Office of the Comptroller of the 

Currency 

FY 2016 

President’s Budget 

February 2, 2015 
OCC - 2 

Table of Contents

Section 1 – Purpose ....................................................................................................................... 3

1A – Mission Statement .............................................................................................................. 3

1.1 – Resource Detail Table ........................................................................................................ 3

1B – Vision, Priorities and Context ............................................................................................ 3

Section 2 – Budget Adjustments and Appropriation Language ............................................. 14

2.2 – Operating Levels Table .................................................................................................... 14

2C – Legislative Proposals ........................................................................................................ 14

Section 3 – Budget and Performance Plan ............................................................................... 15

3A – Supervise .......................................................................................................................... 15

3.1.1 – Supervise Budget and Performance Plan ...................................................................... 18

3B – Regulate ............................................................................................................................ 19

3.1.2 – Regulate Budget and Performance Plan ....................................................................... 20

Section 4 – Supplemental Information ...................................................................................... 22

4A – Summary of Capital Investments ..................................................................................... 22

 
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Section 1 – Purpose 

1A – Mission Statement 

To ensure that national banks and federal savings associations operate in a safe and sound 

manner, provide equal access to financial services, treat customers fairly, and comply with 

applicable laws and regulations. 

1.1 – Resource Detail Table 

Dollars in Thousands

Office of the Comptroller of the 

Currency FY 2014 FY 2015 FY 2016 FY 2015 to FY 2016

Budgetary Resources Estimated Estimated Estimated $ Change % Change

FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT

Revenue/Offsetting Collections

Assessments 0 1,007,316 0 1,106,200 0 1,140,500 0 34,300 .00 3.10%

Interest 0 15,831 0 17,100 0 17,400 0 300 .00 1.75%

Other Income 0 15,703 0 18,600 0 18,800 0 200 .00 1.08%

Unobligated Balances from Prior Years 0 1,076,391 0 1,101,432 0 1,152,632 0 51,200 .00 4.65%

Total Revenue/Offsetting Collections 0 2,115,241 0 2,243,332 0 2,329,332 0 86,000 .00 3.83%

Expenses/Obligations

Supervise 3,412 889,111 3,472 956,544 3,472 975,675 0 19,131 N/A 2.00%

Regulate 405 105,436 412 113,433 412 115,702 0 2,269 N/A 2.00%

Charter 74 19,262 75 20,723 75 21,137 0 414 N/A 2.00%

Total Expenses/Obligations 3,891 1,013,809 3,959 1,090,700 3,959 1,112,514 0 21,814 N/A 2.00%

Net Results 0 1,101,432 0 1,152,632 0 1,216,818 0 64,186 .00 5.57%

1B – Vision, Priorities and Context 

The Office of the Comptroller of the Currency (OCC) was created by Congress to charter 

national banks, oversee a nationwide system of banking institutions, and ensure national banks 

are safe and sound, competitive and profitable, and capable of serving in the best possible 

manner the banking needs of their customers. Effective on July 21, 2011, Title III of the DoddFrank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), transferred to the 

OCC the responsibility for the supervision of federal savings associations and rulemaking 

authority for all savings associations. 

As of September 30, 2014, the OCC supervised 1,152 national bank charters and 49 federal 

branches of foreign banks in the United States with total assets of approximately $10.2 trillion, 

and 462 federal savings associations (which include 174 mutual institutions) with total assets of 

approximately $701 billion. In total, the OCC supervises about $10.9 trillion in financial 

institution assets. 

 
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OCC Vision, Core Values, and Goals 

Vision 

The OCC is a preeminent bank supervisor that adds value through proactive and risk based 

supervision; is sought after as a source of knowledge and expertise; and promotes a vibrant and 

diverse banking system that benefits consumers, communities, businesses, and the U.S. 

economy. 

The OCC culture is flexible, accountable, strategy-based, and data-driven. The OCC team of 

dedicated professionals uses substantive expertise, sound judgment, and comprehensive 

experience to assess the financial condition, management, and regulatory compliance of national 

banks and federal savings associations to ensure a vibrant and diverse banking system that 

benefits all Americans. 

Core Values 

 Integrity 

 Expertise 

 Collaboration 

 Independence 

Goals 

The OCC has established three goals outlined in its strategic plan that help support a strong 

economy for the American public: 1) A vibrant and diverse system of national banks and federal 

savings associations that supports a robust U.S. economy; 2) “One OCC” focused on 

collaboration, innovation, coordination, and process efficiency; 3) The OCC is firmly positioned 

to continue to operate independently and effectively into the future. To achieve its goals and 

objectives, the OCC organizes its activities under three programs: 1) Supervise, 2) Regulate, and 

3) Charter. Effective supervision and a comprehensive regulatory framework are the key tools 

that the OCC uses to ensure that national banks and federal savings associations operate in a safe 

and sound manner and that they provide fair access to financial services and fair treatment of 

their customers. A robust chartering program allows new entrants into the financial services 

sector while ensuring that they have the necessary capital, managerial, and risk management 

processes to conduct activities in a safe and sound manner. 

The OCC’s priorities focus on strengthening the resiliency of the institutions subject to its 

jurisdiction through its supervisory and regulatory programs and activities. A stronger and more 

resilient banking system directly supports three of the Department of the Treasury’s FY 2014-

2017 (Treasury) strategic goals: 1) Promote domestic economic growth and stability while 

continuing reforms of the financial system; 4) Safeguard the financial system and use financial 

measures to counter national security threats; and 5) Create a 21st-century approach to 

government by improving efficiency, effectiveness, and customer interaction. 

The OCC’s nationwide staff of bank examiners conducts on-site reviews of banks and provides 

sustained supervision of these institutions’ operations. Examiners analyze asset quality, capital 

adequacy, earnings, liquidity, and sensitivity to market risk for all banks, and assess compliance 
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with federal consumer protection laws and regulations1

. Examiners also evaluate management’s 

ability to identify and control risk, and assess banks’ performance in meeting the credit needs of 

the communities in which they operate, pursuant to the Community Reinvestment Act. 

In supervising banks, the OCC has the power to: 

 Examine banks; 

 Approve or deny applications for new charters, branches, capital, or other changes in 

corporate or banking structure; 

 Take supervisory and enforcement actions against banks that do not comply with laws and 

regulations or that otherwise engage in unsafe or unsound practices; 

 Remove and prohibit officers and directors, negotiate agreements—both formal (i.e., public) 

 and informal (i.e., non-public)—to change banking practices, and issue cease-and-desist 

orders as well as Civil Money Penalties (CMP); and 

 Issue rules and regulations, legal interpretations, supervisory guidance, and corporate 

decisions governing investments, lending, and other practices. 

Operations are funded primarily (approximately 97 percent) from semiannual assessments levied 

on national banks and federal savings associations. Revenue from investments in Treasury 

securities and other income comprise the remaining three percent of the OCC’s funding. The 

OCC does not receive congressional appropriations to fund any portion of its operations. 

Supervisory Activities 

The OCC influences the banking system using several means: 1) policy guidance and regulations 

that set forth standards for sound banking practices; 2) on-site examinations and ongoing off-site 

monitoring that enable the OCC to assess compliance with those standards and to identify 

emerging risks or trends; and 3) a variety of supervisory and enforcement tools – ranging from 

matters requiring the attention of the financial institution’s board and management to informal 

and formal enforcement actions – that are used to obtain corrective action to remedy weaknesses, 

deficiencies, or violations of law. 

In fiscal year (FY) 2014, the OCC published on its web site enforcement actions against 

regulated institutions, including the imposition of CMPs. The OCC continues to be actively 

involved in the residential foreclosure oversight process to ensure that all foreclosures are 

handled consistent with regulatory requirements. In addition, over the past year, the OCC took 

significant enforcement actions to address Bank Secrecy Act/Anti-Money Laundering 

(BSA/AML) violations, unfair or deceptive or abusive acts or practices, and failure to properly 

manage vendors engaged in deceptive debt collection practices. 

The OCC’s supervisory activities in FY 2014 continued to focus on evaluating and strengthening 

the quality of banks’ risk management to identify, measure, monitor, and control the build-up of 

risk, both on-and off-balance sheet. A primary focus of on-site supervisory activities was the 

quality of banks’ risk management and corporate governance practices. Specific areas of 

supervisory activities included: 1) evaluating the effectivness of credit risk rating systems, and 

 

1

 The Consumer Financial Protection Bureau assesses compliance with Federal consumer financial laws as defined 

under Title X of the Dodd Frank Wallstreet Consumer Protection Act for banks with assets over $10 billion. 
OCC - 6 

the adequacy of underwriting standards and allowance for loan and lease reserve methodologies; 

2) assessing banks’ strategic and business making decision processes to determine that banks 

comprehensively identify, assess and report all risks arising from cost reduction programs, use of 

third party vendors, and expansion into new products or services; 3) evaluating banks’ interest 

rate risk exposures and model assumptions; and 4) identifying and controlling cyber-security 

threats. 

Operational risk management – managing the risk of loss due to failures of people, processes, 

systems, and external events – has become an area of heightened risk and supervisory attention. 

Strong enterprise risk management processes have been and will continue to be a point of 

emphasis, particularly at larger institutions. In addition, the OCC continues to assess and address 

supervisory issues in the areas of fair lending, consumer protection, BSA/AML, and information 

security. 

In addition to its ongoing supervisory activities, the OCC undertook the following initiatives in 

FY 2014: 

 Heightened Standards for Large Banks: The OCC issued final guidelines that set forth new 

standards of “heightened expectations” to strengthen the governance and risk management 

practices of large national banks and federal savings associations and to enhance the 

agency’s supervision of those institutions. The standards, in the form of guidelines under 12 

Code of Federal Register (CFR) part 30 of the agency’s regulations, set forth the minimum 

expectations for the design and implementation of an institution’s risk governance 

framework and provide minimum standards for oversight of that framework by the board of 

directors. The standards embody and codify lessons learned from the financial crisis that the 

OCC has been applying to large banks. The guidelines apply to any insured national bank, 

insured federal savings association, or insured federal branch of a foreign bank, with average 

total consolidated assets of $50 billion or more. The guidelines also apply to an OCCregulated institution with less than $50 billion in average total consolidated assets if that 

institution’s parent company controls at least one other covered institution. 

 Large and Midsize Bank Supervision Peer Review: An international peer review team, 

consisting of former senior supervisory personnel from Australia, Canada, Singapore, and the 

International Monetary Fund, reviewed the OCC’s approach to the supervision of large and 

mid-sized institutions. The assessment included briefings with senior OCC staff and 

meetings with bankers and non-OCC regulators, and was based on the team’s understanding 

of successful supervisory practices in their respective countries. This team provided seven 

key recommendations to strengthen the supervisory process. Two working groups were 

formed (Policy Enhancement and Process Improvement) to review the recommendations in 

the Peer Review report and develop specific proposals based on the recommendations. 

Employee feedback was considered by the working groups prior to providing their final draft 

proposals to the Comptroller and the OCC Executive Committee, with detailed action plans 

to implement those proposals. Work is underway to implement the agreed upon actions. 

 Independent Foreclosure Review (IFR): The OCC and the Federal Reserve Board (FRB) 

previously amended consent orders against 15 mortgage servicers for deficient practices in 

mortgage servicing and foreclosure processing. During FY 2014, servicers covered by 
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mortgage servicing and foreclosure related consent orders continued to take action to correct 

deficiencies in mortgage servicing and foreclosure processes as directed by the OCC and 

FRB enforcement actions. While servicers reported that much of that work was complete, 

federal examiners continued the process of verifying and testing that work. In addition, 

pursuant to the amended consent orders that resolved the IFR, nearly $3.4 billion in payments 

to eligible borrowers under the settlement funds supervised by the OCC and FRB have been 

cashed or deposited through the end of the fourth quarter of FY 2014, which is approximately 

86 percent of total amount of settlement funds. In addition, over $11 million in remediation 

payments to borrowers of the one OCC-regulated institution that completed the IFR have 

been cashed or deposited by the end of the fourth quarter of FY 2014, which is 

approximately 88 percent of the total expected remediation. 

 Final Rules to Implement the “Volcker Rule”: The OCC worked collaboratively with the 

FRB, the Federal Deposit Insurance Corporation (FDIC), the Securities and Exchange 

Commission (SEC), and the Commodity Futures Trading Commission (CFTC) to adopt rules 

implementing section 619 of the Dodd-Frank Act, commonly referred to as the Volcker Rule. 

The final rules generally prohibit banking entities from 1) engaging in short-term proprietary 

trading of securities, derivatives, commodity futures and options on these instruments for 

their own account and 2) owning, sponsoring, or having certain relationships with hedge 

funds or private equity funds, referred to as ‘covered funds.’ Transitional examination 

procedures were also implemented to assist examiners in assessing how financial institutions 

plan to conform to the rule. 

 Third Party Relationship Guidance: To address concerns regarding the quality of risk 

management on the growing volume, diversity, and complexity of banks’ third-party 

relationships, both foreign and domestic, the OCC issued OCC Bulletin 2013 – 29, “Third 

Party Relationships: Risk Management Guidance”. This guidance provides more 

comprehensive instructions for banks to ensure these relationships and activities are 

conducted in a safe and sound manner.

 Guidance on Stress Testing Practices: In October 2012, the OCC issued a final rule that 

implements section 165(i) of the Dodd-Frank Act that requires certain companies to conduct 

annual stress tests. Specifically, this rule requires national banks and federal savings 

associations with total consolidated assets over $10 billion (covered institutions) to conduct 

an annual stress test as prescribed by the rule. In March 2014, the OCC, along with the FDIC 

and FRB, issued final guidance describing supervisory expectations for stress tests conducted 

by financial companies with total consolidated assets between $10 billion and $50 billion. 

These companies were required to perform their first stress test by March 31, 2014. 

 Guidance on Deposit Advance Products: In December 2013, the OCC issued final guidance 

on the use of deposit advance products. A deposit advance product is a small-dollar, shortterm loan that a bank makes available to a customer whose deposit account reflects recurring 

direct deposits. The guidance addresses how any bank offering these products may do so in a 

safe and sound manner without engaging in practices that would inappropriately increase 

credit, compliance, legal, and reputation risks to the institution. 
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 Guidance on Consumer Debt Sales: In August 2014, the OCC issued guidance on the 

application of consumer protection requirements and safe and sound banking practices to 

consumer debt-sale arrangements with third parties (e.g., debt buyers) that intend to pursue 

collection of the underlying obligation. 

 Guidance on the Use of Social Media: Technological advancements allow financial 

institutions to use social media in a variety of ways, including marketing; facilitating 

applications for new accounts, products, or services; and engaging with existing and potential 

customers. Because this form of customer interaction tends to be both informal and dynamic, 

and may occur in a less secure environment, it can present unique risks to financial 

institutions. In December 2013, the OCC, in collaboration with the other members of the 

Federal Financial Institutions Examination Council (FFIEC), published final supervisory 

guidance to help financial institutions identify potential risks to ensure they are aware of their 

responsibilities to address these risks within their overall risk management program. 

 Enhanced Supplemental Leverage Ratio Requirements: In April 2014, the OCC, along with 

the FDIC and FRB adopted a final rule to strengthen the supplementary leverage ratio 

standards for the largest, most systemically significant U.S. banking organizations. The final 

rule applies to any Bank Holding Company (BHC) with more than $700 billion in 

consolidated total assets or $10 trillion in assets under custody (covered BHC) and any 

Insured Depository Institution (IDI) subsidiary of these covered BHCs (covered IDI). 

Concurrent with this final rule, the agencies issued a proposal to revise the calculation of 

total leverage exposure (the denominator of the supplementary leverage ratio) in a manner 

generally consistent with revisions to the international leverage ratio framework published by 

the Basel Committee on Banking Supervision. A final rule adopting these proposed changes 

was issued in September 2014. 

 Risk Management of Home Equity Lines of Credit (HELOC) Approaching the End-of-Draw 

Periods: In conjunction with the FFEIC and Conference of State Bank Regulators, the OCC 

issued guidance describing core operating principles that should govern management’s 

oversight of HELOCs nearing their end-of-draw periods. The guidance also describes 

components of a risk management approach that promotes an understanding of potential 

exposures and consistent, effective responses to HELOC borrowers who may be unable to 

meet contractual obligations, and highlights concepts related to financial reporting for 

HELOCs. 

 The OCC National Risk Committee’s Semi-Annual Risk Perspectives: The OCC continued to 

produce this informative semi-annual report that highlights the OCC’s perspectives on key 

issues and risks that pose threats to the safety and soundness of banks. The report draws 

upon the findings of the OCC’s supervisory activities and analyses of the banking industry.

 Strengthening Cyber-Security Risk Management: The OCC created and filled a new 

position, Senior Infrastructure Officer, whose focus is cyber-security policy for the federal 

banking system. Actions taken to improve the cyber-security of the federal banking system 

include a webinar for community banks, the issuance of an alert on distributed denial-ofservice attacks, and reviews of examiner handbooks, procedures, and training materials to 
OCC - 9 

ensure that, as threats evolve, all national banks and federal savings associations can identify 

cyber risks and strengthen their risk management and control systems. Under the 

Comptroller’s leadership as the chair, the FFIEC established a Cyber-security and Critical 

Infrastructure Working Group to work with financial institutions and their critical service 

providers to effectively identify, assess, and mitigate cyber-security risks. During the summer 

of 2014, FFIEC members piloted the Cybersecurity Assessment, a cybersecurity examination 

work program at more than 500 community institutions, to evaluate those institutions’ 

preparedness to mitigate cybersecurity risks. An overview of key observations from these 

assessments was published in November 2014.

Enforcement Activities 

As needed, the OCC uses its enforcement authority to ensure that national banks and federal 

savings associations operate in a safe and sound manner and in compliance with laws and 

regulations. This authority comes in the form of formal and informal enforcement actions. 

The OCC also issued standards that it will use when it requires national banks, federal savings 

associations, or federal branches or agencies (collectively, banks) to employ independent 

consultants as part of an enforcement action to address significant violations of law, fraud, or 

harm to consumers. 

The OCC issued 75 formal enforcement actions against regulated institutions and 177 informal 

enforcement actions against institution-affiliated parties in FY 2014, resulting in the assessment 

of over $380 million in civil money penalties and over $85 million in required restitution. 

Significant enforcement activities in FY 2014 included, among others:

 Actions against banks that failed to maintain effective Bank Secrecy Act/Anti-Money 

Laundering (BSA/AML) programs and file complete, timely, and accurate suspicious activity 

reports (SAR). Among those actions was a $350 million CMP against three affiliated banks 

following a 2013 cease-and-desist order in which the banks were ordered to correct 

deficiencies in their compliance programs. The OCC also collaborated on BSA enforcementrelated activities with other federal agencies and law enforcement entities such as the 

Financial Crimes Enforcement Network. 

 The OCC’s use of its authority under the Federal Trade Commission Act in 2014 to stop 

unfair and deceptive add-on consumer products, which some banks offered through 

marketing agreements with third-party vendors. Banks were cited for offering debt 

cancellation products that did not always cover the consumer’s minimum monthly loan 

payment, as promised, and for identity theft protection products that did not deliver the 

promised benefits. Because these cases involved third parties, the OCC’s consent orders also 

required the cited banks to develop and submit risk management plans for add-on consumer 

products marketed or sold by the banks or their vendors. 

The OCC supervision and enforcement staff also work closely with their Consumer Finance and 

Protection Board counterparts on matters affecting OCC-regulated entities. 

 
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Regulatory Activities 

The OCC’s strategic objectives emphasize regulatory oversight practices that support national 

banks’ and federal savings associations’ ability to compete while maintaining safety and 

soundness. In addition, the OCC will continue its legal work of analysis and interpretation of 

national bank and federal savings association powers and authorities. 

The OCC devoted a significant amount of resources in FY 2014 to regulatory activities relating 

to implementation of the Dodd-Frank Act, Basel III, and participating on the Financial Stability 

Oversight Council. In addition to the Volcker and supplemental leverage ratio rules, described 

above, the OCC, in conjunction with the FRB and FDIC proposed and issued a final rule to 

strengthen liquidity risk management in all internationally active banking organizations, 

including bank holding companies, certain savings and loan holding companies, and depository 

institutions with more than $250 billion in total assets or more than $10 billion in on-balance 

sheet foreign exposure, and to their consolidated subsidiaries that are depository institutions with 

$10 billion or more in total consolidated assets. The rule is generally consistent with the Basel 

Committee's liquidity coverage ratio standard. 

The OCC, FRB, FDIC, SEC, Federal Housing Finance Agency, and the U.S. Department of 

Housing and Urban Development made revisions to a proposed rulemaking to implement the 

credit risk retention requirements of section 15G of the Securities Exchange Act of 1934 

(15 USC 78o-11), as added by section 941 of the Dodd Frank Act. The proposal will require 

sponsors of asset-backed securities to retain at least five percent of the credit risk of the assets 

underlying the securities and would not permit sponsors to transfer or hedge that credit risk. A 

final rule was adopted by the agencies in October 2014.

The OCC also worked with other relevant agencies to implement various provisions of the 

Dodd-Frank Act relating to mortgage appraisal requirements, appraisal requirements for higherpriced mortgages, and minimum requirements for state registration and supervision of appraisal 

management companies. 

Charter Activities 

The OCC processed 2,624 corporate applications and notices in FY 2014, of which 98 percent 

were completed within required timeframes. In order to address potential safety and soundness 

problems before they arise, the OCC may impose conditions upon bank transaction approvals 

covering, for example, capital and liquidity arrangements and deviations from business plans. 

The OCC continues to receive and process a significant share of applications involving 

resolution of problem financial institutions. 

FY 2015 and 2016 Priorities

A major focus of the OCC’s supervisory, regulatory, and administrative programs for FY 2015 

and for FY 2016 will be implementing applicable provisions of the Dodd-Frank Act and the 

enhanced capital framework under Basel III. Work will also continue to fully integrate the 

applicable regulatory, supervisory policy and examination platforms for national banks and 

federal savings associations and to ensure that these institutions comply with applicable new 

statutory and regulatory requirements. In addition, the OCC and the other federal banking 

agencies are commencing a review of the burden imposed on community institutions by existing 
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regulations pursuant to the decennial review required by the Economic Growth and Regulatory 

Paperwork Reduction Act of 1996. 

The OCC is observing signs that credit risk is building, including erosion in the underwriting 

standards for syndicated leveraged loans, and loosening of standards in the indirect auto market. 

Therefore, the OCC will continue to closely evaluate current underwriting standards by 

conducting targeted underwriting examinations and completing the annual underwriting survey. 

The OCC will be working to implement recommended actions arising out of the Large and 

Midsize Supervision Peer Review project and will also continue efforts to implement its strategic 

initiatives to make the OCC a stronger and more effective organization. Priorities and activities 

include the following: 

 Conduct examinations based on the risk profile of individual national banks and federal 

savings associations to ensure they are safe and sound, sufficiently capitalized, and comply 

with consumer protection laws and regulations; 

 Assess the adequacy of national banks and federal savings associations credit, liquidity, 

internal controls, compliance, and corporate governance processes and require corrective 

action when deficiencies or undue risk concentrations are found; 

 Monitor and assess the effectiveness of national bank and federal savings association 

mortgage servicers’ loan modification and foreclosure actions, including needed actions to 

improve the corporate governance of their processes; 

 Resolve problem national banks and federal savings associations situations effectively by 

identifying problems at the earliest possible stage, clearly communicating concerns and 

expectations to bank management through appropriate enforcement actions, and ensuring 

timely follow-up on needed corrective actions; 

 Determine whether national banks and federal savings associations have required risk 

management, internal controls, operational processes and capital to support planned new or 

expanded lines of business; 

 Determine whether national banks and federal savings associations establish and maintain 

incentive compensation policies that are consistent with principles of safety and soundness 

and do not encourage imprudent risk-taking; 

 Work with other domestic and international supervisors to implement stronger capital and 

liquidity requirements and more robust risk management standards for large financial 

institutions; 

 Enhance the OCC’s ability to anticipate, identify, and respond to increases in risk and 

emerging issues through improved supervisory analytical tools, stress testing, and market 

intelligence capabilities; 

 Combat fraud and money laundering, and protect the integrity of the financial system through 

national banks’ and federal savings associations’ compliance with the BSA/AML, and 

Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept 

and Obstruct Terrorism (USA PATRIOT) Act laws and regulations; 

 Continue to work with Treasury and other federal financial regulators to implement 

provisions of the Dodd-Frank Act and the enhanced capital and liquidity standards under 

Basel III; 

 Continue to support a competitive national banking and federal savings association system 

through entry of new charters, other bank and federal savings association structure 
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transactions, and expansion of national bank and federal savings association services and 

products in a safe and sound manner; 

 Conduct a self-assessment to identify gaps in guidance, examiner and financial institution 

training, and resources to ensure the supervisory process adequately responds to, and 

addresses, evolving cyber-security risks; and

 Maintain a highly skilled and experienced workforce by continuing efforts to identify and 

develop the next generation of bank supervision leadership, strengthen the breadth and depth 

of examiner specialty skills, and recruit and retain entry-level examiners.

Industry Outlook

The environment continues to be challenging for the OCC and the national banking and federal 

savings association industry (“federal banking system”). While the economy has been growing, 

and economic fundamentals have improved, neither the job market nor the housing sector has 

returned to normal levels. For banks, the low interest rate environment is dampening margins and 

adversely affecting earnings of many institutions. 

The federal banking system faces heightened compliance, operational, reputation, and strategic 

risks because of significant changes in laws, regulations, and accounting standards. National 

banks and federal savings associations will need to integrate these changes into their operations, 

which is likely to lead to fundamental shifts in many institutions’ business models and strategic 

plans. National banks and federal savings associations also face risks from the eventual 

normalization of interest rates. To address these challenges, the OCC will need to conduct 

ongoing assessments of emerging risks and the underlying condition of the federal banking 

system, and to prioritize and allocate resources to the areas and institutions of highest risk. 

The federal banking system has weathered a serious disruption to financial markets, a crisis in 

the mortgage sector, and a slow recovery from a long and deep recession. If system assets 

continue to grow at the rate of nominal Gross Domestic Product (GDP), and if GDP grows at its 

historical average over the next five years, assets could grow in the way shown in the following 

table. The long-term trend of consolidation in the federal banking system is likely to continue; 

the table below shows estimates of the change in number of institutions and share of assets held 

by banks with over $10 billion in assets, extrapolating from trends experienced between 2000 

and 2012. The extrapolations exclude trust companies and foreign branch offices because, 

compared to national banks and federal savings associations, their growth is less closely linked 

to underlying domestic economic trends. 

 

Number of 

institutions Assets 

Share of total system assets in 

institutions with assets >$10 

billion 

estimated change 

OCC 

banks 

OCC 

thrifts All OCC-supervised 2013 92.3% 

2013 to 2018 -24% -21% 28% 2018e 94.8% 

e = estimated 

Loan growth has been slower than usual in an economic recovery, in part because the economy 

as a whole has been growing more slowly than is usual after a severe recession. The 

combination of recession and financial crisis caused households to deleverage, in particular 
OCC - 13 

cutting into the demand for residential mortgage loans, even as tightened underwriting standards 

reduced the supply of credit from pre-recession levels. However, commercial lending has been 

growing, with outstanding commercial and industrial loans now back to their previous peak. In 

addition, many firms have accumulated cash reserves, and even medium-size firms can now 

borrow long-term at low rates in bond markets. 

Credit loss rates for the system rose sharply for all major loan categories during the financial 

crisis and recession, but are now back to or below their two-decade averages for all major loan 

categories. To strengthen their positions in the aftermath of the crisis, many financial institutions 

have raised additional capital and the largest have built up historically high shares of liquid 

assets. The result is a stronger federal banking system than existed before the crisis. 

 
OCC - 14 

Section 2 – Budget Adjustments and Appropriation Language 

2.2 – Operating Levels Table 

Dollars in Thousands

Office of the Comptroller of the Currency FY 2014 FY 2015 FY 2016

Object Classification Actual Estimated Estimated

11.1 - Full-time permanent 499,488 519,127 529,510

11.3 - Other than full-time permanent 7,165 9,247 9,432

11.5 - Other personnel compensation 2,603 3,008 3,068

11.9 - Personnel Compensation (Total) 509,256 531,382 542,010

12.0 - Personnel benefits 221,871 252,047 257,088

13.0 - Benefits for former personnel -77 225 230

Total Personnel and Compensation Benefits $731,050 $783,654 $799,328

21.0 - Travel and transportation of persons 58,239 62,942 64,200

22.0 - Transportation of things 2,331 2,335 2,382

23.1 - Rental payments to GSA 56 59 60

23.2 - Rental payments to others 58,952 63,667 64,940

23.3 - Communication, utilities, and misc charges 11,481 14,869 15,166

24.0 - Printing and reproduction 719 885 903

25.1 - Advisory and assistance services 19,811 33,642 34,315

25.2 - Other services 23,065 20,123 20,525

25.3 - Other purchases of goods & serv frm Govt accounts 6,040 11,072 11,293

25.4 - Operation and maintenance of facilities 3,689 5,475 5,585

25.7 - Operation and maintenance of equip 58,436 61,916 63,154

26.0 - Supplies and materials 5,271 7,791 7,947

31.0 - Equipment 30,730 21,030 21,451

32.0 - Land and structures 2,419 1,000 1,020

42.0 - Insurance claims and indemnities 1,520 240 245

Total Non-Personnel 282,759 307,046 313,186

Total Budgetary Resources $1,013,809 $1,090,700 $1,112,514

Budget Activities:

Supervise 889,111 956,544 975,675

Regulate 105,436 113,433 115,702

Charter 19,262 20,723 21,137

Total Budgetary Resources $1,013,809 $1,090,700 $1,112,514

FTE 3,891 3,959 3,959

2B – Appropriations Language and Explanation of Changes

The OCC receives no appropriations from Congress. 

2C – Legislative Proposals 

The OCC has no legislative proposals. 
OCC - 15 

Section 3 – Budget and Performance Plan 

3A – Supervise 

($956,544,000 from reimbursable resources): 

An effective supervision program is the cornerstone of the OCC’s activities that support its 

strategic goals. Specifically, the Supervise Program consists of ongoing supervision and 

enforcement activities that directly support the OCC’s strategic goals to 1) ensure that each 

national bank and federal savings association is operating in a safe and sound manner and is 

complying with applicable laws, rules, and regulations relative to the financial institution and the 

customers and communities it serves, and 2) provide fair access to financial services and fair 

treatment of customers. Assessing the condition and risk management practices of national 

banks and federal savings associations, and requiring corrective actions when weaknesses are 

found, directly supports Treasury’s goal of repairing and reforming the financial system. 

The OCC’s Supervision Program specifically supports the following Treasury Objectives: 

1.3: Complete implementation of financial regulatory reform initiatives and continue monitoring 

the markets for threats to stability;

1.4: Facilitate commerce by providing trusted U.S. currency, services, and products for the 

American public;

4.3: Improve the cybersecurity of our Nation’s financial sector critical infrastructure; and

4.4: Protect the integrity of the financial system by implementing, promoting, and enforcing 

anti-money laundering and counterterrorism financing standards.

 

The primary goal of the OCC’s Supervision Program is to ensure that these institutions operate 

in a safe and sound manner and in compliance with laws requiring fair treatment of their 

customers and fair access to credit and financial products. The OCC’s Supervision Program 

supports the implementation of the financial regulatory reform initiatives including those in the 

Dodd-Frank Wall Street Reform and Consumer Protection Act as well as other regulatory 

initiatives designed to strengthen the nation’s federal banking system. The OCC also monitors 

risks and threats to the stability of the federal banking system through its regular examinations of 

the institutions it supervises and other monitoring programs such as its Semi-annual Risk 

Perspectives Report, participation in the Shared National Credit Program, and its Credit 

Underwriting Survey. 

The OCC’s Supervision Program supports facilitating commerce through the goal of ensuring the 

safety and soundness of the federal banking system. Through its Supervision Program the OCC 

has taken a number of steps to improve the cyber-security of the nation’s financial sector critical 

infrastructure including organizing webinars for community bankers. The agency continues to 

update examiner handbooks, procedures, and training materials to ensure that, as threats evolve, 

all national banks and federal savings associations can identify cyber risks and strengthen their 

risk management and control systems. The OCC is an active member of the Financial Services 

Information Sharing and Analysis Center, which provides greater real-time insight into a broad 

range of potential threats to the industry and the ability to assist, when appropriate, in a 

coordinated response with other government agencies. Finally, the OCC supports protecting the 

integrity of the financial system through its examinations of compliance with BSA/AML and 
OCC - 16 

through the initiation of enforcement actions for non-compliance with BSA/AML laws and 

regulations. 

Description of Performance: 

Percentage of National Banks and Federal Savings Associations with Composite CAMELS 

Rating of 1 or 2 

The composite Capital Adequacy, Asset Quality, Management, Earnings, Liquidity, and 

Sensitivity (CAMELS) rating reflects the overall condition of a national bank or federal savings 

association. Bank regulatory agencies use the Uniform Financial Institutions Rating System, 

CAMELS, to provide a general framework for evaluating all significant financial, operational, 

and compliance factors inherent in a national bank or federal savings association. The rating 

scale is 1 through 5 of which 1 is the highest rating granted. These CAMELS ratings are 

assigned at the completion of every supervisory cycle or when there is a significant event leading 

to a change in CAMELS. 

The OCC has established a target outcome measure that 90 percent of the institutions under its 

supervision have a composite CAMELS rating of 1 or 2. Such a rating is consistent with the 

strategic goal of a safe and sound banking system, that banks maintain adequate capital and 

liquidity and have strong risk management practices. As of September 30, 2014, 87 percent of 

national banks and federal savings associations earned composite CAMELS ratings of either 1 or 

2. The increase in the number of national banks with less favorable composite CAMELS ratings 

is not unexpected at this stage of the credit cycle and reflects impaired asset quality and earnings 

that are affecting many institutions. Degradation in CAMELS also can reflect weaknesses in risk 

management systems that need corrective action. Consistent with Treasury’s goal of repairing 

and reforming the financial system and supporting the recovery of the housing market, the OCC 

has instructed bank examiners to identify and seek corrective action at an earlier stage to address 

potential problems or weaknesses. The OCC’s primary focus is to ensure that CAMELS ratings 

are an accurate reflection of each institution's current financial position, and thus the OCC would 

not take action to prematurely restore a favorable CAMELS rating even though the current 

distribution of ratings is below the target. As national bank or federal savings association 

performance and asset quality improves and directed corrective actions are implemented, the 

OCC expects CAMELS ratings to gradually improve. 

Percentage of National Banks and Federal Savings Associations that are Considered WellCapitalized 

The Federal Deposit Insurance Act established a system that classifies insured depository 

institutions into five categories (well capitalized, adequately capitalized, undercapitalized, 

significantly undercapitalized, and critically undercapitalized) based on their capital levels 

relative to their risks. The OCC has established a target outcome measure that 95 percent of 

national banks and federal savings associations will meet or exceed the well-capitalized 

threshold. 

The economic environment and resulting increase in problem assets placed a strain on some 

banks’ capital buffers that has resulted in levels below the OCCs’ target performance measure. 

The OCC works closely with problem national banks and federal savings associations to develop 

rehabilitation plans. Such plans typically include directives to improve or restore capital levels. 
OCC - 17 

These efforts, combined with a more stable operating environment, have resulted in 

improvement in this performance goal since FY 2009. As of September 30, 2014, 93 percent of 

national banks and federal savings associations were classified as well-capitalized. 

 

Percentage of National Banks and Federal Savings Associations with Consumer Compliance 

Rating of 1 or 2 

To ensure fair access to financial services and fair treatment of national bank and federal savings 

association customers, the OCC evaluates an institution’s compliance with consumer laws and 

regulations. Bank regulatory agencies use the Uniform Financial Institutions Rating System, 

Interagency Consumer Compliance Rating, to provide a general framework for evaluating 

significant consumer compliance factors inherent in an institution. Each institution is assigned a 

consumer compliance rating based on an evaluation of its present compliance with consumer 

protection and civil rights statutes and regulations, and the adequacy of its operating systems 

designed to ensure continuing compliance. Ratings are on a scale of 1 through 5 of which 1 is 

the highest rating granted. The target for FY 2015 and FY 2016 will currently remain unchanged 

at 94 percent. As of September 30, 2014, national banks and federal savings associations 

continue to show strong compliance with consumer protection regulations with 95 percent 

earning a consumer compliance rating of either 1 or 2. Under the Dodd-Frank Act, the OCC has 

enforcement and supervisory authority for those institutions with total assets of no more than $10 

billion. 

Rehabilitated National Banks and Federal Savings Associations as a Percentage of Problem 

National Banks and Federal Savings Associations One Year Ago

Problem national banks and federal savings associations ultimately can reach a point at which 

rehabilitation is no longer feasible. The OCC’s early identification and intervention with 

problem financial institutions can lead to a successful rehabilitation. As of September 30, 2014, 

39 percent of national banks and federal savings associations with composite CAMELS ratings 

of 3, 4, or 5 one year ago have improved their ratings to either 1 or 2 this year. This is below the 

target of 40 percent for FY 2014. As with the other measures, the OCC’s performance on this 

measure has been adversely affected by the underlying economic conditions facing the banking 

industry. 

As previously noted, the OCC is taking a number of steps through its Supervise and Regulate 

programs to make national banks and federal savings associations more resilient to financial 

stresses and to identify and obtain corrective action at an earlier stage, when problems can be 

addressed most successfully. These efforts include heightened capital and liquidity standards 

and increased emphasis on the need for stress testing, designed to provide financial institutions 

with stronger capital buffers to withstand unforeseen events. These are multi-year efforts that 

will continue in FY 2015 and beyond. 

Total OCC Costs Relative to Every $100,000 in National Bank and Federal Savings Association 

Assets Regulated 

Beginning in FY 2006, the OCC implemented a performance measure that reflects the efficiency 

of its operations while meeting the increasing supervisory demands of a growing and more 

complex national banking system. 
OCC - 18 

The OCC costs are those reported as total program costs on the annual audited Statement of Net 

Cost. National bank and federal savings association assets are those reported quarterly by 

national banks and federal savings associations on the Reports of Condition and Income. Total 

national bank and federal savings association assets represent the growth and complexity of the 

financial institutions under the jurisdiction of the OCC. This measure supports the OCC’s 

strategic goal of efficient use of agency resources. The OCC’s ability to control its costs while 

ensuring the safety and soundness of national banks and federal savings associations benefits all 

national bank and federal savings association customers. As of September 30, 2014, total OCC 

cost relative to every $100,000 in assets regulated was $9.75 compared to the FY 2014 target of 

$10.20. The OCC will continue its efforts to ensure that resources are used prudently and that 

programs are carried out in a cost effective manner. 

3.1.1 – Supervise Budget and Performance Plan 

Dollars in Thousands

Supervise Budget Activity

Resource Level FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016

Actual Actual Actual Actual Actual Actual Estimated Estimated

 Expenses/Obligations $597,859 $618,254 $684,273 $924,417 $873,942 $889,111 $956,544 $975,675

Budget Activity Total $597,859 $618,254 $684,273 $924,417 $873,942 $889,111 $956,544 $975,675

Measure FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016

Actual Actual Actual Actual Actual Actual Target Target

Percentage of National Banks 

and Federal Savings 

Associations That Are 

Categorized As Well 

Capitalized 

N/A N/A N/A 92.0 94.0 95.0 95.0 95.0

Percentage of National Banks 

and Federal Savings 

Associations With Consumer 

Compliance Rating of 1 or 2

N/A N/A N/A 93.0 94.0 94.0 94.0 94.0

Percentage of National Banks 

and Federal Savings 

Associations with Composite 

CAMELS Rating 1 or 2

N/A N/A N/A 76.0 80.0 90.0 90.0 90.0

Rehabilitated National Banks 

And Federal Savings 

Associations As A Percentage 

Of Problem National Banks 

One Year Ago (CAMEL 3,4, or 

5)

29.0 23.0 22.0 27.0 34.0 40.0 40.0 40.0

Total OCC Costs Relative To 

Every $100,000 in Bank And 

Federal Savings Associations 

Assets Regulated ($)

N/A N/A N/A 10.51 9.99 10.2 10.2 10.2

Key: DISC - Discontinued and B - Baseline
OCC - 19 

3B – Regulate 

($113,433,000 from reimbursable resources): 

The OCC’s Regulate Program specifically supports the following Treasury Objectives: 

1.3: Complete implementation of financial regulatory reform initiatives and continue monitoring 

the markets for threats to stability;

1.4: Facilitate commerce by providing trusted U.S. currency, services, and products for the 

American public; and

4.4: Protect the integrity of the financial system by implementing, promoting, and enforcing 

anti-money laundering and counterterrorism financing standards.

The Regulate Program supports the OCC’s strategic goal of a vibrant and diverse system of 

national banks and federal savings associations that supports a robust U.S. economy. 

Specifically, the Regulate Program consists of ongoing activities that result in the establishment 

of regulations, policies, operating guidance, and interpretations of general applicability to 

national banks and federal savings associations. These regulations, policies, and interpretations 

may establish system-wide standards, define acceptable national banking and federal savings 

association practices, provide guidance on risks and responsibilities facing national banks and 

federal savings associations, or prohibit (or restrict) national banking or federal savings 

association practices deemed to be imprudent or unsafe. They also establish standards for 

ensuring fair access to financial services and fair treatment of national bank and federal savings 

association customers. This program includes establishing examination policies and handbooks; 

interpreting administrative, judicial, and congressional proceedings; and establishing the 

applicable legal and supervisory framework for new financial services and products. 

Description of Performance: 

Specific activities undertaken in FY 2014 as part of this program were described earlier and 

included the issuance of various supervisory guidance on the Volcker rule, heightened enterprise 

risk management expectations, and third party relationship management. Significant resources 

also were spent on various Dodd-Frank rulemakings, including those pursuant to section 171(b) 

regarding minimum risk-based capital requirements; section 941 pertaining to risk retention 

requirements and associated minimum underwriting standards for asset securitizations; and 

sections 731 and 764 related to capital requirements and margin requirements on certain swap 

transactions. In FY 2015, the OCC will continue to support operations of the Financial Stability 

Oversight Council and issue Dodd-Frank rulemakings. 
OCC - 20 

3.1.2 – Regulate Budget and Performance Plan 

Dollars in Thousands

Regulate Budget Activity

Resource Level FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016

Actual Actual Actual Actual Actual Actual Estimated Estimated

 Expenses/Obligations $94,511 $97,735 $108,171 $125,416 $111,783 $105,436 $113,433 $115,702

Budget Activity Total $94,511 $97,735 $108,171 $125,416 $111,783 $105,436 $113,433 $115,702

3C – Charter 

($20,723,000 from reimbursable resources): 

The OCC’s Charter Program specifically supports the following Treasury Objectives: 

1.4: Facilitate commerce by providing trusted U.S. currency, services, and products for the 

American public; and

4.4: Protect the integrity of the financial system by implementing, promoting, and enforcing 

anti-money laundering and counterterrorism financing standards.

The Charter Program consists of ongoing activities that result in the chartering of national banks 

and federal savings associations and the evaluation of the permissibility of structures and 

activities of national banks and federal savings associations and their subsidiaries. This includes 

the review and approval of new national bank and federal savings association charters, federal 

branches and agencies, mergers, acquisitions, conversions, business combinations, corporate 

reorganizations, changes in control, operating subsidiaries, branches, relocations, and 

subordinated debt issuances. By supporting the entry of new products and institutions into the 

financial system in a manner consistent with safety and soundness, the Charter Program supports 

the OCC’s strategic goals of assuring safety and soundness while allowing national banks and 

federal savings associations to offer a full competitive array of financial services. 

 

Description of Performance: 

Percentage of Licensing Applications and Notices Completed within Established Time Frames 

The OCC’s timely and effective approval of corporate applications contributes to the nation’s 

economy by enabling national banks and federal savings associations to complete various 

corporate transactions and introduce new financial products and services. Delays in providing 

prompt decisions on applications and notices can deprive a national bank or federal savings 

association of a competitive or business opportunity, create business uncertainties, or diminish 

financial results. Time frames have been established for completing each type of application and 

notice. As of September 30, 2014, the OCC completed 98 percent of national bank and federal 

savings association applications and notices within the required time frame, above the target of 

95 percent. The OCC will continue to meet its Charter Program goals by providing staff 

training, coordination between charter and supervisory staff on safety and soundness and 

compliance matters, issuance of updated procedures, and maintaining an emphasis on 

accessibility and early consultation with national bank and federal savings association organizers 

and others proposing national bank and federal savings association structure changes. 

 
OCC - 21 

3.1.2 – Charter Budget and Performance Plan 

Dollars in Thousands

Charter Budget Activity

Resource Level FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016

Actual Actual Actual Actual Actual Actual Estimated Estimated

 Expenses/Obligations $23,628 $24,434 $27,043 $27,338 $30,486 $19,262 $20,723 $21,137

Budget Activity Total $23,628 $24,434 $27,043 $27,338 $30,486 $19,262 $20,723 $21,137

Measure FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016

Actual Actual Actual Actual Actual Actual Target Target

Percentage of Licensing 

Applications and Notices 

Completed within Established 

Timeframes

95.0 96.0 97.0 98.0 97.0 95.0 95.0 95.0

Key: DISC - Discontinued and B - Baseline

 
OCC - 22 

Section 4 – Supplemental Information 

4A – Summary of Capital Investments 

The OCC’s Information Technology (IT) strategic plan aligns information technology initiatives 

and investments to the OCC’s core mission, including the development of new or enhanced 

applications and services and the disposition of redundant or “end-of-lifecycle” applications, 

capabilities, and services. 

The IT strategic plan is implemented through the budget formulation and the Capital Planning 

and Investment Control processes. These processes ensure that all IT investments are aligned 

with the OCC’s mission, goals, objectives, and target enterprise architecture before a project is 

funded. The capital planning process reviews and prioritizes detailed business cases to promote 

technology reuse, to capitalize on enterprise opportunities, and to reduce redundant and obsolete 

capabilities and services. Invest, evaluate, and control ensures that the OCC IT strategy has 

adequate funding and staff resources to address IT investment priorities, and considers risk 

mitigation strategies for IT investments that are not meeting stated cost, time, and performance 

goals. Performance metrics are linked to the delivery, alignment, and achievement of the OCC’s 

strategic program objectives. Cost effectiveness for each investment is evaluated through regular 

benchmarking studies, featuring peer group organizations. Key metrics used to evaluate 

infrastructure include availability, reliability, utilization, defects, and customer satisfaction. 

FY 2015 and 2016 Plans The OCC has three major IT initiatives in FY 2015 and 2016. 

Servers Support Services (SSS) - The SSS supports the OCC’s server Operations and 

Maintenance. The infrastructure staff continues to build out additional capacity at the colocation facility to support the server technology refresh, business resiliency, and disaster 

recovery, and increases in enterprise storage capacity.

Telecommunications Services and Support (TSS) - The TSS includes telecommunications wide 

area network and local area network infrastructure. Remote access to the OCC systems is 

facilitated via a virtual private network, dial-in, and cellular wireless access using two-factor 

authentication. This investment also includes messaging services supporting highly mobile bank 

examiners and the OCC staff. In FY 2015, the OCC will continue an on-going effort to upgrade 

the headquarters and field office phone systems and telecom infrastructure including Local Area 

Network/Wide Area Network hardware, Video Tele-Conferencing and Voice Over Internet 

Protocol.

End User Services and Support (EUSS) - The EUSS includes help desk/customer service 

support, personal computer hardware and software operations and maintenance, asset 

management, and desktop engineering and image management. New computers and peripherals 

will be deployed to a portion of the workforce in FY 2015. In FY 2015, the OCC will also 

refresh hand-held devices. 

A summary of capital investment resources, including major information technology and nontechnology investments, can be viewed and downloaded at: 

http://www.treasury.gov/about/budget-performance/Pages/summary-of-capital-investments.aspx 

This website also contains a digital copy of this document.