[Federal Register Volume 88, Number 238 (Wednesday, December 13, 2023)]
[Notices]
[Pages 86445-86447]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-27294]


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DEPARTMENT OF THE TREASURY

Office of the Comptroller of the Currency


Agency Information Collection Activities: Information Collection 
Renewal; Comment Request; OCC Guidelines Establishing Heightened 
Standards for Certain Large Insured National Banks, Insured Federal 
Savings Associations, and Insured Federal Branches

AGENCY:  Office of the Comptroller of the Currency (OCC), Treasury.

ACTION:  Notice and request for comment.

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SUMMARY:  The OCC, as part of its continuing effort to reduce paperwork 
and respondent burden, invites comment on a continuing information 
collection, as required by the Paperwork Reduction Act of 1995 (PRA). 
In accordance with the requirements of the PRA, the OCC may not conduct 
or sponsor, and the respondent is not required to respond to, an 
information collection unless it displays a currently valid Office of 
Management and Budget (OMB) control number. The OCC is soliciting 
comment concerning the renewal of its information collection titled, 
``OCC Guidelines Establishing Heightened Standards for Certain Large 
Insured National Banks, Insured Federal Savings Associations, and 
Insured Federal Branches.''

DATES:  Comments must be received by February 12, 2024.

ADDRESSES:  Commenters are encouraged to submit comments by email, if 
possible. You may submit comments by any of the following methods:
    <bullet> Email: <a href="/cdn-cgi/l/email-protection#d9a9abb8b0b7bfb699b6babaf7adabbcb8aaf7beb6af"><span class="__cf_email__" data-cfemail="dfafadbeb6b1b9b09fb0bcbcf1abadbabeacf1b8b0a9">[email protected]</span></a>.
    <bullet> Mail: Chief Counsel's Office, Attention: Comment 
Processing, Office of the Comptroller of the Currency, Attention: 1557-
0321, 400 7th Street SW, Suite 3E-218, Washington, DC 20219.
    <bullet> Hand Delivery/Courier: 400 7th Street SW, Suite 3E-218, 
Washington, DC 20219.
    <bullet> Fax: (571) 293-4835.
    Instructions: You must include ``OCC'' as the agency name and 
``1557-0321'' in your comment. In general, the OCC will publish 
comments on www.reginfo.gov without change, including any business or 
personal information provided, such as name and address information, 
email addresses, or phone numbers. Comments received, including 
attachments and other supporting materials, are part of the public 
record and subject to public disclosure. Do not include any information 
in your comment or supporting materials that you consider confidential 
or inappropriate for public disclosure.
    Following the close of this notice's 60-day comment period, the OCC 
will publish a second notice with a 30-day comment period. You may 
review comments and other related materials that pertain to this 
information collection beginning on the date of publication of the 
second notice for this collection by the method set forth in the next 
bullet.
    <bullet> Viewing Comments Electronically: Go to www.reginfo.gov. 
Hover over the ``Information Collection Review'' tab and click on 
``Information Collection Review'' from the drop-down menu. From the 
``Currently under Review'' drop-down menu, select ``Department of the 
Treasury'' and then click ``Submit.'' This information collection can 
be located by searching OMB control number ``1557-0321'' or ``OCC 
Guidelines Establishing Heightened Standards for Certain Large Insured 
National Banks, Insured Federal Savings Associations, and Insured 
Federal Branches.'' Upon finding the appropriate information 
collection, click on the related ``ICR Reference Number.'' On the next 
screen, select ``View Supporting Statement and Other Documents'' and 
then click on the link to any comment listed at the bottom of the 
screen.
    <bullet> For assistance in navigating www.reginfo.gov, please 
contact the Regulatory Information Service Center at (202) 482-7340.

FOR FURTHER INFORMATION CONTACT: Shaquita Merritt, Clearance Officer, 
(202) 649-5490, Chief Counsel's Office, Office of the Comptroller of 
the Currency, 400 7th Street SW, Washington, DC 20219. If you are deaf, 
hard of hearing, or have a speech disability, please dial 7-1-1 to 
access telecommunications relay services.

SUPPLEMENTARY INFORMATION: Under the PRA (44 U.S.C. 3501 et seq.), 
Federal agencies must obtain approval from the OMB for each collection 
of information that they conduct or sponsor. ``Collection of 
information'' is defined in 44 U.S.C. 3502(3) and 5 CFR 1320.3(c) to 
include agency requests or requirements that members of the public 
submit reports, keep records, or provide information to a third party. 
Section 3506(c)(2)(A) of title 44 generally requires Federal agencies 
to provide a 60-day notice in the Federal Register concerning each 
proposed collection of information, including each proposed extension 
of an existing collection of information, before submitting the 
collection to OMB for approval. To comply with this requirement, the 
OCC is publishing notice of the renewal/revision of this collection.
    Title: OCC Guidelines Establishing Heightened Standards for Certain 
Large Insured National Banks, Insured Federal Savings Associations, and 
Insured Federal Branches.
    OMB Control No.: 1557-0321.
    Description: The OCC's guidelines, codified in 12 CFR part 30, 
appendix D, establish minimum standards for the design and 
implementation of a risk governance framework for insured national 
banks, insured Federal savings associations, and insured Federal 
branches of a foreign bank (banks). The guidelines apply to covered 
banks. A covered bank is a bank with average total consolidated assets: 
(i) equal to or greater than $50 billion; (ii) less than $50 billion if 
that bank's parent company controls at least one insured national bank 
or insured Federal savings association that has average total 
consolidated assets of $50 billion or greater; or (iii) less than $50 
billion, if the OCC determines such bank's operations are highly 
complex or otherwise present a heightened risk as

[[Page 86446]]

to warrant the application of the guidelines. The guidelines also 
establish minimum standards for a board of directors in overseeing the 
framework's design and implementation. These guidelines were finalized 
on September 11, 2014.\1\ The OCC is now seeking to renew the 
information collection associated with these guidelines. The standards 
contained in the guidelines are enforceable under section 39 of the 
Federal Deposit Insurance Act (FDIA),\2\ which authorizes the OCC to 
prescribe operational and managerial standards for insured national 
banks, insured Federal savings associations, and insured Federal 
branches of a foreign bank.
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    \1\ 79 FR 54518.
    \2\ 12 U.S.C. 1831p-1. Section 39 was enacted as part of the 
Federal Deposit Insurance Corporation Improvement Act of 1991, 
Public Law 102-242, section 132(a), 105 Stat. 2236, 2267-70.
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    The guidelines formalize the OCC's heightened expectations program. 
The guidelines also further the goal of the Dodd-Frank Wall Street 
Reform and Consumer Protection Act of 2010 to strengthen the financial 
system by focusing management and boards of directors on improving and 
strengthening risk management practices and governance, thereby 
minimizing the probability and impact of future financial crises. The 
standards for the design and implementation of the risk governance 
framework, which contain collections of information, are as follows:

Standards for Risk Governance Framework

    Covered banks should establish and adhere to a formal, written risk 
governance framework designed by independent risk management. The 
framework should include delegations of authority from the board of 
directors to management committees and executive officers and risk 
limits for material activities. The framework should be approved by the 
board of directors or the board's risk committee, and it should be 
reviewed and updated, at least annually, by independent risk 
management.

Front Line Units

    Front line units should take responsibility and be held accountable 
by the chief executive officer (CEO) and the board of directors for 
appropriately assessing and effectively managing all of the risks 
associated with their activities. In fulfilling this responsibility, 
each front line unit should, either alone or in conjunction with 
another organizational unit that has the purpose of assisting a front 
line unit: (i) assess, on an ongoing basis, the material risks 
associated with its activities and use such risk assessments as the 
basis for fulfilling its responsibilities and for determining if 
actions need to be taken to strengthen risk management or reduce risk 
given changes in the unit's risk profile or other conditions and (ii) 
establish and adhere to a set of written policies that include front 
line unit risk limits. Such policies should ensure risks associated 
with the front line unit's activities are effectively identified, 
measured, monitored, and controlled, consistent with the covered bank's 
risk appetite statement, concentration risk limits, and all policies 
established within the risk governance framework. Front line units 
should also establish and adhere to procedures and processes, as 
necessary to maintain compliance with the policies described in (ii). 
Front line units should furthermore adhere to all applicable policies, 
procedures, and processes established by independent risk management. 
Front line units should also develop, attract, and retain talent and 
maintain staffing levels required to carry out the unit's role and 
responsibilities effectively; establish and adhere to talent management 
processes; and establish and adhere to compensation and performance 
management programs.

Independent Risk Management

    Independent risk management should oversee the covered bank's risk-
taking activities and assess risks and issues independent of the front 
line units. In fulfilling these responsibilities, independent risk 
management should: (i) take responsibility and be held responsible by 
the CEO and the board of directors for designing a comprehensive 
written risk governance framework that meets the guidelines and is 
commensurate with the size, complexity, and risk profile of the covered 
bank; (ii) identify and assess, on an ongoing basis, the covered bank's 
material aggregate risks and use such risk assessments as the basis for 
fulfilling its responsibilities and for determining if actions need to 
be taken to strengthen risk management or reduce risk given changes in 
the covered bank's risk profile or other conditions; (iii) establish 
and adhere to enterprise policies that include concentration risk 
limits that state how aggregate risks within the covered bank are 
effectively identified, measured, monitored, and controlled, consistent 
with the covered bank's risk appetite statement and all policies and 
processes established within the risk governance framework; (iv) 
establish and adhere to procedures and processes, as necessary, to 
ensure compliance with policies in (iii); (v) identify and communicate 
to the CEO and either the board of directors or the board's risk 
committee any material risks and significant instances where the 
independent risk management's assessment of risk differs from that of a 
front line unit and any significant instances where a front line unit 
is not adhering to the risk governance framework; (vi) identify and 
communicate to the board of directors or the board's risk committee 
material risks and significant instances where independent risk 
management's assessment of risk differs from that of the CEO and 
significant instances where the CEO is not adhering to, or not holding 
front line units accountable for adhering to, the risk governance 
framework; and (vii) develop, attract, and retain talent and maintain 
the staffing levels required to carry out the unit's role and 
responsibilities effectively while establishing and adhering to talent 
management processes and compensation and performance management 
programs.

Internal Audit

    Internal audit should ensure that the covered bank's risk 
governance framework complies with the guidelines and is appropriate 
for the size, complexity, and risk profile of the covered bank. It 
should maintain a complete and current inventory of all of the covered 
bank's material processes, product lines, services, and functions and 
assess the risks, including emerging risks, associated with each. These 
risks collectively provide a basis for the audit plan. Internal audit 
should establish and adhere to an audit plan that: (i) is periodically 
reviewed and updated; (ii) takes into account the covered bank's risk 
profile, emerging risks, and issues; and (iii) establishes the 
frequency with which activities should be audited. The audit plan 
should require internal audit to evaluate the adequacy of and 
compliance with policies, procedures, and processes established by 
front line units and independent risk management under the risk 
governance framework. Significant changes to the audit plan should be 
communicated to the board's audit committee. Internal audit should 
report, in writing, conclusions, material issues, and recommendations 
from audit work carried out under the audit plan to the board's audit 
committee. Reports should identify the root cause of any material 
issues and include: (i) a determination of whether the root cause 
creates an issue that has an impact on one or more organizational units 
within the covered bank; and (ii) a determination of the effectiveness 
of

[[Page 86447]]

front line units and independent risk management in identifying and 
resolving issues in a timely manner. Internal audit should establish 
and adhere to processes for independently assessing the design and 
ongoing effectiveness of the risk governance framework on at least an 
annual basis. The independent assessment should include a conclusion on 
the covered bank's compliance with the standards set forth in the 
guidelines. Internal audit should identify and communicate to the 
board's audit committee significant instances where front line units or 
independent risk management are not adhering to the risk governance 
framework. Internal audit should establish a quality assurance program 
that ensures internal audit's policies, procedures, and processes: (i) 
comply with applicable regulatory and industry guidance; (ii) are 
appropriate for the size, complexity, and risk profile of the covered 
bank; (iii) are updated to reflect changes to internal and external 
risk factors, emerging risks, and improvements in industry internal 
audit practices; and (iv) are consistently followed. Internal audit 
should develop, attract, and retain talent and maintain staffing levels 
required to effectively carry out its role and responsibilities. 
Internal audit should establish and adhere to talent management 
processes and compensation and performance management programs that 
comply with the guidelines.

Strategic Plan

    The CEO, with input from front line units, independent risk 
management, and internal audit, should be responsible for the 
development of a written strategic plan that covers, at a minimum, a 
three-year period. The board of directors should evaluate and approve 
the plan and monitor management's efforts to implement the strategic 
plan at least annually. The plan should: (i) include a comprehensive 
assessment of risks that currently impact the covered bank or that 
could have an impact on the covered bank during the period covered by 
the strategic plan; (ii) articulate an overall mission statement and 
strategic objectives for the covered bank with an explanation of how 
the covered bank will update the risk governance framework to account 
for changes to its risk profile projected under the strategic plan; and 
(iii) be reviewed, updated, and approved due to changes in the covered 
bank's risk profile or operating environment that were not contemplated 
when the plan was developed.

Risk Appetite Statement

    A covered bank should have a comprehensive written statement that 
articulates its risk appetite and serves as the basis for the risk 
governance framework. The statement should contain both qualitative 
components that describe a safe and sound risk culture and how the 
covered bank will assess and accept risks and quantitative limits that 
include sound stress testing processes and address earnings, capital, 
and liquidity.

Risk Limit Breaches

    A covered bank should establish and adhere to processes that 
require front line units and independent risk management to: (i) 
identify breaches of the risk appetite statement, concentration risk 
limits, and front line unit risk limits; (ii) distinguish breaches 
based on the severity of their impact; (iii) establish protocols for 
when and how to inform the board of directors, front line unit 
management, independent risk management, internal audit, and the OCC 
regarding a breach; (iv) provide a written description of the breach 
resolution; and (v) establish accountability for reporting and 
resolving breaches that include consequences for risk limit breaches 
that take into account the magnitude, frequency, and recurrence of 
breaches.

Concentration Risk Management

    The risk governance framework should include policies and 
supporting processes appropriate for the covered bank's size, 
complexity, and risk profile for effectively identifying, measuring, 
monitoring, and controlling the covered bank's concentrations of risk.

Risk Data Aggregation and Reporting

    The risk governance framework should include a set of policies, 
supported by appropriate procedures and processes, designed to provide 
risk data aggregation and reporting capabilities appropriate for the 
covered bank's size, complexity, and risk profile and to support 
supervisory reporting requirements. Collectively, these policies, 
procedures, and processes should provide for: (i) the design, 
implementation, and maintenance of a data architecture and information 
technology infrastructure that support the covered bank's risk 
aggregation and reporting needs during normal times and during times of 
stress; (ii) the capturing and aggregating of risk data and reporting 
of material risks, concentrations, and emerging risks in a timely 
manner to the board of directors and the OCC; and (iii) the 
distribution of risk reports to all relevant parties at a frequency 
that meets their needs for decision-making purposes.

Talent and Compensation Management

    A covered bank should establish and adhere to processes for talent 
development, recruitment, and succession planning. The board of 
directors or appropriate committee should review and approve a written 
talent management program. A covered bank should also establish and 
adhere to compensation and performance management programs that comply 
with any applicable statute or regulation.

Board of Directors Training and Evaluation

    The board of directors of a covered bank should establish and 
adhere to a formal, ongoing training program for all directors. The 
board of directors should also conduct an annual self-assessment.
    Type of Review: Regular.
    Affected Public: Businesses or other for-profit.
    Estimated Number of Respondents: 27.
    Estimated Burden per Respondent: 3,776 hours.
    Estimated Total Annual Burden: 101,952 hours.
    Comments submitted in response to this notice will be summarized 
and included in the request for OMB approval. All comments will become 
a matter of public record. Comments are invited on:
    (a) Whether the collection of information is necessary for the 
proper performance of the functions of the OCC, including whether the 
information has practical utility;
    (b) The accuracy of the OCC's estimate of the burden of the 
collection of information;
    (c) Ways to enhance the quality, utility, and clarity of the 
information to be collected;
    (d) Ways to minimize the burden of the collection on respondents, 
including through the use of automated collection techniques or other 
forms of information technology; and
    (e) Estimates of capital or start-up costs and costs of operation, 
maintenance, and purchase of services to provide information.

Patrick T. Tierney,
Assistant Director, Bank Advisory, Office of the Comptroller of the 
Currency.
[FR Doc. 2023-27294 Filed 12-12-23; 8:45 am]
BILLING CODE 4810-33-P


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