliance examinations in 2002. Integrated examinations are tailored to the risk-profile of the 

institution incorporating procedures that assess both the institution’s safety and soundness and 

its compliance management performance.

OTS attends meetings of the Basel Committee for Banking Supervision as the committee 

considers revisions to the Basel Capital Accord. The committee is updating and revising the 

original Capital Accord to make the capital standards required of internationally active financial 

institutions more comprehensive and risk sensitive. OTS has requested permanent 

membership on the Basel Committee. OTS has actively worked with the other U.S. federal 

banking regulators to develop proposed changes to domestic capital standards. OTS and the 
 

OTS Strategic Plan 2003-2008 4 August 26, 2003

other U.S. federal banking regulators are seeking comment from U.S. banks and thrifts on the 

potential impact of the domestic proposal that would implement the new accord. 

OTS has also initiated contact with the European Union to discuss the agency’s role as the 

primary supervisor of consolidated thrift holding companies. The European Union issued a 

Financial Conglomerate Directive (FCD) that requires equivalent supervision of conglomerates 

that operate in multiple financial services sectors (insurance and banking or securities). OTS 

believes that its supervisory process for internationally active thrift holding companies is 

consistent with the principles outlined in the FCD.

In 2003, the federal financial regulatory agencies began a three-year effort to obtain suggestions 

from the industry and public on more streamlined and less burdensome ways to regulate. The 

interagency Economic Growth and Regulatory Paperwork Reduction Act (EGRPRA) project will 

review regulations for unnecessary burden.

Vitality of the Thrift Charter

Financing the construction and acquisition of homes has been the focus of thrift institutions 

throughout their history, which dates to the first half of the 19th century. Today, thrifts remain a 

major player on the front end of the mortgage process. Thrifts promote homeownership by 

making residential mortgage financing readily available. In addition, the charter is used 

extensively by some thrifts to make small business and consumer retail loans. This builds on 

the charter’s strength and versatility. 

The vitality of the federal thrift charter is attributable to three factors. First, the charter meets the 

demand for a broad range of consumer lending products. Second, it permits thrifts to operate

nationally through uniform standards and one organization. Third, it allows the thrift and its 

subsidiaries, as well as its holding company and other affiliates, to operate under a single 

consolidated regulator. The federal thrift charter is the preeminent vehicle for institutions that 

focus on providing home mortgages, consumer loans, and other retail banking products. 

Emergency Preparedness

In the post – September 11th world, disaster contingency planning and preparedness are key 

strategic issues. OTS participates on the Financial and Banking Information Infrastructure 

Committee (FBIIC) that is chaired by the Treasury Department which works with the Department 

of Homeland Security and the Office of Cyberspace Security to improve the reliability and 

security of the financial industry’s infrastructure. Thrifts’ continuity of operations and emergency 

preparedness plans are reviewed during examinations.

OTS’s emergency preparedness plan and a Continuity of Operations Plan (COOP) protect our 

employees and buildings and help ensure we continue to function in the event of an emergency. 

The plans cover succession order and backup capabilities in addition to problem assessment, 

damage control, evacuation, and communications.

To communicate with the industry, OTS collected emergency contact information from each of 

its regulated institutions. OTS’s Extranet, a website accessible only to OTS and its regulated 

institutions, will allow for information-sharing between the agency and industry. Through FBIIC, 
 

OTS Strategic Plan 2003-2008 5 August 26, 2003

OTS can maintain secure communications with the financial regulators and other critical 

financial service sector entities. 

In the event of a major disaster affecting Washington, D.C., OTS’s COOP provides for full 

backup operations to be run from a regional office. This includes IT functionality, as well as 

backups for supervisory functions, external affairs, and other critical functions. The regional 

offices have also implemented backup plans.
 

OTS Strategic Plan 2003-2008 6 August 26, 2003

Partnerships on Cross-cutting Issues

OTS works closely with the four other federal banking agencies: the Board of Governors of the 

Federal Reserve System (FRB), the Office of the Comptroller of the Currency (OCC), the 

Federal Deposit Insurance Corporation (FDIC), and the National Credit Union Administration 

(NCUA) to achieve consistency in policy and regulation and to address common issues. To 

enhance our supervisory effectiveness, OTS participates with the following groups:

1. The Federal Financial Institutions Examination Council (FFIEC), composed of members 

of each of the five federal banking regulatory agencies, prescribes uniform principles, 

standards, and report formats for the examination of insured depository institutions. The 

FFIEC identifies emerging issues in the financial institutions industry and coordinates 

supervisory activities with other regulators and through the Conference of State Bank 

Supervisors (CSBS). OTS’s Director, James Gilleran, began a two-year term as 

Chairman of the FFIEC on April 1, 2003. OTS chairs the FFIEC’s Task Force on 

Compliance. 

2. The Basel Committee on Banking Supervision provides a forum for international 

cooperation on matters relating to supervision. The Committee is updating and revising 

the Basel Capital Accord to make the capital standards required of internationally active 

financial institutions more comprehensive and risk sensitive. OTS attends Basel 

Committee meetings to ensure that issues affecting the thrift industry are properly 

considered in our domestic regulatory processes. OTS is seeking membership on the 

Basel Committee similar to that granted for the other U.S. federal banking regulators.

3. The interagency Shared National Credit Program performs a uniform credit review of 

financial institution loans that exceed $20 million and are shared by three or more 

financial institutions. The banking agencies are members.

 

4. The Financial and Banking Information Infrastructure Committee (FBIIC) strives to 

improve the reliability and security of the U.S. financial system and to protect against 

disruption of critical information systems. The Treasury Department chairs FBIIC and 

works with the Department of Homeland Security and the Office of Cyberspace Security 

to secure the financial industry’s critical infrastructure. Members of the FBIIC include the 

five banking agencies as well as other federal and state agencies that have regulatory 

responsibilities for financial services.

5. The GPRA Interagency Working Group shares best practices and discusses issues 

related to the common goals and objectives of the federal financial regulatory agencies. 

Members of the group include the five banking regulators, OFHEO, and the SEC. 

6. OTS, along with the Treasury Department, the other federal banking regulators, and 

various law enforcement agencies and personnel, regularly and actively meet to discuss 

strategies and goals for implementing the Bank Secrecy Act (BSA) and its implementing 

regulations.

7. OTS regional offices work closely with the other banking agency regional offices to 

coordinate information sharing and consistent regulation.
 

OTS Strategic Plan 2003-2008 7 August 26, 2003

Accomplishing OTS Strategic Goals

Strategic Goal 1: A safe and sound thrift industry.

Through the examination process, OTS assesses the financial condition and risk profile of thrift 

institutions and identifies and addresses unsafe and unsound practices and violations of law and 

regulation. Through the off-site monitoring process, OTS regularly monitors the financial 

performance of individual institutions and the industry enabling early identification of emerging 

trends or problems. OTS ensures that its staff is well trained to identify and address current and 

emerging risks and that examiner guidance is appropriate and current. 

OTS uses over 83 percent of resources and revenues to achieve this critical strategic goal that 

directly supports the mission of the agency.

Performance Goals

1. Ensure that OTS-regulated thrifts operate in a safe and sound manner through effective 

supervision. 

2. Maintain a thrift industry that is sufficiently capitalized.

3. Conduct examinations in an efficient and effective manner.

Strategies for Achieving Performance

1. Ensure that OTS-regulated thrifts operate in a safe and sound manner through 

effective supervision.

a. Perform ongoing evaluation of the examination and supervision process to ensure 

timely identification of new or emerging problems, timely and appropriate supervisory 

or enforcement actions to remedy identified problems, appropriate follow-up and 

corrective actions, and adequacy of examiner guidance with consistent application of 

such guidance. 

b. Enhance the agency’s capacity to monitor, identify, and assess individual and 

systemic risk factors affecting the thrift industry. 

c. Conduct periodic discussions with the OTS Director, Deputy Director, and other senior 

staff in Washington on risks and strategies for supervising high-risk institutions, and 

nontraditional institutions, including diversified holding companies. 

d. Encourage a high level of communication with the industry and share information on 

industry best practices and emerging risks.
 

OTS Strategic Plan 2003-2008 8 August 26, 2003

e. Provide training for examiners and examination support staff to identify and deal with 

emerging issues and risks, such as those associated with new financial instruments, 

electronic banking, and new types of trust activities.

f. Review thrift institutions’ compliance with the requirements of the Bank Secrecy Act, 

including the USA PATRIOT Act, OFAC, and other anti-money laundering laws.

g. Review thrifts’ continuity of operations and emergency preparedness plans during 

examinations.

h. Participate on the FBIIC to improve the reliability and security of the financial 

industry’s infrastructure.

2. Maintain a thrift industry that is sufficiently capitalized.

a. Conduct on-going monitoring of capital levels and earnings performance and 

implement timely corrective actions to minimize the occurrence of, and promptly 

resolve, inadequately capitalized institutions.

b. Attend Basel Committee for Banking Supervision meetings as the group updates and 

revises the Basel Capital Accord to make capital standards required of internationally 

active financial institutions more comprehensive and risk sensitive. Participate with 

domestic federal banking regulators in the careful development and implementation of 

any prudent changes to the domestic regulatory capital regulatory structure.

3. Conduct examinations in an efficient and effective manner.

a. Continue tailoring supervisory examinations to the risk profile of the institutions, 

including the development of a new top-down, risk-focused procedures for compliance 

management and streamlined examination procedures for small, noncomplex, well 

rated institutions, while effectively allocating resources to oversee and assess the 

safety and soundness and consumer compliance record of thrift institutions. 

b. Enhance OTS’s overall efficiency and effectiveness by combining the safety and 

soundness and compliance examinations. In melding these examinations, OTS 

ensures that compliance standards do not compromise safety and soundness and 

that safety and soundness standards do not undermine compliance.

c. Increase interagency cooperation in areas common among the FDIC, OCC, and OTS; 

the agencies may share training and work to reduce costs without abrogating their 

individual primary regulatory responsibilities.

d. Enhance information and examination support systems. 
 

OTS Strategic Plan 2003-2008 9 August 26, 2003

Strategic Goal 2: A flexible legal and regulatory framework that enables the 

thrift industry to provide a full competitive array of financial services.

OTS strives to reduce the regulatory burden on thrifts while maintaining effective supervision by 

improving the application process, maintaining the current assessment rates, and supporting the 

ability of federal thrifts to operate under uniform national standards. OTS has significantly 

reduced the amount of on-site examination time, redesigned regulations to make them easier to 

understand, and eliminated unnecessary restrictions.

OTS receives no appropriated funds from Congress but funds its operations through periodic 

assessments charged to the thrift industry. Annually OTS analyzes its operating costs and 

compares them to the assessments it charges thrifts in order to achieve an assessment 

structure that keeps assessment rates as low as possible while providing OTS with the 

resources necessary for effective supervision.

OTS is implementing a multi-year plan to improve the examination process by combining the 

safety and soundness and compliance examination functions and by issuing one report of 

examination with a more comprehensive assessment of an institution’s risk profile.

In 2003, the federal financial regulatory agencies began a three-year effort to obtain suggestions 

from the industry and public on more streamlined and less burdensome ways to regulate. The 

interagency Economic Growth and Regulatory Paperwork Reduction Act (EGCFPRA) project 

will review regulations for unnecessary burden.

OTS supports the merger of the Bank Insurance Fund and Savings Association Insurance Fund 

in order to promote efficiency and ensure a more stable insurance system. OTS also supports 

other legislative regulatory relief efforts, including eliminating the disparate treatment of thrifts 

and banks under the securities laws and efforts to permit depository institutions to pay interest 

on business transaction accounts. 

Performance Goals 

1. Minimize financial regulatory burden on thrifts.

2. Process applications in a timely manner.

Strategies for Achieving Performance

1. Minimize financial regulatory burden on thrifts.

a. Without compromising responsibilities and the risk-based examination approach, OTS 

strives to manage its operations and budget to ensure no increases in assessment 

rates.
 

OTS Strategic Plan 2003-2008 10 August 26, 2003

b. Minimize examination time and the burden examinations can impose on thrift 

institutions by tailoring them to the risk profile of the institution, conducting melded 

safety and soundness and compliance exams, and developing streamlined 

examination procedures for small institutions. 

c. Work with the Senate Banking Committee and House Financial Services Committee 

staff to promote OTS’s regulatory burden reduction initiatives. 

d. Participate on federal financial regulatory agencies’ three-year effort to review 

regulations for unnecessary burden. Seek input from the industry, community groups, 

and staff on more streamlined and less burdensome ways to regulate. Recognize 

where differential regulation (based on size, condition, or other relevant 

considerations) may be appropriate.

e. When requested by savings associations, review the laws and regulations of other 

governmental entities that affect or purport to affect the operations of savings 

associations to determine if they impose unnecessary or redundant regulatory costs 

and burdens upon thrifts. Consult with federal, state, and local officials to identify and 

minimize these burdens. Provide guidance, interpretations, and legal support to help 

minimize regulatory costs and burdens.

f. Maintain a flexible supervisory environment to support the industry’s safe and sound 

modernization, evolution, and competitiveness in a changing financial environment.

2. Process applications in a timely manner.

a. Review the outstanding delegation of applications to the regional offices and 

determine whether additional applications may be delegated. 

b. Further streamline the applications process by reviewing regulations and application 

requirements to determine which applications may be eliminated, consolidated, or 

converted into notice (before or after the fact) requirements.

c. Review applications to identify opportunities for electronic filing.

d. Coordinate application processing with OTS legal, compliance, and supervision staffs.
 

OTS Strategic Plan 2003-2008 11 August 26, 2003

Strategic Goal 3: Fair access to financial services and fair treatment of thrift 

customers.

Washington and regional staff from examination, policy and community affairs promote industry 

adoption of comprehensive compliance management programs and encourage associations to 

strategically develop the diverse opportunities presented by the communities they are chartered 

to serve.

Performance Goals

1. Maintain a thrift industry that effectively complies with consumer protection laws and 

regulations.

2. Educate industry representatives on community development issues to promote community 

reinvestment and increased access to financial services.

Strategies for Achieving Performance

1. Maintain a thrift industry that effectively complies with consumer protection laws 

and regulations.

a. Conduct examinations with a top-down, risk-focused approach that promotes 

comprehensive compliance management including the establishment of adequate 

internal controls to ensure regulatory compliance and to avoid predatory practices.

b. Develop policy statements to help guide savings associations in their efforts to 

assimilate changing regulatory requirements and foster the adoption of best practices 

when serving consumers.

c. Use the application process to ensure that savings associations have management 

programs appropriate to the compliance risks associated with their business plans 

and responsive to the credit needs of the entire community they are chartered to 

serve.

d. OTS, along with the Treasury Department, the other federal banking regulators, and 

various law enforcement agencies and personnel, regularly and actively meet to 

discuss strategies and goals for implementing the BSA and its implementing 

regulations.

2. Educate industry representatives on community development issues to 

promote community reinvestment and increased access to financial services.

a. Provide information to the industry about current community development issues, best 

practices, investment authority, training opportunities, subsidy resources, and 

reference materials.
 

OTS Strategic Plan 2003-2008 12 August 26, 2003

b. Through CRA evaluations, outreach, and other means, identify competitive initiatives 

and sound business strategies used by savings associations to achieve responsible 

delivery of affordable housing financing and other financial services to under-served 

markets.

c. Afford technical assistance or sponsor training opportunities that support responsive 

community reinvestment and the prudent use of an association’s community 

development investment authority.
 

OTS Strategic Plan 2003-2008 13 August 26, 2003

Strategic Goal 4: A professional and motivated workforce that provides 

exceptional service to its customers and supports achievement of OTS business 

goals.

OTS interacts with the savings associations it regulates through the application, examination, 

and supervision process and with the customers these associations serve. In compliance with 

Executive Order 12862, OTS developed customer service standards for the Examination 

process, Congressional Correspondence, Interpretive Opinions, Consumer Assistance, and 

Applications Processing.

OTS strives to maintain a workforce that is professional and well trained to regulate the thrift 

industry and to deal with the public in a professional, informed and responsive manner. OTS 

provides the public with statistical reports, securities filings of OTS registrants, chartering

records, and other public information. OTS assists thrift customers with inquiries and 

complaints concerning thrift institutions. OTS is committed to providing employees with 

challenging work, honest feedback, and opportunities for growth, and to recognizing and 

rewarding delivered results.

In line with the President’s Management Agenda, OTS is committed to the effective, efficient, 

and economic management of its resources. OTS analyzes new enterprise initiatives for best 

value.

Performance Goals

1. Meet levels of customer service.

2. Meet examination objectives and achieve customer satisfaction with examination process.

3. Strategically manage the OTS workforce by aligning human capital strategies to the OTS 

mission, guiding principles, goals, and objectives.

4. Maintain accurate and timely financial information to support operating, budget, and policy 

decisions.

Strategies for Achieving Performance

1. Meet levels of customer service.

a. Ensure staff responsible for consumer service plans manage and achieve targeted 

service levels. Adjust customer service plans where necessary.

b. Maintain systems to provide timely access to metrics measuring customer service 

levels. 

c. Maintain an internal review process to identify “best practices” and ensure information 

is shared among agency staff.
 

OTS Strategic Plan 2003-2008 14 August 26, 2003

2. Meet examination objectives and achieve customer satisfaction with the 

examination process.

a. Conduct an annual thrift satisfaction survey to ensure that industry concerns are 

communicated and addressed. Institution feedback from the survey is used to 

evaluate the effectiveness of the examination and supervisory process.

b. Work with the industry to offer a program of instruction to assist thrift directors in 

becoming more aware of the best practices of efficient boards of directors. Ensure 

that the Directors’ Guide to Responsibilities, and Directors’ Guide to Management 

Reports are available to the directors of all OTS-regulated institutions. 

c. The OTS Ombudsman will facilitate resolution assistance across organizational lines 

of responsibility through mediation, facilitation, negotiation, or other alternative 

resolution methods appropriate to a particular issue.

3. Strategically manage OTS workforce by aligning human capital strategies to 

OTS mission, guiding principles, goals, and objectives.

a. Cross-train examination staff to ensure full capability to conduct melded examinations. 

b. Support staff’s professional development to ensure necessary competencies and job 

satisfaction.

c. Train or recruit staff to meet the evolving practices in the thrift industry.

4. Maintain accurate and timely financial information to support operating, budget, 

and policy decisions.

a. Provide timely monthly financial data online to operational staff.

b. Consistently use financial and performance information during operational evaluation 

and decision-making.
 

OTS Strategic Plan 2003-2008 15 August 26, 2003

Key External Factors Affecting Achievement of 

Goals

Institution failures have been nominal for several years. However, a significant single event 

could significantly impact the health of the thrift industry, increase OTS’s examination workload, 

and alter current staffing projections for examiner, legal, and investigative personnel. Following 

are several factors that could affect OTS’s ability to achieve its mission and goals: 

Industry consolidation – Consolidation of the financial industry provides opportunities 

and challenges to OTS. Consolidation may require OTS to supervise and examine larger 

institutions conducting non-traditional activities over a wider geographic area and in 

unusual corporate structures. OTS also needs to be alert to ensure that consolidation 

does not limit consumer choice or reduce the reach of the Community Reinvestment Act. 

By working closely with these larger institutions, OTS often has the opportunity to assist 

them in providing more and different types of resources to underserved areas.

Systemic economic events and risks - A systemic event is the breakdown in the 

functioning of one environment that could spread to others causing sufficient harm to the 

well-being of the whole system. Systemic economic events such as a stock market 

crash or international financial crisis could cause a substantial reduction in aggregate 

economic activity, such as housing starts, home sales, consumption, output and 

employment. Systemic risk is the possibility that an event may occur. Mitigating 

systemic risk and responding to systemic events are concerns of all five of the financial 

regulators. Types of systemic events that could affect OTS’s ability to achieve its 

strategic goals are:

1. Sharp increase in market rates – The current vibrant housing market has been a 

significant factor in the thrift industry’s strong financial performance. However, a 

large and sustained increase in interest rates could impact the performance of the 

industry. 

2. Disruptions in business as a result of an external threat – The September 11th

terrorist attacks on the World Trade Center and the Pentagon shook America’s 

sense of peace and made us painfully aware of the many things that Americans 

take for granted. Terrorist attacks could limit OTS’s ability to achieve its mission 

and thrifts’ ability to serve their financial communities. Through the FBIIC, 

Treasury and its bureaus are improving the reliability and security of the financial 

community.

Human Capital: Significant fluctuations in the national or global economy, as well as 

major disruptions from terrorist actions, may impair OTS’s capability to accomplish its 

mission and to execute its full regulatory functions. 

Technology: Technology provides new methods for savings associations to offer 

traditional products and services through new delivery methods and to develop innovative 

products and services. Technology changes influence operating strategies and often 
 

OTS Strategic Plan 2003-2008 16 August 26, 2003

increase security risks if not properly managed. OTS’s IT and Safety and Soundness 

examiners must continually adapt to appropriately address these new risks.

Legislative – Legislative changes may require new or revised issuance of guidance or 

rulemaking. Outreach programs with our savings associations may be needed to share 

information and provide direction. Supervisory and examination activities may need 

alteration to address new thrift powers and corresponding risks. 
 

OTS Strategic Plan 2003-2008 17 August 26, 2003

Appendix A: Strategic Management Process

OTS’s mission statement and strategic plan set a course for the organization. The strategic 

plan contains long term goals and objectives that are implemented through the annual 

performance plan. OTS’s strategic plan is modified every three years in accordance with the 

Government Performance and Results Act and after analyses of operational and legislative 

changes, emerging risks, performance reports, and program evaluations.

OTS’s strategic planning process includes a systematic approach to establishing and revising 

OTS’s major goals and objectives. OTS management annually reviews the four strategic goals 

and corresponding performance goals and measures. OTS’s planning process is shown below:

Develop, Modify 

or Reconfirm 

OTS’s Mission 

Statement

Assess 

Progress in 

Meeting Goals 

Quarterly

Develop, Modify or 

Reconfirm OTS’s 

Strategic and 

Performance Goals

Develop Annual Performance Plan 

revising Performance Goals and 

Measures as Necessary 

Distribute new 

Strategic Plan 

if appropriate

Evaluate Goals, 

Strategies, and 

Measures

Revise Strategic

Planning Process 

as Needed

Evaluate 

Treasury 

Strategic 

Goals, 

Objectives, 

Means and 

Strategies

Develop 

performance 

measures
 

OTS Strategic Plan 2003-2008 18 August 26, 2003

Appendix B: Relationship between OTS and 

Treasury Goals 

Treasury 

Strategic Goal OTS Strategic Goal OTS Performance Goals

Preserve the integrity of financial 

systems.

A safe and sound thrift industry. Ensure that OTS-regulated thrift 

institutions operate in a safe and 

sound manner through effective 

supervision.

Maintain a thrift industry that is 

sufficiently capitalized. 

Conduct examinations in an efficient 

and effective manner.

Promote prosperous U.S. and World 

economies.

A flexible legal and regulatory 

framework that enables the thrift 

industry to provide a full competitive 

array of financial services.

Minimize financial regulatory burden 

on thrifts.

Process applications in a timely 

manner. 

Preserve the integrity of financial 

systems.

Fair access to financial services and 

fair treatment of thrift customers.

Maintain a thrift industry that 

effectively complies with compliance 

laws and regulations.

Educate industry representatives on 

community development issues to 

promote community reinvestments 

and increased access to financial 

services.

Ensure professionalism, excellence, 

integrity and accountability in the 

management and conduct of the 

Department of Treasury.

A professional and motivated 

workforce that provides exceptional 

service to its customers and 

supports achievement of OTS 

business goals.

Meet levels of customer service.

Meet examination objectives and 

achieve customer satisfaction with 

examination process. 

Strategically manage OTS workforce 

by aligning human capital strategies 

to OTS mission, guiding principles, 

goals, and objectives.

Maintain accurate and timely financial 

information to support operating 

budget, and policy decisions.
 

OTS Strategic Plan 2003-2008 19 August 26, 2003

Appendix C: Program Evaluations

Internal and external program evaluations are used to evaluate whether the OTS program is 

achieving results in an effective manner. Evaluation and review results are used to support the 

annual assurance statement to Treasury and to revise goals, measures, and strategies.

OTS’s strategic planning effort is a dynamic and inclusive process. OTS has one primary 

program responsibilitythe supervision of thrift institutions. This program responsibility is 

reflected in OTS’s clear and concise mission statement and four outcome-oriented strategic 

goals. 

OTS’s four strategic goals guide the agency’s day-to-day activities and core processes and help 

ensure that resources are used to support mission-related outcomes. As the thrift environment 

evolves, OTS will alter its strategic goals, performance goals, and activities to meet any new 

challenge and to enable OTS to continue to effectively and efficiently accomplish its mission in 

the immediate thrift environment. OTS measures the progress of achieving its performance 

goals through the development and quarterly tracking of outcome-oriented performance 

measures. OTS’s program evaluation process is illustrated in the diagram below: 

Internal Evaluations

The health of the thrift industry and the OTS’s performance measures cited in OTS’s annual 

Performance Plan indicate that OTS is accomplishing its program requirements. OTS frequently 

conducts process evaluations to enhance its ability to effectively accomplish its program 

responsibilities. A process evaluation is an assessment of operating policies and practices used 

to accomplish overall program responsibilities. OTS conducts process evaluations as needed.

OTS maintains strong controls against fraud, waste, and abuse in compliance with the Federal 

Managers’ Financial Integrity Act (FMFIA). In addition to strong internal controls, OTS maintains 

comprehensive financial management controls, personnel security controls, computer security, 

and strong asset accountability programs. OTS maintains budgetary integrity through the 

continual oversight and monitoring of its annual budget. OTS reviews its existing FMFIA 

Develop outcome-oriented 

strategic goals and 

performance goals to support 

OTS’s mission. 

Ascertain success of 

achieving goals through 

quarterly accumulation of 

performance measure data.

Analyze data to identify 

reasons for gaps in reaching 

performance goals. Ask 

“What do we need to do 

differently?”

Evaluate program to 

determine whether program 

goals are being met.

Propose alternative methods 

of reaching program goals 

(see five criteria to be 

considered 

on next page).

Project whether alternative 

methods would be more or 

less efficient than current 

methods.
 

OTS Strategic Plan 2003-2008 20 August 26, 2003

program annually to ensure that it satisfies all statutory requirements and OMB guidance, and 

that it facilitates managers’ participation and compliance. OTS’s FMFIA program is modified as 

statutory requirements and OMB guidance change.

OTS’s Annual Assurance Statement for the fiscal year ending September 30, 2002, as required 

by the Federal Managers’ Financial Integrity Act (FMFIA), certified that OTS’s management 

control systems are adequate and ensure that programs achieve their intended results; 

resources are used consistent with the OTS mission; programs and resources are protected 

from waste, fraud, and mismanagement; laws and regulations are followed; and reliable and 

timely information is obtained and used for decision making. In addition, none of the quality 

assurance and other reviews, audits, management studies, or program and annual evaluations 

conducted during FY 2002 identified any Section 2 significant or “material” weaknesses, or 

Section 4 material nonconformance.

External Program Evaluations: 

External program evaluations and reviews are conducted by the Government Accounting Office 

(GAO), the Office of Management and Budget (OMB) and/or the Treasury Inspector General. 

The findings and recommendations of OTS’s external evaluations and reviews are reported 

annually in our annual FMFIA assurance statement.

During 2002, OMB evaluated OTS using the Program Assessment Rating Tool (PART). The 

PART is a systematic process for evaluating program performance to make budget decisions. 

The PART assessed four critical areas: purpose and design, strategic planning, management, 

and results and accountability. There were four possible qualitative ratings: Effective, 

Moderately Effective, Adequate and Ineffective. OTS received an overall numerical rating of “93” 

and a qualitative rating of Effective. 

The foundation of OTS’s financial management control program is its annual financial statement 

audit. The independent, certified public accounting firm of Deva & Associates, under contract 

with the Treasury Inspector General and OTS, conducted the 2002 audit. Since being formed in 

1989, OTS has received unqualified opinions on its financial statements.
 

OTS Strategic Plan 2003-2008 21 August 26, 2003

Appendix D: Means to Accomplish Strategic Goals

Operating Capital : OTS receives no appropriated funds from Congress. FIRREA provided 

OTS with the authority to fund its operations through periodic assessments charged to the 

thrift industry. Assessments constitute the largest single component (90.1%) of total OTS 

income. OTS also receives funds from application fees, interest, rents and subleases, exam 

fees, and other miscellaneous sources. 

 

Sources of OTS Revenue

Assessments

91.0%

Other

1.0%

Rents and 

Subleases

2.6%

Interest

2.5%

Application, 

Exam and 

Security Filing 

Fees

2.9%

Percentages based on 2003 revenue.
 

OTS Strategic Plan 2003-2008 22 August 26, 2003

OTS’s assessment structure uses rates that decline as the asset size of individual thrifts 

increase because experience has revealed that there are economies of scale associated with 

the supervision of larger thrifts. The consolidation of the thrift industry has resulted in fewer 

thrifts with greater average assets. Thus, as the average thrift has grown, the price of 

regulation per asset dollar has decreased.

The Price of Regulation Per Asset Dollar Has Decreased

$0

$50

$100

$150

$200

1991199219931994199519961997199819992000

2001*

2002

Assessments (in Millions)

$0

$200

$400

$600

$800

$1,000

$1,200

Thrift Assets (in Billions)

OTS Assessment Revenue

Thrift Assets

*OTS switched its budget to a fiscal year in 2001. Thus, the 2001 

assessment number reflects only 9 months of revenue.
 

OTS Strategic Plan 2003-2008 23 August 26, 2003

OTS annually evaluates its budget support for its four strategic goals. Maintaining a safe and 

sound thrift industry is OTS’s critical strategic goal and utilizes the majority of OTS’s 

resources (83%). 

OTS’s Budget Appropriately Supports OTS’s Four Strategic Goals

 

A safe and 

sound thrift 

industry.

83%

Flexible 

regulatory 

framework.

10%

Fair access to 

financial 

services.

4%

Provide 

exceptional 

service.

3%

Excellence in Financial Management: OTS is committed to excellence in financial 

management. OTS’s financial management systems provide timely, auditable information 

that supports the incorporation of financial and performance measurement in the planning, 

budgeting, and reporting processes. After assessing the risk associated with upgrading the 

accounting system, OTS transitioned from its in-house core financial management systems to 

services provided by the Bureau of Public Debt’s Administrative Resource Center (ARC). 

This transition began in 2001 and was completed in May of 2003.

Human Capital: The OTS staff consists of highly qualified individuals who represent 

America’s diversity. To responsively supervise thrifts, OTS staff must evaluate complex thrift 

business characteristics associated with risk management and capital adequacy and be 

prepared to take immediate corrective measures to mitigate problems. OTS staff must 

evaluate the credit, interest rate, and other market risk dimensions of new lines of business, 

financial instruments, risk management strategies, and corporate structures while ensuring 

consumer protection and confidence. Examinations and evaluations require more 

sophisticated strategies and more complicated financial analyses incorporating the use of 

econometric models that subject individual thrift portfolios to “stress tests” or other forms of 

sensitivity analysis. OTS also requires a highly trained and experienced legal staff to address 

the complex questions concerning these issues.
 

OTS Strategic Plan 2003-2008 24 August 26, 2003

The increasing industry interest in using electronic banking technologies requires staff to 

enhance its electronic banking examination program that helps examiners evaluate an 

institution’s strategies, planning, administration and internal controls. The increasing industry 

interest in obtaining fiduciary powers requires OTS to augment its national trust examination 

program by enhancing examiner training and changing the focus of its trust examinations to 

embrace a risk-sensitive scoping methodology.

Staff Skills: OTS management is committed to maintaining a high degree of competence 

and skill for OTS employees. Formal courses are the primary method of achieving these 

objectives; however, strong emphasis is placed on using alternative resources and means of 

development. Mentoring, cross-training, assignments to other offices or departments, 

research, reading, and self-study programs are examples of OTS’s broad approach to 

employee development.

In 2002, OTS launched a major training initiative to prepare OTS examiners for the melding 

of examinations. Through a combination of formal classes, independent study, and on-thejob experience, examiners acquire proficiency in areas in which they are not accredited so 

that they can serve as examiner-in-charge of a fully melded examination. The program 

ensures that the candidate has sufficient knowledge to act in an accredited capacity. Two 

online review courses assist examination staff prepare for the comprehensive tests required 

before the Certified Thrift Examiner designation is awarded.

Information Technology: OTS supports management reforms, such as the Clinger-Cohen 

Act, the Paperwork Reduction Act, and the Government Performance and Results Act, which 

require agencies to establish a process for maximizing the value of IT investments. Effective 

use of information technology enhances OTS’s ability to accomplish its mission and goals. 

The objectives of Information Technology (IT) are to:

• Integrate IT planning with OTS strategic planning.

• Minimize data collection impact on the thrift industry.

• Capture information once, at its source, secure it, and make it easily available to all 

staff.

• Continually assess and leverage technological opportunities for achieving OTS’s 

mission more effectively.

• Develop and implement IT initiatives and new applications within the scope of the IT 

architecture and standards.

• Ensure enterprise-wide integration of IT security.

• Identify and approve annually IT initiatives that address strategic goals.
 

OTS Strategic Plan 2003-2008 25 August 26, 2003

Appendix E: Data Capacity

Performance Measure Verification and Validation: The quantitative values reported for 

the performance measures in OTS’s Performance Plan are accurate and auditable. Several 

of the quantitative values are generated with the help of OTS’s automated systems, which 

are routinely validated to ensure that they produce accurate information. 

The Electronic Continuing Exam Folder (ECEF) serves as a means to access reports and 

documents for each OTS-regulated institution. Authorized regional users add and manage 

categories and documents for this system through the OTS Intranet Content Management 

system. OTS employees may view ECEF content published by any region.

For each performance measure, a “contact person” is assigned. The contact person is 

responsible for ensuring that the “level of success” reported in OTS’s Performance Report is 

accurate. The contact person is also responsible for keeping auditable records. 

OTS’s quality assurance program, which has been in place since 1991, provides internal 

quality control for the examination process and for administrative, legal, and policy functions. 

OTS’s Quality Assurance Reviews determine the accuracy, reliability and fairness of 

information and financial data produced within the regions and ensures that all regional 

information complies with Federal Managers’ Financial Integrity Act (FMFIA) standards. 

FMFIA requires the Department heads to issue annual quality assurance statements. 

Financial Presentation: OTS complies with all applicable Generally Accepted Accounting 

Principles (GAAP), Federal Financial Accounting Standards, and internal control principles. 

OTS's financial transactions are reported on an accrual basis. The Financial Operations 

Division continually reviews new Statements of Federal Financial Accounting Standards and 

modifies accounting policy, procedures, and reporting, as needed.
 

OTS Strategic Plan 2003-2008 26 August 26, 2003

Appendix F: Challenges and Consultations

Major Management Challenges and High Risk Areas 

GAO and OIG have not identified any high-level management challenges for OTS to address. 

OTS is well situated to operate efficiently and effectively and has no outstanding material 

weaknesses or internal control problems and no significant audit or systems problems. 

Consulting with Stakeholders 

The American public benefits from a strong thrift industry. OTS strives to provide the savings 

associations it regulates with as much voice in the regulatory process as possible, usually 

winning voluntary compliance. To assess the quality of OTS’s service, staff members 

continually collect information and feedback from thrifts, their customers, and other affected 

parties. OTS informs both customers and thrifts of its strategic planning process and 

strategic initiatives through our website, participation in outreach opportunities, and speeches 

to industry trade groups.

To help ensure OTS provides excellent customer service without compromising safety and 

soundness, OTS developed customer service standards for the Examination process, 

Congressional correspondence, External Interpretive Opinions, Public Information, and 

Consumer Assistance. The service plans seek to improve communication between OTS and 

one or more stakeholder or customer groups.

During an examination, examiners conduct entrance and exit meetings. At the exit meeting 

the Examiner-in-Charge meets with either the thrift’s senior management team or Board of 

Directors to summarize all findings of the examination and any corrective action plans. 

Following an examination, the report of examination (ROE) is forwarded to the institution 

within 30 days after completion of field work for institutions rated 1 or 2 and within 45 days for 

institutions rated 3, 4, or 5. OTS supervisory staff often meets with an institution’s Board of 

Directors after delivery of the ROE to discuss findings and recommendations. Between 

examinations, a member of OTS’s supervisory team routinely contacts each institution and is 

available to meet as needed. To ensure that OTS continues to provide the highest possible 

level of service and oversight to the industry, we revised our management survey to CEOs. 

The Annual Thrift Satisfaction Survey allows OTS to monitor its performance and address 

problems or recommendations. 

OTS’s regional offices actively solicit advice from and provide information to thrifts in their 

region. Regional staff participate in regulator-sponsored, industry-sponsored, and institutionsponsored training conferences, workshops, and seminars on accounting and financial 

management, directors’ responsibilities, the PATRIOT Act, Community Reinvestment Act, fair 

lending, and other compliance issues.

OTS communicates with stakeholders and interested parties outside of the supervisory 

process. OTS’s draft Strategic Plan, along with a request for comments, will be sent to the 

Chairman and a ranking member of the Committee on Banking and Financial Services, U.S. 
 

OTS Strategic Plan 2003-2008 27 August 26, 2003

House of Representatives and to two ranking members of the Committee on Banking, 

Housing and Urban Affairs of the United States Senate. 

OTS participates with the Results Act Banking Regulatory Working Group, which meets 

monthly and includes representatives from the Comptroller of the Currency, Federal Deposit 

Insurance Corporation, the Federal Reserve Board and the National Credit Union 

Administration. The purpose of the group is to coordinate strategic planning activities.

OTS’s 2003 - 2008 Strategic Plan and 2003 Performance Plan are available on the OTS 

Internet Web site and can be found at www.ots.treas.gov. Posting the Strategic Plan to the 

Internet facilitates comments from all stakeholders and affected parties.