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Office of the Comptroller of the Currency 

Mission Statement 

To ensure a safe and sound national banking system for all Americans. 

Program Summary by Budget Activity 

Dollars in Thousands 

FY 2008 FY 2009 FY 2010

 Office of the Comptroller of the Currency Obligated Estimated Estimated $ Change % Change

 Supervise $565,921 $647,400 $693,285 $45,885 7.09%

 Regulate $87,583 $102,343 $109,597 $7,254 7.09%

 Charter $20,212 $25,586 $27,399 $1,813 7.09%

Total Resources $673,716 $775,329 $830,281 $54,952 7.09%

Total FTE 3,031 3,127 3,161 34 1.8%

*FY 2010 data provided for informational purposes only. The budget information presented below is for FY 2009. 

FY 2009 Priorities 

• Regulate and supervise approximately 1,605 national bank charters and 50 federal 

branches of foreign banks with total assets of approximately $8.7 trillion, as of 

December 31, 2008. 

• Conduct examinations based on the risk profile of individual national banks to ensure 

they are safe and sound, sufficiently capitalized, and comply with consumer 

protection laws and regulations. 

• Work closely with the Department of Treasury to implement provision of the 

Emergency Economic Stabilization Act (EESA) of 2008 and the administration’s 

Financial Stability Plan. 

• Proactively address potential adverse changes in national bank asset quality, liquidity 

and risk profiles. 

• Ensure appropriate follow-up to market disruption issues identified in 2007 and 2008. 

• Fill key experienced and specialty examiner and bank supervision policy analyst 

positions; continue the recruitment of entry-level examiners and enhance their 

retention at the critical three/four-year point of their careers. 

• Develop the next generation of bank supervision leadership. 

• Work with other federal banking regulators to implement the banking agencies’ riskbased capital standards (Basel II). 

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

through national banks’ compliance with the Bank Secrecy Act/Anti-money 

laundering (BSA/AML), and the Uniting and Strengthening America by Providing 

Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT) 

Act laws and regulations. 

• Proactively address sound underwriting, risk management systems, and consumer 

issues presented in connection with retail banking products offered by national banks. 
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• Continue to support and defend the attributes and benefits of the national bank 

charter. 

• Continue to support a competitive national banking system through entry of new 

charters, other bank structure transactions, and expansion of bank services and 

products in a safe and sound manner. 

• Continue to refine and improve the Comprehensive Report on Mortgage 

Performance. 
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Table of Contents 

Office of the Comptroller of the Currency..................................................................... 1

Section 1 – Purpose ........................................................................................................... 4

1A – Description of Bureau Vision and Priorities.......................................................... 4 

1B – Program History and Future Outlook..................................................................... 4 

1C – Industry Outlook .................................................................................................. 16 

Section 2 – Budget Adjustments and Appropriation Language................................. 17

2.2 – Operating Levels Table........................................................................................ 17 

2.3 – Resource Detail Table.......................................................................................... 18 

2B – Appropriations Language and Explanation of Changes....................................... 18 

2C – Legislative Proposals ........................................................................................... 18 

Section 3 – Budget and Performance Plan ................................................................... 19

3.1 – Budget by Strategic Outcome .............................................................................. 19 

3A – Supervise............................................................................................................. 19 

3.2.1 – Supervise Budget and Performance Plan.......................................................... 19 

3B – Regulate............................................................................................................... 21 

3.2.2 – Regulate Budget and Performance Plan ........................................................... 21 

3C – Charter................................................................................................................. 21 

3.2.3 – Charter Budget and Performance Plan.............................................................. 22 

Section 4 – Supporting Materials .................................................................................. 23

4A – Human Capital Strategy Description ................................................................... 23 

Section 4 – Supporting Materials .................................................................................. 25

4A – Human Capital Strategy Description ................................................................... 25 

4.1 – Summary of IT Resources Table................................................................... 27 

4B – Information Technology Strategy ........................................................................ 28 

4.2 – Program Assessment Table.................................................................................. 30 
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 Section 1 – Purpose

1A – Description of Bureau Vision and Priorities 

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. 

The OCC supervises approximately 1,605 national bank charters and 50 federal branches 

of foreign banks in the United States. Total assets under the OCC supervision are 

approximately $8.7 trillion or 70 percent of total U.S. commercial banking assets. The 

average size and complexity of the institutions in the national banking system continue to 

grow, creating increasing and diverse challenges for the OCC. 

As the regulator of national banks, the OCC has established four strategic goals that help 

support a strong economy for the American public: 1) a safe and sound national banking 

system; 2) fair access to financial services and fair treatment of bank customers; 3) a 

flexible legal and regulatory framework that enables the national banking system to 

provide a full competitive array of financial services; and 4) an expert, highly motivated, 

and diverse workforce that makes effective use of OCC resources. The OCC organizes 

its activities under three programs: (1) Supervise, (2) Regulate, and (3) Charter, to 

achieve the goals and objectives outlined in its strategic plan. 

The OCC’s priorities for fiscal year (FY) 2009 include supervisory issues related to 

continued adverse changes in national bank asset quality and risk profiles, completing 

remaining work and resolving implementation issues on the federal banking agencies’ 

risk-based capital standards, compliance with BSA/AML and USA PATRIOT Act 

requirements, addressing issues raised by the range of retail banking products offered by 

national banks, and identifying and ensuring appropriate follow-up to continued 

disruption and volatility in the financial and credit markets. Coordination and 

cooperation with state regulators will be a significant focus for the agency. Filling key 

experienced and specialty examiner and bank supervision policy analyst positions, 

recruiting entry-level examiners and enhancing their retention at the critical three/fouryear point of their careers, and continuing to develop the next generation of bank 

supervision leadership are also critical initiatives of the OCC. 

1B – Program History and Future Outlook 

The OCC has its headquarters in Washington, D.C., and operates four district offices in 

Chicago, Dallas, Denver, and New York, and field and satellite offices throughout the 

United States. Resident examiner teams are located in the largest banking companies, 

and there is an examining office in London, England. 

Operations are funded primarily (approximately 96 percent) from semiannual 

assessments levied on national banks. Revenue from investments in U.S. Treasury 

securities and other income comprise the remaining four percent of the OCC’s funding. 
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The OCC does not receive congressional appropriations to fund any portion of its 

operations. 

The OCC and the banking industry continue to operate in a highly challenging and 

volatile environment. The downturn in housing and the broader economy is having an 

adverse effect on national banks’ loan portfolios, with the levels of nonperforming and 

past due loans increasing. Responding to deteriorating credit quality and ensuring 

adequate liquidity, loan loss reserves, and capital buffers are maintained, will continue to 

be major focal points for the agency and the industry in the coming year. To address 

these challenges, the OCC is identifying those banks which are the most vulnerable to the 

impact of current economic conditions, and coordinating and allocating bank supervision 

resources to the areas and institutions of highest risk. 

The following are highlights of the OCC’s FY 2008 accomplishments and specific 

FY 2009 challenges. 

Supervisory Activities

As the supervisor of national banks, the OCC has various ways to influence the national 

banking system: policy guidance and regulations that set forth standards for sound 

banking practices; on-site examinations and ongoing off-site monitoring that enable us to 

assess compliance with those standards and to identify emerging risks or trends; and a 

variety of supervisory and enforcement tools – ranging from matters requiring 

management’s attention to informal and formal enforcement actions – that are used to 

obtain corrective action to remedy weaknesses, deficiencies, or violations. 

Through examination programs, the OCC continuously supervises banks in its 

community bank, midsize and credit card bank, and large bank programs. A supervisory 

strategy is developed based on each banking institution’s risk profile and condition. 

Examination activities focus on safety and soundness, consumer compliance, BSA/AML, 

USA PATRIOT Act, fair lending, asset management, bank information technology, and 

the Community Reinvestment Act (CRA). 

Through policy programs, the OCC monitors and alerts the industry to emerging risks 

and practices that could adversely affect a bank’s safety and soundness or compliance 

with banking laws and regulations. Over the last several years, the OCC issued a series 

of supervisory guidance to address weaknesses in bank underwriting standards and credit 

practices. These guidelines addressed credit card account management; loss allowance 

practices; sound risk management practices for concentration loans in commercial real 

estate (CRE) lending; credit risk management for home equity lending; and 

nontraditional and subprime mortgage products. 

In FY 2008, supervisory activities centered on monitoring and responding to adverse 

conditions in the credit and financial markets, and national banks’ loan portfolios. 

During the market turmoil of the past year, resident examiner teams at the largest national 

banks were in frequent contact with the business and risk managers of those institutions’ 

funding, trading, and mortgage areas to enable close monitoring of market conditions, 
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deal flow, and funding availability. Information gleaned from on-site presence at these 

institutions was used to help identify and develop recommendations for enhanced risk 

management practices in several of these companies and have been issued by various 

domestic and international working groups, including the President’s Working Group on 

Financial Markets, the Senior Supervisors Group, and the Financial Stability Forum. 

More generally, the current market and economic conditions have highlighted the 

importance of banks’ ability to identify, measure, manage, and control risk exposures. 

As a result, supervisory efforts have emphasized the need for sound underwriting and 

robust credit administration; diversified funding sources, supplemented with realistic 

contingency funding plans; strong internal controls and risk management systems; and 

timely recognition of losses coupled with adequate loan loss reserves and strong capital 

cushions. While assessing credit quality, adequacy of loan loss reserves, liquidity, 

capital, and risk management practices have been and continue to be primary focus, we 

also remain cognizant of the continuing need to address supervisory issues in the areas of 

fair lending, consumer protection, BSA/AML, and information security. 

Monitoring Credit Quality - Monitoring and evaluating the quality of the loans and 

investments made by national banks are a fundamental component of the OCC’s 

supervision program. Examiners evaluate asset quality and the adequacy of a bank’s 

credit and investment risk management and controls through their on-site examination 

activities. They also ensure the bank has properly recorded any losses that have occurred 

in their loans or investments, and that the bank maintains adequate reserves for inherent 

losses in their loan portfolio. 

In addition to individual bank examinations, the OCC conducts a variety of other 

activities aimed at identifying and responding to systemic trends and emerging risks that 

could adversely affect asset quality or the availability of credit at national banks and the 

banking system. FY 2008 activities included: 

• Annual Survey of Credit Underwriting Practices - This annual survey, conducted by 

the OCC examiners and Credit Risk staff, identifies trends in lending standards and 

credit risk for the most common types of commercial and retail credit products 

offered by national banks. It provides an aggregate snapshot of how various factors, 

such as competition, are affecting how banks price and underwrite loans and whether 

the OCC believes the inherent credit risk in banks’ portfolios are increasing or 

decreasing. The 2008 survey included the 62 largest national banks whose loans, in 

aggregate, totaled $3.7 trillion, and represent approximately 83 percent of all 

outstanding loans in the national banking system. The survey found that after four 

consecutive years of eased underwriting standards, the majority of banks have 

tightened underwriting standards for both retail and commercial loans. In releasing 

this year’s survey results, the OCC reiterated its expectation that bankers maintain 

prudent credit underwriting standards throughout the economic cycle. The 2009 

survey is underway and will include questions about banks’ overall loan production 

and, for banks that have received funds under Treasury’s Troubled Asset Relief 
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Program (TARP) Capital Purchase Program (CPP), whether the TARP proceeds have 

affected the banks’ underwriting standards or loan production volume. 

• Shared National Credit Review - The annual Shared National Credit (SNC) review is 

a joint program conducted by the OCC, the Board of Governors of the Federal 

Reserve System (FRB), the Federal Deposit Insurance Corporation (FDIC), and the 

Office of Thrift Supervision (OTS). The SNC review addresses large syndicated 

loans held by multiple banks. The 2008 review covered 8,750 credit facilities (5,813 

borrowers) with commitments totaling $2.8 trillion. SNC commitments increased 

nearly $500 billion, or 22 percent, since the 2007 SNC review. The OCC continued 

work on an interagency project to modernize the collection and analysis of SNC data 

and to improve the program’s efficiency and effectiveness. This project will also 

continue in FY 2009. 

• Leveraged Lending Target Reviews and Examination Procedures - The disruptions 

that occurred in the credit markets during the past year delayed completion of longterm financing for some leveraged loans that banks had originated with the intent to 

sell (syndicate) to investors. This resulted in a number of large national banks 

retaining a higher volume of leveraged loans on their balance sheets. In FY 2008, 

Large Bank Supervision (LBS) conducted leveraged lending target reviews at the 

largest syndication banks, with a focus on syndicated pipeline management, stress 

testing, and limits setting. The OCC also issued a Leveraged Lending Handbook that 

consolidates and supplements existing guidance to bankers and examiners on the risks 

associated with leveraged lending, and the risk management systems and controls 

needed to mitigate those risks.

Bank Secrecy Act/Anti-Money Laundering - Through on-site examination activities, the 

OCC examiners evaluate banks’ compliance with BSA/AML requirements and, where 

weaknesses are noted, seek corrective action. The OCC has also developed a Money 

Laundering Risk System that provides approximately 1,500 national community bank 

charters with succinct BSA/AML risk assessment information. This information also 

enhances the OCC’s effectiveness in BSA/AML supervision. In FY 2008, the Financial 

Crime Enforcement Network (FinCEN) and the OCC each assessed Civil Money 

Penalties of $15 million against a foreign bank branch for alleged violations of the Bank 

Secrecy Act, which the bank agreed to pay under a consent order. 

Commercial Real Estate Reviews - CRE lending has been a focus within the Midsize and 

Community Bank Supervision (M/CBS) line of business due to the significant 

concentrations that some banks have developed in this sector. Approximately one quarter 

of the community banks supervised by the OCC have CRE-related concentrations 

exceeding one or both of the thresholds contained in the interagency CRE guidance 

issued in December 2006.1

 The share is even higher in areas that experienced rapid 

appreciation followed by downward pressures on home prices. 

 

1

 The concentration thresholds articulated in the guidance are commercial real estate loans (excluding 

owner-occupied real estate) exceeding 300 percent of risk-based capital, or construction and development 

loans exceeding 100 percent of risk-based capital. 
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For all banks with CRE concentrations exceeding the thresholds, the OCC is conducting 

asset quality reviews targeted on the bank’s CRE portfolio. The objective of these 

reviews is to work with bankers to identify any problems at an early stage, confirm that 

bank management is managing this risk appropriately, and, if not, to ensure bank 

management takes necessary remedial action. Some of these examinations have already 

been completed and many more are underway. Examinations of all of the banks with the 

highest risk potential have been completed. 

Residential Mortgage Lending and Reporting Metrics - The fallout from the subprime 

mortgage turmoil and the subsequent downturn in housing has been well publicized. 

National banks were not dominant originators of subprime mortgages; however, 

continued strains in the housing markets are having an adverse affect on national banks’ 

residential mortgage and home equity loan portfolios. To improve OCC’s ability to 

monitor conditions in this important market segment, in FY 2008 the OCC began 

requiring the nine largest national bank mortgage servicers to submit comprehensive 

mortgage data to the OCC on a monthly basis. In the summer of 2008, we established the 

first loan-level source of mortgage performance data with the Office of Thrift 

Supervision (OTS) by gathering validated information and reporting on more than 35 

million first-lien mortgages, which represents more than 60 percent of all mortgages in 

the country. Subsequently, OCC expanded its efforts to present the first available data on 

the performance of loan modifications across an extremely large portfolio of loans. 

Based on what we found, we have been working with the OTS and mortgage servicers to 

obtain greater detail on the affordability and sustainability of loan modifications for 

OCC’s next report in March 2009. 

The data set has grown from more than 60 elements in June 2008 to more than 90 

elements per loan in the most recent request for information from the mortgage servicers. 

The effort requires extensive work by mortgage servicers and regulators to review, 

validate, and present the data. In many cases, new data elements require changes to 

systems in order to systematically capture and provide good information. The OCC and 

OTS data collection now calls for up to 2.38 billion individual pieces of information each 

month on the loans serviced by the largest national banks and thrifts. As this additional 

data is collected, processed, and validated, the OCC and OTS intend to continue 

expanding the information contained in the quarterly public reports. 

The OCC also continues to encourage national banks to work constructively with 

borrowers who may be facing difficulties with their current mortgage obligations and to 

continue to meet the needs of credit worthy borrowers. In November 2008, the OCC and 

other federal banking agencies issued the Interagency Statement on Meeting the Needs of 

Creditworthy Borrowers. In implementing this Statement, institutions are encouraged to 

lend prudently and responsibly to creditworthy borrowers, work with borrowers to 

preserve homeownership and avoid preventable foreclosures, adjust dividend policies to 

preserve capital and lending capacity, and employ compensation structures that 

encourage prudent lending. The OCC also supports various private and public sector 
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initiatives and programs that seek to assist these borrowers, including those initiated by 

the American Securitization Forum and HOPE NOW alliance. 

Maintaining Adequate Liquidity, Loan Loss Reserves and Capital - Prompt recognition of 

losses and maintenance of strong loan loss reserves and capital are critical during periods 

of economic stress. As previously noted, ensuring banks maintain adequate loan loss 

reserves and capital has been, and will continue to be, a point of emphasis during bank 

examinations. Similarly, the OCC also continues to evaluate the adequacy of banks’ 

liquidity positions and liquidity risk management processes, especially at those 

institutions with significant concentrations in their loan or liability portfolios. In 

September 2008, the OCC joined other global supervisors in endorsing the Basel 

Committee’s Principles for Sound Liquidity Risk Management and Supervision. The 

principles underscore the importance of establishing a robust liquidity risk management 

framework that is well integrated into the bank-wide risk management process. The OCC 

and other U.S. federal banking agencies plan to issue for comment guidance on the 

application of these principles to U.S. depository institutions during the first quarter of 

2009. 

In light of current market and economic conditions, national banks have made substantial 

increases to their loan loss reserves during the past several quarters. Loan loss reserves 

as a percentage of total loans increased from 1.15 percent in the second quarter of 2007, 

to 1.91 percent in the second quarter of 2008, and to 2.16 in the third quarter of 2008. 

Should credit performance continue to worsen, as we expect, banks will need additional 

loan loss reserves. National banks have also taken steps to bolster their capital levels by 

reducing dividends and raising new capital. As of January 8, 2009, the 14 largest 

national banking organizations have raised approximately $150 billion of new capital and 

debt levels (excluding TARP) over the last five quarters. As of September 30, 2008, 99 

percent of national banks meet or exceed the “well capitalized” regulatory capital 

requirements. 

Improving Risk Management Practices - The OCC has worked closely with other 

domestic and international regulators to identify areas where risk management practices 

can be improved. These efforts have culminated in a series of reports and 

recommendations issued by the President’s Working Group, the Senior Supervisors 

Group, and the Financial Stability Forum. Broadly speaking, these reports call on 

financial institutions to: strengthen risk management practices; enhance transparency, 

disclosure, and valuation practices; and improve stress testing and firm-wide capital 

planning processes. The OCC has existing guidance that addresses some of the issues 

and recommendations highlighted in these recent reports and we have provided 

examiners at the large banks with a summary and cross reference of these policies to 

assist them with their on-site evaluations of areas where banks may need to improve their 

risk management practices. 

Basel II Capital Rules - In December 2007, the OCC and the other federal banking 

agencies (FRB, FDIC, and OTS) issued final rules that implement the advanced 

approaches established by the Basel II Capital Accord for computing risk-based 
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regulatory capital requirements by certain banking organizations. Specifically, this rule 

establishes regulatory capital requirements and supervisory expectations for credit and 

operational risks for banks that choose or are required to adopt the advanced approaches 

of the Basel II Capital Accord. The rule also articulates enhanced standards for the 

supervisory review of capital adequacy and public disclosures of an institution’s risk 

exposure and capital adequacy. The rule’s Internal Ratings Based Approach for credit 

risk and the Advanced Measurement Approaches for operational risk represent a more 

risk sensitive and comprehensive regulatory capital regime than existing risk-based 

capital rules, and will establish capital requirements and risk management expectations 

that are aligned more closely to the risks assumed by these institutions. As a result of 

these changes, this rule is now fundamentally consistent in most respects with the Basel 

II framework implemented internationally. However, the final rule retains the leverage 

ratio and Prompt Corrective Action (PCA) requirements, safeguards unique to the U.S. 

supervisory process that the agencies believe are critical for safety and soundness 

purposes. 

The recent market turmoil highlighted areas where the current Basel II capital framework 

needed to be strengthened and the OCC is actively involved in these efforts. Among the 

refinements that are recommended in the consultative paper that the Basel Committee on 

Banking Supervision issued in January 2009 are higher capital requirements for resecuritizations, such as collateralized debt obligations comprised of asset-backed 

securities; a Pillar 2 capital requirement that is an add-on to the Pillar 1 capital 

requirement; and additional disclosures related to securitizations. These 

recommendations focused on structured securities as these securities experienced 

significant losses during the recent market turmoil. The capital treatment of liquidity 

facilities that support asset-backed commercial paper conduits is also under review. The 

current market risk capital framework, based on 1996 amendments to Basel I, is also 

being reexamined. These proposed changes are designed to better reflect potential 

exposures arising from the larger portion of complex, less liquid credit products that 

institutions now hold in their trading portfolios and to further reduce the incentive for 

regulatory arbitrage between the banking and trading books. The U.S. agencies will 

jointly consider the adoption of these and other changes to the Basel II Accord for U.S. 

institutions through the agencies’ notice and comment process. 

Accounting and Financial Disclosure Issues - The OCC and other federal banking 

agencies continue to work closely with the Securities and Exchange Commission (SEC) 

and the Financial Accounting Standards Board (FASB) on various accounting and 

disclosure issues related to the recent market disruptions, including various 

interpretations and application of guidance related to mortgage loan modifications, fair 

value measurement in illiquid markets, and accounting for asset-backed commercial 

paper and structured financial instruments. The agencies provided input as needed to the 

FASB as it developed revised accounting and disclosure standards governing 

securitization transactions and off-balance sheet entities. The FASB issued exposure 

drafts of those revised standards on September 15, 2008. The agencies are participating 

in a number of roundtable meetings with various market participants in order to ensure 
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that they have a thorough understanding of how the proposed accounting changes would 

affect banking organizations from a regulatory perspective. 

Emergency Economic Stabilization Act and Financial Stability Plan - The OCC is 

working closely with the U.S. Treasury Department and the other federal banking 

agencies to implement provisions of the Emergency Economic Stabilization Act of 2008 

(EESA) and the administration’s Financial Stability Plan. These efforts include 

providing technical assistance to the U.S. Treasury Department on the design and 

operation of the various capital and asset purchase programs, as well as the design and 

execution of the stress tests that will be applied to major financial institutions. The OCC 

chairs the interagency TARP CPP Council, which serves as an advisory body to the 

Treasury Department to ensure that recommendations for CPP participation are applied 

effectively and consistently across the federal banking agencies and Qualifying Financial 

Institution (QFI) applicants. The OCC is also coordinating with the FDIC on the 

application of the FDIC’s Temporary Liquidity Guarantee Program (TLGP). 

Resolving Problem Banks - The goal of OCC’s supervision is to identify and correct 

potential issues at an early stage, before they adversely affect the safety and soundness of 

the banking system or the viability of any individual bank. Despite these efforts, given 

current market conditions, we expect to see an increase in problem banks that will require 

more in-depth supervisory attention. As a bank reaches this stage, the OCC’s efforts 

focus on developing a specific plan that takes into consideration the ability and 

willingness of management and the board to correct deficiencies in a timely manner and 

return the bank to a safe and sound condition. In most instances these efforts, coupled 

with the commitment of bank management, result in a successful rehabilitation of the 

bank. The OCC makes every effort to address and seek correction of bank problems 

through its examination program. However, when problems are serious and welldocumented, enforcement action may be warranted to address violations of laws, rules, 

and regulations; unsafe or unsound banking practices and breaches of fiduciary duty; and 

noncompliance with OCC directives or orders by national banks, their insiders, and other 

affiliated parties. 

The OCC has a variety of tools that were helpful in dealing with the industry-wide 

increase in problems and troubled institutions in FY 2008, including statutory Prompt 

Corrective Action determinations when a bank’s capital deteriorates below specified 

thresholds, requirements for increased capital and liquidity sources, required changes in 

bank management, and prior OCC approval of changes in business plans. 

In combating mismanagement during FY 2008, the OCC took such formal enforcement 

actions as temporary cease and desist orders, final cease and desist orders, removal or 

prohibition orders, CMPs, and formal agreements. Documents relating to OCC 

enforcement actions can be found on the OCC’s Web site at www.occ.gov. 

There will be cases, however, where the situation is of such significance that the OCC 

will require the sale, merger, or liquidation of the bank, if possible. Where that is not 

possible, the FDIC may be appointed as receiver. The OCC works closely with the FDIC 
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in these cases to affect least cost resolution, consistent with the provisions of the Federal 

Deposit Insurance Corporation Improvement Act. During FY 2008, there were five 

national bank failures where the OCC appointed the FDIC as receiver. As of February 

11, 2009, there have been two national bank failures thus far in FY 2009. 

Fair Access to Financial Services and Fair Treatment of Bank Customers - The OCC 

fulfills its strategic goal of fair access to financial services and fair treatment of bank 

customers through its ongoing supervisory programs for national banks and their 

operating subsidiaries. These programs include ongoing supervisory examinations to 

ensure compliance with fair lending laws, the CRA, section 5 of the Federal Trade 

Commission Act (prohibiting unfair or deceptive acts and practices), and other consumer 

laws and regulations. In addition to supervisory activities, the OCC issues guidance and 

handbooks, and offers training to bankers and bank directors to help them understand and 

meet their compliance and CRA obligations. 

 

Fair Lending - The OCC’s fair lending supervisory process is designed to assess and 

monitor the level of fair lending risk in every national bank. The OCC assesses 

compliance with fair lending laws and regulations; obtains corrective action when 

significant weaknesses or deficiencies are found in a bank’s policies, procedures, and 

controls relating to fair lending; and ensures enforcement action is taken when warranted. 

This includes referrals to the Department of Justice and notifications to the Department of 

Housing and Urban Development. 

As described in more detail in the Supervision section, the OCC responded to the 

mortgage crisis by encouraging national banks to work with consumers, supporting 

private and public sector initiatives and programs that seek to assist these borrowers, and 

collecting and analyzing extensive mortgage lending and workout data from the largest 

national banks. 

In September 2008, the OCC held a Fair Lending Conference emphasizing the role of 

statistical analysis and models in fair lending compliance and enforcement. The 

conference was attended by nearly 300 bankers, regulators and others. 

Community Development- In August 2008, the OCC issued a community development 

investments interim final rule that implements a provision of the Housing and Economic 

Recovery Act of 2008 that expanded national banks’ authority to make public welfare 

investments pursuant to 12 USC 24(eleventh). The interim final rule authorizes a 

national bank and its subsidiaries to make public welfare investments directly or 

indirectly if the investments primarily benefit low- and moderate-income individuals, 

low- and moderate-income areas, or other areas targeted by a governmental entity for 

redevelopment, or if the investment would receive consideration under the CRA 

regulations as a “qualified investment.”

The OCC actively supports the efforts of national banks to engage in sound and 

successful community development activities and processes community development 

investment notices and proposals under 12 CFR Part 24. The OCC also conducts 
OCC - 13 

outreach with a variety of organizations, including advocacy groups, research 

organizations, community development practitioners, and community development 

membership organizations whose constituencies include or affect low- and moderateincome consumers, distressed communities, and small and minority-owned businesses. 

While maintaining its consumer help website, which was launched in 2007 

(www.helpwithmybank.gov), the OCC continued to seek ways to work with the other 

federal financial regulatory agencies to better assist consumers when they have questions 

or need help in resolving issues with their banks. The OCC also issued one of its periodic 

Community Development Insights reports on uses of the Low-Income Housing Tax 

Credit, and also published a Community Developments newsletter focusing on 

preservation of affordable rental housing. 

Foreclosure Fraud - During FY 2008, the OCC issued a consumer advisory providing 

advice to help prevent borrowers from becoming victims of foreclosure rescue frauds. 

The OCC and the other financial regulatory agencies also issued final illustrations for 

helping consumers understand certain hybrid adjustable rate mortgage products. The 

illustrations are intended to assist institutions in providing this information to consumers, 

as recommended in the agencies’ 2007 Statement on Subprime Mortgage Lending. The 

OCC also participated in the July 2008 Forum on Mortgage Lending for Low- and 

Moderate- Income Households sponsored by the FDIC. 

 

Consumer Protection - During FY 2008, the OCC continued its work with the other 

federal banking agencies to improve consumer protection. In November 2007, the 

agencies issued final rules on identity theft “red flags” and address discrepancies, 

implementing sections 114 and 315 of the Fair and Accurate Credit Transactions Act of 

2003, as well as final rules providing consumers with an opportunity to “opt out” before a 

financial institution uses information provided by an affiliate company to market its 

products and services to the consumer, implementing section 214 of the Act. In 

December 2007, the agencies and the Federal Trade Commission proposed regulations 

and guidelines to help ensure the accuracy and integrity of information provided to 

consumer reporting agencies and allow consumers to directly dispute inaccuracies. 

Enforcement - As needed, the OCC uses its enforcement authority to address problems 

and noncompliance arising from unfair treatment of bank customers, including failure to 

meet requirements for proper disclosures relating to financial products and services. 

In FY 2008, the OCC entered into a settlement agreement directing a national bank to 

make restitution to consumers harmed by its relationships with telemarketers and third 

party processors, with an estimated claim total of $125 million; to contribute to a 

consumer education program directed at the elderly; and to pay a $10 million Civil 

Money Penalty. 

Natural Disaster Relief - The OCC also outlined measures to assist national banks and 

their customers affected by hurricanes, tornadoes, and other natural disasters. 
OCC - 14 

Customer Assistance - The OCC’s Customer Assistance Group (CAG) assists consumers 

who have questions or complaints about national banks and their operating subsidiaries. 

As of September 30, 2008, the CAG had received 77,000 contacts from consumers in the 

form of telephone calls, letters, faxes, and e-mails. The CAG had 95,000 contacts in 

2008. 

During FY 2008, outreach activities to state bank regulators continued. Memorandums 

of Understanding (MOU) have now been signed between the OCC and 43 state banking 

departments and the Commonwealth of Puerto Rico with several others in process. The 

agreements detail ways to gain efficiencies in processing cases by streamlining the way 

the states and the CAG exchange bank customers’ complaint information. The CAG 

goals for FY 2009 include a continuation of outreach activities to state regulators and 

others. 

Regulatory Activities 

As one of its four strategic goals, the OCC strives to maintain a flexible legal and 

regulatory framework that enables the national banking system to provide a full, 

competitive array of financial services. In FY 2008, the OCC published a final rule to 

reduce unnecessary regulatory burden and revise and update various OCC regulations. 

The OCC final rule included measures updating and revising the qualifying standards and 

after-the-fact notice procedures that apply to national bank operating subsidiaries. The 

final rule expanded the list of operating subsidiary activities that are permissible upon 

filing an after-the-fact notice. Other revisions reduced the burden associated with 

applications for fiduciary powers and intermittent branches, change in bank control 

notices, and requirements to make securities filings. The final rule also included other 

measures to incorporate previously published interpretive opinions, including, electronic 

banking activities, and to harmonize the OCC rules with rules issued by other federal 

agencies, to update OCC rules to reflect recent statutory changes, and to make technical 

and conforming amendments to improve clarity and consistency. The OCC also 

amended its securities offering disclosure rules to eliminate the general requirement that a 

national bank in organization include audited financial statements as part of a public 

offering. 

The OCC issued an interim final rule to add a provision to its part 32 lending limits 

regulation addressing temporary funding arrangements in emergency situations. The 

OCC’s Comptroller John C. Dugan issued a statement in March 2008 stating that the 

OCC would play a positive and constructive role in the discussion of the Treasury 

Department’s Blueprint for a Modernized Financial Regulatory Structure. 

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

national banks’ ability to compete while maintaining safety and soundness. The OCC 

issued its annual publication, “2007 Significant Legal, Licensing, and Community 

Development Precedents for National Banks” as well as the cumulative companion 

edition of “Permissible Activities for a National Bank.” Determinations during FY 2008 

included permissible types of customer-driven derivatives transactions, offering debt 

cancellation contracts, and permissibility of charging fees to non account holders for 
OCC - 15 

cashing an official check. In FY 2009, the agency will continue to consider and issue 

opinions regarding the safe and sound implementation of bank activities and products. 

The OCC will also continue to provide case-by-case analysis, when appropriate, with 

respect to the applicability of state law and the exclusivity of the agency’s visitorial 

authority under the national banking laws, in order for national banks to operate 

efficiently under uniform national standards. 

Charter Activities

The OCC made several significant licensing decisions in FY 2008 involving national 

bank business realignments and acquisitions. In addition, the OCC implemented 

streamlined regulatory requirements and process improvements for de novo bank 

charters, resulting in reduced costs and barriers, and enhanced value of the national bank 

charter. 

The OCC suspended all licensing transaction application fees in FY 2008. The agency is 

providing increased local assistance to new bank organizers prior to formal application 

filing, with an emphasis on technical assistance, review of draft documents and 

introduction to key OCC staff involved in the application review and future supervision 

of the bank. With regard to raising capital, the OCC has reduced impediments by 

expediting review of offering materials, eliminating a requirement for fidelity bonding if 

the escrow agent is bonded or insured, eliminating a requirement for audited financial 

statements during the in-organization phase, and raising the shareholder threshold for 

required Securities Exchange Act filings. Special legal lending limit rules that expand 

small business, farm and residential real estate lending opportunities are now available to 

new national banks. 

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 Licensing Department works closely with Supervision and Law units in 

consideration of the viability and legality of proposals for dealing with problem banks. 

Proposed restructurings that may avoid bank failures and their associated costs can 

include mergers, purchases and assumptions, and temporary bridge banks. 

In FY 2009, the agency conditionally approved the first “shelf charter” to expand the 

pool of qualified bidders for troubled institutions. Shelf charters remain inactive until 

such time as the investor group holding the charter is in a position to acquire a troubled 

institution. 

In FY 2009, the OCC plans to implement improved functionality for finding and 

retrieving licensing application information from the agency’s public website. 
OCC - 16 

1C – Industry Outlook 

The recent sharp drop in bank earnings follows 15 years of solid growth. Over that time, 

banks introduced many new products, which contributed to earnings growth. But the 

novelty and complexity of some of these products added to the risks faced by individual 

banks, and by the banking system as a whole, in ways that were often not anticipated 

when the products were introduced. 

Over the next five years, bank assets are likely to grow at about the same rate as nominal 

Gross Domestic Product (GDP). This is consistent with historical experience and with 

the status of banking as a mature industry, in which profits grow over the long-term at 

about the rate of nominal GDP. 

Share of Total System Assets

Assets ($t) Number Assets ($t) Number in Banks Over $10 Billion

2007 11.1 7283 7.8 1632 79.1%

2012e 14.2 6586 10 1471 85.0%

Commercial Banks National Banks

The number of banks has fallen steadily for at least two decades. The long-term trend of 

bank consolidation is likely to continue in both national banks and all commercial banks. 

In 2007, 86 banks had assets exceeding $10 billion, while about 3,100 banks had assets 

under $100 million. By 2012, the number of banks over $10 billion is expected to remain 

about the same, while the number of banks under $100 million is expected to decline. As 

several non-banks have recently been brought into the banking system, the relative size of 

the banking system has increased; this trend may continue as well. 

Large banks will continue to dominate the industry. Banks with over $10 billion in assets 

now account for 80 percent of national bank system assets; this share has been increasing, 

and this trend is expected to continue. 

Until about five years ago, national banks consistently accounted for about 56 percent of 

all commercial bank assets. Since then, a series of mergers and conversions have 

increased the national bank share to over 70 percent of commercial bank assets. 

Risks to the banking system include an intensification of the deterioration in real estate, 

continued problems in the credit markets, and an extended economic slowdown. 
OCC - 17 

Section 2 – Budget Adjustments and Appropriation Language 

2.2 – Operating Levels Table 

Bureau: Office of Comptroller of the Currency FY 2008 

Obligated

FY 2009 

Estimated

FY 2010 

Estimated

% Change 

FY 2009 

to FY 2010

 

FTE 3,031 3,127 3,161 1.09%

Object Classification: 

11.1 - Full-time permanent 331,774 370,855 395,911 6.76%

11.3 - Other than full-time permanent 7,821 7,685 8,204 6.75%

11.5 - Other personnel compensation 1,753 2,140 2,285 6.78%

11.8 - Special personal services payments 111 0 0 0.00%

12 - Personnel benefits 107,109 125,577 139,000 10.69%

13 - Benefits for former personnel 325 195 190 -2.56%

21 - Travel and transportation of persons 41,385 53,645 58,966 9.92%

22 - Transportation of things 1,606 2,579 3,196 23.92%

23.1 - Rental payments to GSA 2,821 2,513 2,601 3.50%

23.2 - Rental payments to others 29,499 36,398 37,761 3.74%

23.3 - Comm, utilities, and misc charges 10,654 13,346 14,057 5.33%

24 - Printing and reproduction 938 1,190 1,234 3.70%

25.1 - Advisory and assistance services 25,237 38,872 38,524 -0.90%

25.2 - Other services 16,294 18,142 20,665 13.91%

25.3 - Other purchases of goods and services from 

Govt. accounts 

4,561 5,936 7,082 19.31%

25.4 - Operation and maintenance of facilities 2,986 4,882 3,954 -19.01%

25.7 - Operation and maintenance of equip 46,675 50,528 53,675 6.23%

26 - Supplies and materials 6,201 7,000 7,693 9.90%

31 - Equipment 16,315 16,835 17,424 3.50%

32 - Land and structures 19,576 16,961 17,809 5.00%

42 - Insurance claims and indemnities 75 50 50 0.00%

Total Budget Authority $673,716 $775,329 $830,281 7.09%

 

Budget Activities: 

Supervise 565,921 647,400 693,285 7.09%

Regulate 87,583 102,343 109,597 7.09%

Charter 20,212 25,586 27,399 7.09%

Total Budget Authority $673,716 $775,329 $830,281 7.09%

 
OCC - 18 

2.3 – Resource Detail Table 

FTE Amount FTE Amount FTE Amount FTE Amount

Budgetary Resources:

Revenue / Offsetting Collections

Assessments $716,448 $756,800 $810,500 7.10%

Interest 21,349 25,500 26,300 3.14%

Other Income 2,615 1,700 1,700 0.00%

Total Revenue / Offsetting Collections $740,412 $784,000 $838,500 6.95%

 Unobligated balances, Start of year 667,661 660,261 668,932 1.31%

 Recoveries of prior year obligations 0 0 0 0.00%

 Net transfers (includes capital transfers) 0 0 0 0.00%

Total budgetary resources available $1,408,073 $1,444,261 $1,507,432 4.37%

Expenses/Obligations

Supervision 2,546 565,921 2,597 $647,400 2,626 693,285 1.12% 7.09%

Regulate 394 87,583 435 102,343 440 109,597 1.15% 7.09%

Charter 91 20,212 95 25,586 95 27,399 0.00% 7.09%

Total Expenses / Obligations 3,031 $673,716 3,127 $775,329 3,161 $830,281 1.09% 7.09%

Estimated to FY 2010

FY 2008 FY 2009 FY 2010 FY 2009

Obligated

% Change

Estimated

Net Results $734,357 $668,932 $677,151 1.23%

2B – Appropriations Language and Explanation of Changes 

OCC receives no appropriations from Congress. 

2C – Legislative Proposals 

OCC currently has no legislative proposals. 
OCC - 19 

Section 3 – Budget and Performance Plan

This table lists all FY 2010 resources by strategic goal, objective and outcome outlined in 

the FY 2007-2012 Treasury Department Strategic Plan. The Treasury Strategic Plan is a 

corporate level plan for the Department that provides a description of what the agency 

intends to accomplish over the next five years. 

For detailed information about the FY 2007-2012 Treasury Strategic Plan, please go to: 

http://www.treasury.gov/offices/management/budget/strategic_plan.shtml

3.1 – Budget by Strategic Outcome 

Dollars in Thousands 

Treasury Strategic Outcome FY 2009 

Enacted

FY 2010 

Request Percent Change

 Economic competitiveness 127,929 136,996 7.1%

 Fin. & econ. Crises 647,400 693,285 7.1%

Total $775,329 $830,281 7.1%

3A – Supervise ($647,400,000 from reimbursable programs): The Supervise program 

consists of those ongoing supervision and enforcement activities undertaken to ensure 

that each national bank is operating in a safe and sound manner and is complying with 

applicable laws, rules, and regulations relative to the bank and the customers and 

communities it serves. This program includes bank examinations and enforcement 

activities; resolution of disputes through the National Bank Appeals process; ongoing 

monitoring of banks; and analysis of systemic risks and market trends in the national 

banking system or groups of national banks, the financial services industry, and the 

economic and regulatory environment. 

3.2.1 – Supervise Budget and Performance Plan 

Supervise Budget Activity

FY 2006 FY 2007 FY 2008 FY 2009 F

Resource Level Obligated Obligated Obligated Estimated Est

 Appropriated Resources $0 $0 $0 $0 

 Reimbursable Resources $471,882 $528,622 $565,921 $647,400 

Total Resources $471,882 $528,622 $565,921 $647,400

Budget Activity Total $471,882 $528,622 $565,921 $647,400

FY 2006 FY 2007 FY 2008 FY 2009 Budget Activity Performance Measure Actual Actual Actual Target

Y 2010

imated

$0

$693,285

$693,285

$693,285

FY 2010

Target

Supervise Percentage of national banks that are 

categorized as well capitalized (%) (Oe) 

99.00 99.00 99.00 95.00 95.00

Supervise Percent of national banks with composite 

CAMELS rating of 1 or 2 (%) (Oe) 

95.00 96.00 92.00 90.00 90.00

Supervise Rehabilitated national banks as a percentage 

of the problem national banks one year ago 

(CAMELS 3, 4 or 5) (%) (Oe) 

46.00 52.00 47.00 40.00 40.00

Supervise Percentage of national banks with consumer 

compliance rating of 1 or 2 (%) (Oe) 

94.00 97.00 97.00 94.00 94.00

Supervise Total OCC costs relative to every $100,000 in 

bank assets regulated. ($) (E) 

8.57 8.89 8.39 9.22 9.22

Key: Oe - Outcome Measure, E - Efficiency Measure, Ot - Output/Workload Measure, and M - Management/Cust. Satisfaction 
OCC - 20 

Well Capitalized National Banks - 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. Through September 

30, 2008, 99 percent of national banks were classified as well capitalized. National 

banks’ capital has remained at this consistently high level for the past several years. 

National Banks with Composite CAMELS Rating of 1 or 2 - The composite CAMELS 

(Capital adequacy, Asset quality, Management, Earnings, Liquidity, and Sensitivity to 

market risk) rating reflects the overall condition of a bank. 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 bank. The rating scale is 1 through 5 of which 1 is the highest rating 

granted. CAMELS ratings are assigned at the completion of every supervisory cycle or 

when there is a significant event leading to a change in CAMELS. Through September 

30, 2008, 92 percent of national banks earned composite CAMELS rating of either 1 or 2, 

signifying an overall safe and sound national banking system.

Rehabilitated National Banks - Problem banks ultimately can reach a point at which 

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

problem banks can lead to successful remediation of these banks. The OCC recommends 

corrective actions to problem banks for improving their operations and, as a result, 47 

percent of banks with composite CAMELS ratings of 3, 4, or 5 one year ago have 

improved their ratings to either 1 or 2 this year. This exceeds the OCC’s goal of 40 

percent. 

National Banks with Consumer Compliance Rating of 1 or 2 - To ensure fair access to 

financial services and fair treatment of bank customers, the OCC evaluates a bank’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 assimilating and evaluating significant 

consumer compliance factors inherent in a bank. Each bank 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 

in increasing order of supervisory concern. National banks continue to show strong 

compliance with consumer protection regulations with 97 percent earning a consumer 

compliance rating of either 1 or 2 through September 30, 2008. 

Total OCC Costs Relative to Every $100,000 in Bank Assets Regulated - Beginning inFY 

2006, the OCC implemented a performance measure—Total OCC Costs Relative to 

Every $100,000 in Bank Assets Regulated—that reflects the efficiency of its operations 

while meeting the increasing supervisory demands of a growing and more complex 

national banking system. OCC costs are those reported as total program costs on the 

annual audited Statement of Net Cost. Bank assets are those reported quarterly by 

national banks on their Reports of Condition and Income. Total national bank assets 
OCC - 21 

represent the growth and complexity of the national banking system. 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 the national banking 

system benefits all national bank customers. 

3B – Regulate ($102,343,000 from reimbursable programs): The Regulate program 

consists of those ongoing activities that result in the establishment of regulations, 

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

banks. These regulations, policies, and interpretations may establish system-wide 

standards, define acceptable banking practices, provide guidance on risks and 

responsibilities facing national banks, or prohibit (or restrict) banking practices deemed 

to be imprudent or unsafe. This program includes the establishment of examination 

policies, handbooks, and interpretations for examiners as well as representation of the 

OCC’s regulatory authorities and interpretations in administrative, judicial, and 

congressional hearings. 

3.2.2 – Regulate Budget and Performance Plan 

Regulate Budget Activity

FY 2006 FY 2007 FY 2008 FY 2009 FY 2010

Resource Level Obligated Obligated Obligated Estimated Estimated

 Appropriated Resources $0 $0 $0 $0 $0

 Reimbursable Resources $70,992 $91,296 $87,583 $102,343 $109,597

Total Resources $70,992 $91,296 $87,583 $102,343 $109,597

Budget Activity Total $70,992 $91,296 $87,583 $102,343 $109,597

FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 Budget Activity Performance Measure Actual Actual Actual Target Target

Key: Oe - Outcome Measure, E - Efficiency Measure, Ot - Output/Workload Measure, and M - Management/Cust. Satisfaction 

There are no measures specified at this time. 

3C – Charter ($25,586,000 from reimbursable programs): The Charter program 

involves those ongoing activities that result in the chartering of national banks as well as 

the evaluation of the permissibility of structures and activities of national banks and their 

subsidiaries. This includes the review and approval of new national bank charters, 

federal branches and agencies, mergers, acquisitions, conversions, business 

combinations, corporate reorganizations, changes in control, operating subsidiaries, 

branches, relocations, and subordinated debt issues. 
OCC - 22 

3.2.3 – Charter Budget and Performance Plan 

Charter Budget Activity

FY 2006 FY 2007 FY 2008 FY 2009 FY 201

Resource Level Obligated Obligated Obligated Estimated Estimate

 Appropriated Resources $0 $0 $0 $0 

 Reimbursable Resources $13,952 $18,515 $20,212 $25,586 $27,

Total Resources $13,952 $18,515 $20,212 $25,586 $27,

Budget Activity Total $13,952 $18,515 $20,212 $25,586 $27,

FY 2006 FY 2007 FY 2008 FY 2009 FY 2 Budget Activity Performance Measure

0

d

$0

399

399

399

010

Actual Actual Actual Target Target

Charter Percentage of licensing applications and 

notices completed with established timeframes 

(%) (Oe) 

94.00 96.00 95.00 95.00 95.00

Key: Oe - Outcome Measure, E - Efficiency Measure, Ot - Output/Workload Measure, and M - Management/Cust. Satisfaction 

Description of Performance: 

Licensing Applications and Notices Completed within Time Frames 

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

nation’s economy by enabling national banks to complete various corporate transactions 

and introduce new financial products and services. Delays in providing prompt decisions 

on applications and notices can deprive a bank 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. The OCC completed 95 

percent of applications and notices within the time standard through September 30, 2008. 

Institutions receiving decisions on their corporate applications and notices rated the 

OCC’s overall licensing services an average of 1.2. The licensing survey is based on a 

five-point rating scale, in which 1 indicates outstanding and 5 indicates significantly 

deficient. 

 

For detailed information about each performance measure, including definition, 

verification and validation, please go to: 

http://www.treasury.gov/offices/management/dcfo/accountability-reports/
OCC - 23 

Section 4 – Supporting Materials 

4A – Human Capital Strategy Description 

The OCC has developed bureau-specific human capital goals to meet its overall strategic 

goals of ensuring the safety and soundness of national banks and maintaining an expert, 

highly motivated, and diverse workforce. The first is to align and employ the OCC 

workforce resources consistent with current and projected agency priorities. To help 

achieve this goal, on an annual basis, the OCC identifies business changes and 

imperatives, and assesses its current staffing structure to identify potential recruitment 

challenges and skills imbalances/gaps. The agency then develops strategies to meet these 

challenges and approve incentives specifically designed to address them. Other strategies 

include: 1) using all qualified personnel on priority assignments, realizing the increasing 

dependence and need for “fungibility” among and within various disciplines; 2) using the 

midsize/community banks area as the primary entry-level recruitment, training, and 

development vehicle to provide a diverse bank examiner selection pool for many 

departments and divisions in the bureau; and 3) identifying skill gaps and using them to 

establish recruitment and training priorities as part of the OCC’s ongoing strategic 

planning process. The OCC has implemented a number of programs to increase and 

strengthen its examiner and leadership pools. The OCC has a highly successful college 

hiring and training team program to ensure a steady pipeline of entry-level bank 

examiners. Since the program’s inception in FY 2003, almost 705 examiners have been 

hired, including more than 122 in FY 2008. 

The OCC has focused heavily on recruiting the expertise needed to fill positions in the 

agencies Chief National Bank Examiner’s office and Large Bank Supervision line of 

business. The OCC has also recognized the challenge of ensuring that it has the skill sets 

needed now and in the future to supervise the increasingly complex array of activities and 

businesses found in the national banking system. As a result, the OCC recently 

developed a framework to assess where and when specialized skills are needed and to 

ensure it has the staffing necessary to meet those needs. This framework, the Specialty 

Skills Assessment, allows the OCC to measure gaps in its current skill levels in eight 

critical business areas (Asset Management, Bank Information Technology, Capital 

Markets, Compliance, Commercial Lending, Retail Lending, Mortgage Banking, and 

Operational Risk) and to develop strategic plans to fill those gaps. It establishes a 

standard process to identify an individual’s specialty skills, which can be compared to 

actual examination resources necessary for the effective supervision of national banks. 

Assessment results will aid examination staffing and recruiting initiatives, and provide 

employees and managers with a valuable tool that can be used to identify developmental 

opportunities to further an individual’s career objectives. 

In further recognition of the need to provide expert-level support related to the current 

financial and housing market situations, the OCC requested and was granted authority to 

waive the dual compensation reduction to reemploy certain annuitants. The extensive 
OCC - 24 

knowledge and superior skills reemployed annuitants have developed in specific specialty 

areas are an invaluable resource. 

A second human capital goal is to develop current and future leaders who demonstrate 

strong strategic, people management, and technical skills. To achieve this goal, the OCC 

is piloting a leadership development program, LeaderTRACK, based on identified 

competencies. The program, which began in FY 2007, offers participants three sixmonth assignments, with significant managerial and supervisory roles, that will develop 

leadership skills rather than prepare them for a specific position. There have been ten 

participants in this program since its inception. The OCC also continues to focus on 

aligning leadership performance expectations with organizational goals, and preparing 

leaders to create and sustain a productive work environment and assume responsibility 

for developing staff. 

The OCC operates under a merit-based pay and performance system. Annual across-theboard increases are not granted. Salary increases are awarded based on merit to reward 

employee performance, employee development that is relevant to the OCC’s needs, and 

employee contributions to the OCC’s priorities. 

Therefore, a third human capital goal is to maintain strategic compensation/benefit 

programs and performance systems that link with organizational goals and mission 

accomplishment, enable the OCC to recruit and retain critical positions, and reward high 

performers. To assure the agency accomplishes this goal, the OCC has begun a study of 

the compensation program to assess the appropriateness of the pay bands, evaluate the 

relationship between performance management and merit pay systems, and evaluate the 

current compensation policies and programs to ensure they support the OCC in attracting, 

retaining, and motivating a high-caliber workforce. 

The OCC is confident these strategies will enable it to avoid any critical deficiencies in 

terms of having the right numbers of people with the right skills to accomplish its 

mission. 

The OCC Makes Top Ten List of Best Places to Work in Federal Government - The OCC 

ranked fourth out of more than 222 federal agency sub-components for best places to 

work in the federal government in 2006, according to the Partnership for Public Service 

and American University’s Institute for the Study of Public Policy Implementation. The 

list reflects the responses of more than 221,000 randomly selected federal employees who 

completed the Office of Personnel Management’s 2006 Federal Human Capital Survey. 

The list compares agencies in effective leadership, employee skills/mission match, family 

friendly culture, pay and benefits, performance-based rewards and advancement, strategic 

management, support for diversity, teamwork, training/development, and work/life 

balance. 
OCC - 27 

4.1 – Summary of IT Resources Table 

Information Technology Investments (from Exhibit 53) *(Dollars in thousands) FY 2007 FY 2008

% Change from 

FY07 to FY08 FY 2009 

% Change from 

FY08 to FY09 FY 2010

% C

FY

Major IT Investments / Funding Source Budget Activity Obligated Obligated Estimated Estimated

WISDM *** OCC - Supervise 0 0 0.0% 1,300 0.0% 1,339 

Fiscal Management *** OCC - Manage 1,149 1,839 60.1% 2,098 14.1% 1,930 Subtotal, Major IT Investments ** $1,149 $1,839 60.1% $3,398 184.8% $3,269 

***/ Beginning in FY 2009, OCC will report 1 major investment to Treasury (FISCAL MANAGEMENT). WISDM will be reported as part of the consolidated Treasury Enterprise Content Management 300.
OCC - 28 

4B – Information Technology Strategy 

The OCC’s capital planning process ensures that all Information Technology (IT) 

investments are aligned with its mission, goals, and objectives, and target architecture 

before a project is selected for funding. The capital planning process ensures business 

cases are reviewed to leverage opportunities to use existing technology, to capitalize on 

enterprise opportunities as well as ensure there are no redundancy in IT systems that are 

considered for the portfolio. 

The Department’s overall strategy to effectively use technology to support the mission, 

goals, and objectives of the agency is enforced by the Investment Review Board (IRB), 

comprised of business unit and IT representatives from across the agency. The IRB 

makes recommendations to the OCC’s Technology and Systems Subcommittee (TSS). 

Both the IRB and TSS meet regularly to select, monitor, and control IT investments. 

This process ensures that the overall IT strategy has adequate funding, resources, and 

prioritization. 

Linkage to the OCC programs and strategic goals are documented in each 

project business case and prioritized by the IRB and TSS. Performance metrics are 

linked to the delivery, alignment, and achievement of the OCC strategic program 

objectives. Treasury’s CIO Council reviews the OCC’s IT investments quarterly. 

In FY 2008, OCC implemented the Workflow and Information Systems and Document 

Manager (WISDM). WISDM streamlines the Large Bank Supervision supervisory 

processes, improves collaboration, and enhances the security of sensitive documents 

while providing the OCC management greater visibility into the status of ongoing 

examinations. The system will provides LBS examiners and management the ability to 

collaboratively develop, securely store, search, and report on the status of their work 

documents. 

Homeland Security Presidential Directive 12 (HSPD-12) and Federal Information 

Security Management Act (FISMA) - In FY 2008, the OCC continued to develop an 

HSPD-12 program for Smartcard ID issuance and subsequent use of that card for both 

physical access to OCC facilities and logical access to OCC information systems. The 

OCC continued its close coordination with the Treasury HSPD-12 Program Management 

Office and General Services Administration (GSA) Managed Service Office to 

implement the Treasury Enterprise Solution for HSPD-12. This Treasury Department 

and GSA solution will satisfy goals pertaining to the E-Government initiatives for sharing 

government-wide services and those goals relating to ensuring the interoperability of the 

HSPD-12 credentials across the government. 

The OCC acquired and installed the necessary equipment for a card enrollment and 

activation station in the headquarters facility in FY 2008 and began issuing HSPD-12 
OCC - 29 

compliant credentials to employees. The OCC also established an HSPD-12 lab and 

began developing and testing solutions for using the new Smartcard IDs with the 

bureau’s nation-wide Physical Access Control System (PACS). In FY 2009, the OCC 

will continue to work with the Treasury Department and GSA to establish a complete 

program that meets the mandate of HSPD-12. 

In FY 2008, the OCC Information Security program expanded to enable increased focus 

on policy, compliance, training, technical oversight and audit. A revised FISMAcompliant IT Security Policy was published. In addition to aligning the OCC information 

security program with FISMA requirements, the new security policy establishes a 

framework for addressing other information security related issues. 

Technical capabilities and new engineering resources were leveraged this fiscal year for 

proactively detecting and responding to computer security incidents, including 

coordination with other OCC units, the Treasury Computer Incident Response Center and 

the Treasury Office of the Inspector General. The OCC information infrastructure 

components and major computer applications are regularly assessed for risk, including 

undergoing full, National Institute of Standards and Technology compliant continuous 

monitoring. A security training program is provided for all employees and contractors, 

including plans and programs of specialized security training for employees and 

contractors with particular security-related responsibilities. 
OCC - 30 

4.2 – Program Assessment Table 

Program Name: Bank Supervsion

OMB Major Findings/Recommendations

Bureau Actions Planned or Underway

2. Federal banking regulatory agencies, including the OCC, OTS, National Credit Union Administration (NCUA), 

FRB, and the FDIC, should work together to align outcome goals and related measures to allow for greater 

comparison of program performance in the industry. 

1. The FY 2003 assessment of the OCC's Bank Supervision program found that the program purpose is clear, 

goals are outcome-oriented, program measurements are clear, program is efficiently and effectively managed, but 

the program is not unique in that other agencies perform similar types of regulatory functions in the banking 

industry.

1. Regulatory agencies that include the OCC, OTS, NCUA, FDIC, FRB, Federal Housing Finance 

Agency (FHFA), and Security and Exchange Commission continue to share their strategic plans, 

performance budgets, and performance measures on a regular basis. This allows each agency to consider 

the approaches used by the other agencies when developing or revising their goals and measures. The 

OCC and OTS, as bureaus in the Department of the Treasury, continue to work together to maintain 

alignment of their performance measures. 

For a complete list of program results visit the following website: 

http://www.whitehouse.gov/omb/expectmore/all.html