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 2007 FY 2008 FY 2009

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

Supervise $528,622 $625,582 $675,780 $50,198 8.02%

Regulate 91,296 98,669 108,414 9,745 9.88%

Charter 18,515 24,849 26,678 1,829 7.36%

Total Resources $638,433 $749,100 $810,872 $61,772 8.25%

FY 2008 Priorities 

• Regulate and supervise approximately 1,740 national bank charters and 48 federal 

branches of foreign banks with total assets of approximately $7.7 trillion; 

• 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; 

• Address potential adverse changes in national bank asset quality and risk profiles;

• 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, and the Uniting and Strengthening America by Providing Appropriate 

Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT) Act laws and 

regulations;

• Address sound underwriting, risk management systems, and consumer issues 

presented in connection with retail banking products offered by national banks; 

• Continue to support and defend the attributes and benefits of the national bank 

charter; and

• 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. 

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Table of Contents 

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

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

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

1C – Industry Outlook .................................................................................................. 12 

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

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

2.3 – Resource Detail Table.......................................................................................... 15 

2B – Appropriations Language and Explanation of Changes....................................... 15 

2C – Legislative Proposals ........................................................................................... 15 

Section 3 – Budget and Performance Plan ................................................................... 16

3.1 – Budget by Strategic Outcome .............................................................................. 16 

3A – Supervise............................................................................................................. 16 

3.2.1 – Supervise Budget and Performance Plan.......................................................... 16 

3B – Regulate............................................................................................................... 18 

3.2.2 – Regulate Budget and Performance Plan ........................................................... 18 

3C – Charter................................................................................................................. 19 

3.2.3 – Charter Budget and Performance Plan.............................................................. 19 

Section 4 – Supporting Materials.................................................................................. 20

4A – Human Capital Strategy Description ................................................................... 20 

4.1 – Summary of IT Resources Table ......................................................................... 22 

4B – Information Technology Strategy ........................................................................ 23 

4.2 – PART Evaluation Table....................................................................................... 24 

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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, to oversee a nationwide system of banking institutions, and to ensure that 

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 1,740 national bank charters and 48 federal branches 

of foreign banks in the United States (U.S.). Total assets under the OCC supervision are 

approximately $7.7 trillion or 68 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: Supervise, Regulate, and Charter, to achieve the goals 

and objectives outlined in its strategic plan. 

The OCC’s priorities for the 2008 fiscal year (FY) include supervisory issues related to 

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

on proposed revisions to the federal banking agencies’ risk-based capital standards, 

compliance with Bank Secrecy Act/anti-money laundering (BSA/AML) and USA 

PATRIOT Act requirements, and addressing issues raised by the range of retail banking 

products offered by national banks. 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/four-year point of their careers, and 

developing 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 

U.S. 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 licensing and other fees comprises the remaining four percent of the OCC’s 

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funding. The OCC does not receive congressional appropriations to fund any portion of 

its operations. 

Continued uncertainty about the future direction of interest rate changes, coupled with net 

interest margin compression, will pose challenges to bank management and put pressure 

on bank earnings. Credit quality will continue to be monitored closely for deterioration, 

with the leveraged lending and subprime markets being the most vulnerable. Domestic 

and foreign nonbank players and investors increasingly affect the way that banks 

structure and price products and manage their risk profiles. The role and transparency of 

hedge funds in financial markets will continue to receive heightened scrutiny by 

investors, regulators, and Congress. Fair lending, information security, and other 

consumer protection issues will remain in the forefront for the banking industry and the 

OCC. BSA and AML supervision will continue to be an important component of the 

federal law enforcement and national security programs. Basel II implementation will 

require significant bank and examiner resources at mandatory Basel II banks and large 

banks owned by foreign-owned banking organizations. Operational risk issues, including 

technology security and management, payment systems and backroom operations, and 

outsourcing and vendor management, will continue to be prominent. 

The following are highlights of the OCC’s FY 2007 accomplishments and specific FY

2008 challenges. 

Supervisory Activities

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). 

Areas of emphasis during the OCC’s FY 2007 supervisory strategies included: credit 

quality and the adequacy of credit risk management systems; allowance for loan and 

lease loss methodology and adequacy; compliance with guidance on nontraditional 

mortgage products and commercial real estate concentrations; risk management practices; 

audit and internal controls; BSA/AML compliance; Basel II implementation at mandatory 

and opt-in banks; capital adequacy; risk measurement and management for new and 

innovative trading activities; risk management systems related to hedge fund exposures; 

compliance management systems; Home Mortgage Disclosure Act (HMDA) data and fair 

lending reviews; and business continuity planning. 

Monitoring Credit Quality 

Monitoring and evaluating the quality of the loans and investments made by national 

banks is 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 look to 

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ensure that 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 2007 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 examiners believe that the inherent credit risk in banks’ portfolios are 

increasing or decreasing. 

• 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) that reviews large syndicated loans held by 

multiple banks. The 2007 review covered 7,700 facilities (or 5,400 borrowers) with 

commitments totaling $2.3 trillion. SNC commitments increased by nearly $400 

billion, or 21 percent, since the 2006 SNC review. Overall credit quality of the SNC 

portfolio remains satisfactory with criticized commitments as a percentage of total 

SNC commitments in-line with prior year results. Easing of underwriting standards 

continued to be evident, especially in the syndicated leveraged loan market. 

However, the largest national banks that originate and agent SNCs mitigate direct 

credit risk by selling down their SNC exposures to hold levels that are appropriate for 

the bank’s earnings/capital position. The OCC and other agencies also continued 

work on a modernization effort to standardize and expand the data collection process 

to improve the effectiveness of SNC reviews. This project will also continue in FY 

2008. 

• Horizontal Examinations - Large Bank Supervision (LBS) conducted or is in the 

process of completing three horizontal reviews to determine large bank compliance 

with interagency guidance. The scope of these reviews focused on nontraditional 

mortgage guidance, credit risk management guidance for home equity lending, and 

credit card account management guidance. 

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 investigates national banks that fail to meet BSA/AML 

requirements and brings enforcement actions against them. Other supervisory activities 

during FY 2007 included updates to the Federal Financial Institutions Examination 

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Council's (FFIEC) BSA/AML Examination Manual and issuance of the OCC’s 2007 

Money Laundering Risk (MLR) System results. The MLR provides over 1600 

community bank charters with succinct BSA/AML risk assessment information. This 

information also enhances the OCC’s effectiveness in BSA/AML supervision. Also, an 

Interagency Statement on Enforcement of BSA/AML Requirements was issued by the 

OCC, FRB, FDIC, OTS, and the National Credit Union Administration (NCUA) which 

promotes consistency among the agencies, as well as transparency in the way that 

enforcement decisions are made. 

Concentrations in Commercial Real Estate Lending

Commercial real estate is an area in which some banks are becoming increasingly 

concentrated. In FY 2007, the OCC, FRB, and FDIC issued guidance on sound risk 

management practices for concentrations in commercial real estate lending to help ensure 

that institutions pursuing a significant commercial real estate lending strategy remain 

healthy and profitable while continuing to serve the credit needs of their communities. 

Allowance for Loan and Lease Losses

The allowance for loan and lease losses (ALLL) represents one of the most significant 

estimates in an institution’s financial statements and regulatory reports. Management’s 

assessment of the appropriateness of the ALLL is critical to the safety and soundness of a 

financial institution, especially in today’s uncertain economic environment and when 

concentrations in untested loan products are present. In December 2006, the OCC, FRB, 

FDIC, OTS, and NCUA (the agencies) issued updated guidance that describes the 

responsibilities of the boards of directors, management, and examiners of banks and 

savings associations regarding the ALLL; factors to be considered in the estimation of the 

ALLL; and the objectives and elements of an effective loan review system, including a 

sound credit grading system. The agencies also issued a series of frequently asked 

questions to assist institutions in applying the guidance. During FY 2007, the OCC 

completed ALLL training related to this new policy statement. 

Subprime and Nontraditional Mortgages 

Weaknesses in the U.S. housing and mortgage markets, resulting in increased residential 

mortgage delinquencies and foreclosures, have been a major concern for bankers, 

consumers, regulators, and public policy officials throughout the past year. In recent 

weeks these concerns have adversely affected U.S. and global financial markets. These 

effects have included a sharp contraction in the liquidity in certain secondary markets, 

such as those for jumbo, non-conforming mortgage loans, asset-backed commercial paper 

programs, and various collateralized debt obligations. Investors' heightened concerns 

about overall credit quality have also affected the commercial leveraged and 

collateralized loan markets. Through the OCC’s on-site examiners at the OCC’s largest 

institutions and various regulatory coordinating mechanisms, the agency is monitoring 

closely these market conditions. The OCC will work with Treasury and the other 

regulatory agencies to pursue any policies or actions as needed. In addition, the OCC 

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will continue to encourage banks to work with homeowners who are unable to make 

mortgage payments. 

Supervisory Guidance

During the past year, the OCC has worked with the other federal banking regulators to 

issue supervisory guidance on nontraditional mortgage products and subprime mortgage 

lending. Both issuances articulate the prudent safety and soundness and consumer 

protection standards that institutions should follow to ensure that borrowers obtain loans 

they can afford to repay. Given the prominent role that nonfederally regulated 

institutions play in these markets, the agencies worked closely with the Conference of 

State Bank Supervisors and the American Association of Residential Mortgage 

Regulators to encourage individual states to adopt and effectively enforce these 

guidelines for mortgage brokers under their supervision. The agencies also issued a 

statement encouraging financial institutions to work constructively with residential 

borrowers who are financially unable to make their contractual payment obligations on 

their home loans. 

Illustrated Consumer Disclosures for Nontraditional and Subprime Mortgage Products 

To make informed choices when seeking a mortgage loan, consumers must understand 

and be able to compare the material features and potential risks, including the likelihood 

of increased payments or substantial prepayment penalties, of products before entering a 

loan. The agencies’ supervisory guidance sets forth recommended practices to ensure 

that consumers have clear and balanced information about these products. The agencies 

issued illustrations of consumer information to help institutions implement these 

practices. They also published a booklet for consumers, Interest-Only Mortgage 

Payments and Payment-Option ARMs — Are They for You? that provides a glossary of 

lending terms, a mortgage shopping worksheet, and a list of additional information 

sources. This information can help consumers, whether buying a house or refinancing a 

mortgage, decide whether an interest-only mortgage (an I-O mortgage) or an adjustablerate mortgage (ARM) with the option to make a minimum payment (a payment-option 

ARM) is right for them.

Assessing Complex Financial Activities

 

Advances in risk modeling and the concurrent globalization of financial markets have led 

to an ever expanding array of complex financial products that are used and offered by 

large national banks. The OCC resident examination staffs at the largest national banks 

closely monitor these developments to ensure that banks have adequate risk management 

policies and controls in place to govern these activities. Supervisory activities in this area 

during FY 2007 included: 

• Improving Backroom Processing of Derivatives Contracts - The OCC has worked 

with other U.S. and international regulators and major dealers to improve the 

infrastructure that supports the global derivatives market. These efforts, which 

include reducing the level of backlog confirmations and moving towards more 

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electronic processing platforms, will help ensure the smooth operations of the 

derivatives markets as the volume of activities in these markets continue to grow. 

• Interagency Statement on Complex Structured Finance Transactions - In January 

2007, the OCC, FRB, FDIC, OTS, and Securities Exchange Commission (SEC) 

issued a final statement on the complex structured finance activities of financial 

institutions. The statement describes the types of internal controls and risk 

management procedures that should help financial institutions identify, manage, and 

address the heightened legal and reputational risks that may arise from certain 

complex structured finance transactions. 

Implementation of a Revised Capital Framework - Basel II

Bank capital serves as a buffer against unexpected losses. The OCC continued work with 

the FRB, FDIC, and OTS to modernize the agencies’ regulatory capital requirements. 

Beginning with the issuance of the New Basel Accord in June 2004, the OCC has worked 

with the other U.S. banking regulators to implement the revised framework for risk-based 

capital standards. In September 2006, the OCC, together with the FRB, the FDIC, and 

the OTS issued a proposed regulation, generally referred to as the Basel II proposal, 

implementing that framework for certain U.S. banks. At the same time, the agencies 

published revisions to their current market risk capital rule. Subsequently (in December 

2006), the agencies issued a third proposed regulation that would revise the current riskbased capital framework. This third proposal was commonly referred to as Basel IA. 

When the Basel II proposal was issued, the agencies contemplated that the largest, 

internationally active U.S. banks (so-called “core banks”) would be required to use the 

Basel II rule. Certain other banks (so-called “opt-in banks”) could use the Basel II rule 

with the permission of their primary federal supervisor, and banks that were neither core 

banks nor opt-in banks would be subject to the Basel IA rule. On July 20, 2007, the 

Comptroller of the Currency and the principals of the other three federal banking 

agencies announced their agreement on an approach to finalizing the Basel II rule and on 

a plan to issue a new proposal that would make the so-called standardized approach, 

contained in the new Basel Accord, available to non-core banks. This would replace the 

earlier proposed rule to adopt the “Basel 1A” option. The final Basel II rule was 

published in the Federal Register on December 7, 2007 (72 FR 69288), and the text of the 

new standardized proposal is expected to be released during 2008. 

Protecting the National Bank System and Its Customers against Natural Disasters, 

Criminal Activity, and Terrorist Threats

The events of September 11, 2001, and more recently, Hurricanes Katrina and Rita 

underscore the vital role that the national banking system plays in the U.S. economy and 

the lives of its citizens. Through the OCC supervisory programs and partnerships with 

other government agencies, the OCC works to ensure the resiliency of the nation’s 

banking system in the face of regional or national emergencies and to prevent the 

inappropriate use of the financial system by criminals and terrorists. 

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Sound business continuity plans allow banks to recover, resume, and maintain their 

critical operations in the event of an unexpected disruption. To assist banks in 

developing and evaluating their business continuity plans, the OCC, in conjunction with 

the FFIEC, is revising the FFIEC’s Business Continuity Planning Booklet for release in 

FY 2008. The revised booklet will incorporate lessons learned from the Gulf Coast 

hurricanes. It will also highlight issues and challenges that financial institutions could 

face during a pandemic, and the mitigating controls that should be implemented to 

address pandemics. 

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 Community Reinvestment Act (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. 

 

The OCC’s fair lending supervisory and enforcement 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 that enforcement action is taken when 

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

Department of Housing and Urban Development (HUD). 

The OCC also conducts 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 

moderate-income consumers, distressed communities, and small and minority-owned 

businesses. To better reach consumers directly, the OCC launched a new website in July 

2007, helpwithmybank.gov, which is designed to help consumers when they have 

questions or need help in resolving problems with their banks. 

During FY 2007, the OCC and other federal banking agencies issued proposed 

interagency questions and answers that address topics related to their CRA regulations, 

updated lists of distressed or underserved non-metropolitan middle-income geographies 

in which bank revitalization or stabilization activities will receive CRA consideration,

and updated median family income levels that are used in CRA performance evaluations. 

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

successful community development activities. During FY 2007, the OCC issued a 

bulletin to national banks implementing changes in the authority for national banks to 

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make public welfare investments under 12 USC 24. On October 13, 2006, the Financial 

Services Regulatory Relief Act of 2006 was enacted, which among other provisions 

increased the maximum aggregate public welfare investment limit for a national bank 

from 10 to 15 percent of the bank’s unimpaired capital and surplus. 

The OCC held a tele-seminar that focused on the Small Business Administration 504 

Certified Development Companies Loan program, which brought together 504 

practitioners and an examiner to provide interested listeners with additional information 

on how the program operates. The OCC also publishes periodic Community 

Development Insights papers on products, services, and initiatives that are relevant to 

community development and consumer banking activities. During FY 2007, the OCC 

produced such papers on foreclosure prevention, new markets tax credits, reaching ethnic 

markets, workforce housing, and federal low-income housing tax credits. The OCC also 

published Community Developments newsletters covering topics on community 

development venture capital and minority-owned financial institutions. 

 

During FY 2007, the OCC continued its work with the other federal banking agencies to 

improve financial disclosures to consumers. In May 2007, the agencies issued final 

illustrations of consumer information for nontraditional mortgage products. The 

illustrations are intended to help implement the consumer protection portion of the 

“Interagency Guidance on Nontraditional Mortgage Products Risks.” English and 

Spanish versions of the illustrations are available on the OCC’s website. Also, in March 

2007, the OCC and seven other federal regulators released a notice of proposed 

rulemaking requesting comment on a proposed model privacy notice. The proposed 

model privacy notice is intended to provide consumers with a succinct and 

comprehensive privacy notice. 

The OCC issued several bulletins and advisories that were geared toward helping 

consumers. Consumer Advisory 2007-3 provides advice to help consumers avoid 

becoming victims of fraud involving cashier’s checks, money orders, and official bank 

checks. In March 2007, the OCC issued a consumer alert regarding certain deceptive 

loan solicitations sent to consumers that implied cash grants or disbursements were 

available from so-called CRA programs. 

The OCC also issued a reminder to banks about working with customers in disaster areas 

related to hurricane Katrina. The OCC Bulletin 2007-8 provided guidance on making 

decisions regarding payment deferrals, loan modifications, extensions, restructurings or 

other workout programs. 

In addition, the OCC issued Bulletin 2007-14, which discusses the interagency policy on 

working with mortgage borrowers who have ARMs scheduled to reset in the next 12 to 

18 months, particularly subprime hybrid ARMs. The OCC, along with the other federal 

banking agencies, encourages institutions to work with borrowers who may be unable to 

meet contractual payment obligations on loans secured by their primary residence. The 

OCC paid special attention to foreclosure prevention issues affecting banks and 

consumers, in particular by highlighting best practices of bankers and their nonprofit 

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partners in a research paper and by holding interagency roundtables across the country. 

The OCC also unveiled public service announcements aimed at encouraging delinquent 

mortgage borrowers to get help by contacting their lenders or a trusted counselor in order 

to avoid foreclosure. In addition, the OCC highlighted efforts to assist minority-owned 

banks, including sponsoring an interagency conference and a newsletter dedicated to 

issues involving those institutions. 

Customer Assistance

The OCC’s Customer Assistance Group (CAG) assists consumers who have questions or 

complaints about national banks and their operating subsidiaries. The CAG received 

67,000 contacts from consumers in the form of telephone calls, letters, faxes, and e-mails 

in FY 2007. 

In FY 2007, CAG received favorable results from a customer satisfaction survey that was 

conducted at the beginning of the fiscal year. In FY 2008, follow-up surveys will be

conducted to identify trends and patterns in the responses. Also, during FY 2007, the 

OCC expanded the CAG call center hours to Monday through Friday, from 7 a.m. to 

7 p.m. (CST) to enhance customer accessibility. 

During FY 2007, outreach activities to state bank regulators resulted in Memorandums of 

Understanding (MOU) being signed between the OCC and 25 state banking departments 

and the Commonwealth of Puerto Rico with several other MOU agreements 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 2008 include a continuation of outreach activities to state regulators 

and others. 

 

Regulation

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 2007, the OCC participated in the 

interagency review of regulations required by the Economic Growth and Regulatory 

Paperwork Reduction Act of 1996 (EGRPRA), continued progress on the implementation 

of the Fair and Accurate Credit Transactions Act of 2003 (FACT Act), and issued 

supervisory guidance in areas of lending activity that present new or heightened risks to 

national banks. 

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

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

objective entails, among other things, refinement and clarification of the key attributes 

that define the national bank charter, including the preemptive attributes of the charter. 

In FY 2006, the U.S. Supreme Court granted certiorari in Watters v. Wachovia Bank,

N.A., a national bank preemption case in which the OCC, represented through the 

Solicitor General of the United States, participated as amicus curiae. The Supreme 

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Court’s decision in the Watters case, issued in FY 2007, reaffirmed the key principle 

from its Barnett Bank of Marion County, N.A. v. Nelson decision of over a decade ago 

that state law may not significantly burden, curtail, or hinder a national bank’s exercise of 

its express or implied powers, whether those powers are exercised directly by the bank or 

through other means. Watters confirms that preemption depends on the effects that state 

law has on the exercise of national bank powers regardless of the corporate structure a 

bank uses. 

In FY 2007, the OCC made permanent a pilot program aimed at helping community 

banks with national charters continue to meet the credit needs of their customers. 

National banks are generally allowed to lend no more than 15 percent of capital on an

unsecured basis, plus an additional 10 percent secured by readily marketable collateral, to 

a single borrower. Many states have established higher limits for the banks they charter. 

Under the program, a qualified, well-managed national bank may use a higher lending 

limit for 1-4 family residential real estate loans, small business loans, and small farm

loans, if the state where the bank is located allows its state-chartered banks to use a 

higher lending limit for these types of loans. 

In FY 2008, the OCC will 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. 

Completion of Regulation Review 

In FY 2006, the OCC, together with the other federal banking agencies and the NCUA, 

completed the review of regulations required by the EGRPRA. EGRPRA requires the 

federal agencies that are members of the FFIEC to review their rules every 10 years to 

identify those that are outdated or unnecessary and to revise or eliminate such rules if 

appropriate.1

 Upon completion of the review, EGRPRA further requires the agencies to 

submit a report to Congress. The agencies submitted that report in November 2007. 

The OCC identified a number of changes to its rules that should streamline existing 

requirements or procedures and enhance national banks’ flexibility in conducting 

authorized activities. The OCC’s proposed amendments to its rules effecting these 

changes were published for comment in July 2007. Work on a rule to finalize the 

changes the OCC proposed will continue into FY 2008. 

Implementation of the FACT Act 

The FACT Act2

 amended the Fair Credit Reporting Act in a number of areas that require 

the issuance of implementing regulations. In FY 2006, the OCC, together with the FRB, 

the FDIC, the OTS, and the NCUA completed a rulemaking implementing the FACT 

Act’s limitations on obtaining and sharing medical information. In addition, these 

agencies and the Federal Trade Commission issued a final rule in October 2007, 

 

1 12 U.S.C. § 3311 2

 Pub. L. No. 108-159, 117 Stat. 1952 (Dec. 4, 2003)

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pertaining to patterns, practices, and specific forms of activity (referred to as “red flags”) 

that indicate the possible existence of identity theft. 

OMB Circular A-123, Management’s Responsibility for Internal Control, Appendix A

In compliance with OMB Circular A-123, Appendix A, in FY 2007 the OCC continued 

to refine its A-123 program. A risk assessment of all business processes related to 

financial reporting was expanded to include additional assessment of other programs that 

have an impact on the OCC’s financial statements or which pose other risks to the OCC, 

such as reputation risk. Based on this assessment, the OCC carried out 40 comprehensive 

test plans, including coverage of the information systems that support financial reporting. 

The testing revealed no material internal control weaknesses. During FY 2008, the 

OCC’s risk assessment process will be enhanced to incorporate the Enterprise Risk 

Management Framework recommended by the Committee of Sponsoring Organizations 

of the Treadway Commission, as well as the OCC strategic risk assessment. The OCC 

will also update documentation over financial processes as needed and carry out test 

plans to support the FY 2008 assessment over financial reporting. 

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

Security Management Act (FISMA)

In FY 2007, the OCC successfully established a HSPD-12 program that involves both a 

physical and logical security implementation strategy. This program involves close 

coordination with the Treasury HSPD-12 Program Management Office (PMO) and 

General Services Administration (GSA) Managed Service Office (MSO). The program 

plan calls for a three-phase implementation strategy. The three phases of the OCC 

HSPD-12 program are: 1) Phase I - Project planning, requirements analysis, and 

acquisition of integration services, 2) Phase II – HSPD-12 system

enterprise/infrastructure integration and deployment, and 3) Phase III – HSPD-12 

systems maintenance and the OCC application integration. 

 

In FY 2007, the OCC completed the Phase I project planning elements of the program. It 

established system integration plans with both Treasury and GSA. The OCC is working 

with Treasury to leverage the shared services solution provided by the GSA MSO. This 

Treasury and GSA solution will also satisfy the additional goals pertaining to the EGovernment initiatives for sharing government-wide services and will also provide a

complete solution to support the OCC’s ID badge program requirements. In FY 2008, 

the OCC will work with Treasury and GSA on the Phase II systems 

enterprise/infrastructure integration and deployment of the systems necessary to create 

and use smartcard IDs, which control both physical access to the OCC facilities and 

logical access to the OCC information systems. 

The OCC also has made improvements in computer security via policy and technical 

changes. New rules instituted in FY 2007 on the use of the OCC computer equipment 

and networks include a policy that all data on computers and removable media be 

encrypted, procedures for assessing the impact and any needed agency response to data 

OCC – 11 
breaches, and procedures for sensitive data on the OCC computers. Technical changes 

include full disk encryption on the OCC computers, encrypting all BlackBerry devices, 

enhancing network and computer security software, and instituting two-factor 

authentication for remote access to the OCC network. On the compliance side, the OCC 

continues to refine its approach to documentation, training, and certification and 

accreditation activities required by the FISMA as well as evolving Treasury and 

government-wide standards. Employees and contractors in the OCC’s Chief Information 

Officer's office with special security responsibility took additional training to underscore 

and reinforce their security duties. 

To further strengthen computer and physical security, during FY 2007, the OCC 

contracted with a third-party vendor to conduct an end-to-end assessment. This project 

resulted in recommendations for improvements to physical and technological 

infrastructure and security policies and procedures. Actions to address the 

recommendations are currently underway. 

1C – Industry Outlook 

Bank earnings have been strong for the last 15 years, and strong earnings have in turn 

contributed to healthy capital ratios. Banks have successfully expanded their product 

range, and this expansion has been an important factor in maintaining robust earnings 

growth. Along with the greater range of products has come the growing importance and 

complexity of off-balance sheet income and noninterest income. These have been 

especially important at the largest banks, and are now becoming important for some

smaller institutions as well. The OCC expects these trends to continue. There is more 

uncertainty about banks’ ability to continue to rely on the real estate sector to drive asset 

and earnings growth. 

Over the next five years, bank assets are likely to grow at 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. 

Assets ($t) Number Assets ($t) Number

2006 10.1 7,402 6.8 1,715 77.3%

2011e 12.9 6,781 8.7 1,571 80.0%

Commercial Banks National Banks Share of total system assets

in banks over $10 billion

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

bank consolidation is likely to continue, and that over the next five years, the number of 

national banks will likely decline at the same rate experienced by the total commercial 

bank population. In 2006, 88 banks had assets exceeding $10 billion, while about 3,200 

banks had assets under $100 million. By 2011, 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 continue to decline. 

OCC – 12 
Large banks will continue to dominate the industry. Banks with over $10 billion in assets 

now account for 77 percent of 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 59 percent of 

all commercial bank assets. Since then, a series of mergers has increased the national 

bank share to about 68 percent of commercial bank assets. 

Risks to the banking system include an economic slowdown, and deterioration in real 

estate markets, have accounted for much of the growth in bank income and assets over 

the last several years. 

OCC – 13 
Section 2 – Budget Adjustments and Appropriation Language 

2.2 – Operating Levels Table 

Dollars in Thousands

Bureau: Office of the Comptroller of the Currency

FY 2007 

Obligated

FY 2008 

Estimated

FY 2009 

Estimated

FTE 2,954 3,078 3,139

Object Classification:

 11.1 - Full-time permanent 308,736 347,157 369,946

 11.3 - Other than full-time permanent 7,583 7,194 7,666

 11.5 - Other personnel compensation 1,726 2,003 2,135

 11.8 - Special personal services payments 148 0 0

 12 - Personnel benefits 105,590 116,584 132,787

 13 - Benefits for former personnel 453 190 206

 21 - Travel and transportation of persons 39,073 45,360 50,351

 22 - Transportation of things 2,023 2,837 3,190

 23.1 - Rental payments to GSA 921 2,690 2,716

 23.2 - Rental payments to others 27,380 29,432 31,371

 23.3 - Comm, utilities, and misc charges 9,744 14,242 15,367

 24 - Printing and reproduction 1,158 1,182 1,234

 25 - Other contractual Services 0 0 0

 25.1 - Advisory and assistance services 33,460 37,247 38,524

 25.2 - Other services 15,472 19,223 20,665

 25.3 - Other purchases of goods and services from Govt. accounts 4,786 6,588 7,082

 25.4 - Operation and maintenance of facilities 2,834 3,678 3,954

 25.5 - Research and development contracts 0 0 0

 25.6 - Medical care 0 0 0

 25.7 - Operation and maintenance of equip 43,629 56,206 56,598

 25.8 - Subsistence and support of persons 0 0 0

 26 - Supplies and materials 5,269 7,152 8,022

 31 - Equipment 20,056 20,481 26,443

 32 - Land and structures 8,368 29,604 32,565

 33 - Investments and loans 0 0 0

 41 - Grants, subsidies, and contributions 0 0 0

 42 - Insurance claims and indemnities 24 50 50

 43 - Interest and dividends 0 0 0

 44 - Refunds 0 0 0

Total Budget Authority $638,433 $749,100 $810,872

Budget Activities:

 Supervise 528,622 625,582 675,780

 Regulate 91,296 98,669 108,414

 Charter 18,515 24,849 26,678

Total Budget Authority $638,433 $749,100 $810,872

OCC – 14 
2.3 – Resource Detail Table 

FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT

Budgetary Resources:

Revenue / Offsetting Collections

Assessments $677,890 $725,400 $779,900 7.51%

Interest 27,622 29,100 31,100 6.87%

Other Income 2,810 3,100 3,200 3.23%

Total Revenue / Offsetting Collections $708,322 $757,600 $814,200 7.47%

Unobligated balances, Start of year 597,772 667,661 676,161 1.27%

 Recoveries of prior year obligations 0 0 0

 Net transfers (includes capital transfers) 0 0 0

Total budgetary resources available $1,306,094 $1,425,261 $1,490,361 4.57%

Expenses/Obligations

Supervision 2,482 528,622 2,557 625,582 2,609 675,780 2.03% 8.02%

Regulate 390 91,296 428 98,669 436 108,414 1.87% 9.88%

Charter 82 18,515 93 24,849 94 26,678 1.08% 7.36%

Total Expenses / Obligations 2,954 $638,433 3,078 $749,100 3,139 $810,872 1.98% 8.25%

Net Results $667,661 $676,161 $679,489 0.49%

Estimated to FY 2009

FY 2007 FY 2008 FY 2009 FY 2008

Obligated

% Change

Estimated

0.00%

0.00%

2B – Appropriations Language and Explanation of Changes 

OCC receives no appropriations from Congress. 

2C – Legislative Proposals 

OCC currently has no legislative proposals. 

OCC – 15 
Section 3 – Budget and Performance Plan

This table lists all FY 2009 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 2008 FY 2009 Percent

Estimated Estimated Change

AMOUNT AMOUNT AMOUNT 

 Economic competitiveness 123,518 135,092 9.4%

 Fin. & econ.crises 625,582 675,780 8.0%

Total $749,100 $810,872 8.2%

3A – Supervise ($625,582,000 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 2005 FY 2006 FY 2007 FY 2008 FY 2009

Resource Level Obligated Obligated Obligated Estimated Estimated

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

 Reimbursable Resources $408,091 $471,882 $528,622 $625,582 $675,780

Total Resources $408,091 $471,882 $528,622 $625,582 $675,780

Budget Activity Total $408,091 $471,882 $528,622 $625,582 $675,780

OCC – 16 
Supervise Budget Activity

 Measure FY 2005 FY 2006 FY 2007 FY 2008 FY 2009

Actual Actual Actual Target Target

Percentage of national banks that are 

categorized as well capitalized (%) (Oe) 

 99% 99% 99% 95% 95%

Percentage of national banks with composite 

CAMELS rating 1 or 2 (%) (Oe) 

 94% 95% 96% 90% 95%

Rehabilitated national banks as a percentage 

of the problem national banks one year ago 

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

44% 46% 52% 40% 40%

Percentage of national banks with consumer 

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

94% 94% 97% 94% 94%

Total OCC costs relative to every $100,000 in

bank assets regulated ($) (E) 

 N/A $8.57 $8.89 $9.55 $9.55

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

Description of Performance: 

Well Capitalized National Banks 

The Federal Deposit Insurance Act established a system of prompt corrective action 

(PCA) 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, 2007, 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, 2007, 96 percent of national banks earned a 

composite CAMELS rating of either 1 or 2, signifying an overall safe and sound national 

banking system and a foundation for a strong U.S. economy. 

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, 52 percent of banks with 

composite CAMELS rating of 3, 4, or 5 one year ago have improved their ratings to 

either 1 or 2 this year. This is an improvement from 46 percent achieved in FY 2006 and 

44 percent achieved in FY 2005. 

 

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 

OCC – 17 
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, 2007.

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

Beginning in FY 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 bank assets 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 banking system benefits all 

national bank customers. 

3B – Regulate ($98,669,000 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 2005 FY 2006 FY 2007 FY 2008 FY 2009

Resource Level Obligated Obligated Obligated Estimated Estimated

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

 Reimbursable Resources $64,011 $70,992 $91,296 $98,669 $108,414

Total Resources $64,011 $70,992 $91,296 $98,669 $108,414

Budget Activity Total $64,011 $70,992 $91,296 $98,669 $108,414

Regulate Budget Activity

 Measure FY 2005 FY 2006 FY 2007 FY 2008 FY 2009

Actual Actual Actual Target Target

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

OCC – 18 
3C – Charter ($24,849,000 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. 

3.2.3 – Charter Budget and Performance Plan

Charter Budget Activity

FY 2005 FY 2006 FY 2007 FY 2008 FY 2009

Resource Level Obligated Obligated Obligated Estimated Estimated

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

 Reimbursable Resources $15,011 $13,952 $18,515 $24,849 $26,678

Total Resources $15,011 $13,952 $18,515 $24,849 $26,678

Budget Activity Total $15,011 $13,952 $18,515 $24,849 $26,678

Charter Budget Activity

 Measure FY 2005 FY 2006 FY 2007 FY 2008 FY 2009

Actual Actual Actual Target Target

Percentage of licensing applications and 

notices completed within established 

timeframes. (%) (Oe) 

 96% 94% 96% 95% 95%

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 96 

percent of applications and notices within the time standard through September 30, 2007. 

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/2007-par.shtml

OCC – 19 
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 high priority recruitment needs 

and approves incentives specifically designed to address those priorities. 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 600 examiners have been hired, including more than 150 in 

FY 2007. The agency has focused heavily on recruiting the expertise needed to fill 

positions in our Chief National Bank Examiner’s (CNBE) office and Large Banks 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 (e.g., 

what types of bank assignments) and to ensure that the OCC has the staffing resources 

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 line 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 the population of national banks. Assessment 

results will aid examination staffing, 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. 

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 upon identified 

competencies. The program, which will be piloted for 18 months, began in FY 2007. 

This pilot program offers participants three six-month assignments, with significant 

managerial and supervisory roles, that will develop leadership skills rather than prepare 

OCC – 20 
OCC – 21 

them for a specific position. 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. 

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 

accomplish this goal, the OCC regularly reviews and adjusts compensation and benefits 

and performance management programs to ensure that they continue to support the OCC 

objectives. The OCC operates under a merit-based performance system. Annual acrossthe-board increases are not granted. Salary increases are awarded based on merit to 

reward employee performance, employee development that is relevant to the OCC needs, 

and employee contributions to the OCC’s priorities. The OCC continually evaluates its 

programs to ensure that there is an appropriate correlation between pay and performance.

The OCC is confident that 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 the 

OCC’s mission. 

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

The OCC ranked fourth out of more than 200 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 – 22 

4.1 – Summary of IT Resources Table Dollars in Thousands

Information Technology Investments (from Exhibit 53) *(Dollars in thousands) FY 2006 FY 2007 FY 2008 Major IT Investments / Funding Source Budget Activity Obligated Obligated Estimated 

Chief Counsel OCC - Charter, Supervise, Regulate 3,765 2,770 -26.4% 523 Enterprise Services OCC - Charter, Supervise, Regulate, Manage 1,262 1,323 4.8% 806 Examinations OCC - Supervise 3,946 2,535 -35.8% 3,236 WISDM *** OCC - Supervise 0 0 0.0% 0 Fiscal Management *** OCC - Manage 754 312 -58.6% 2,490 

Subtotal, Major IT Investments ** $9,727 $6,940 -28.7% $7,055 Chief Counsel OCC - Charter, Supervise, Regulate 240 0 -100.0% 0 Canary Early Warning System OCC - Supervise 301 460 52.8% 250 Examiner View OCC - Supervise 0 0 0.0% 665 Ombudsman OCC - Supervise 154 150 -2.6% 745 Shared National Credit OCC - Supervise 731 0 -100.0% 3,567 SIS LB - Institutional Data OCC - Supervise 523 0 -100.0% 847 SIS - Peer Analytical Data OCC - Supervise 0 0 0.0% 636 Suspicious Activity Reports OCC - Supervise 181 204 12.7% 0 CARS & FINDRS OCC - Supervise 0 272 0.0% 0 STARS OCC - Supervise 0 0 0.0% 5,755 HR/Operational Datamarts & Mainframe Retirement OCC - Manage 966 321 -66.8% 0 Web & Electronic Publishing System OCC - Supervise 488 0 -100.0% 4,449 

Non-Major IT Investments ** $3,584 $1,407 -60.7% $16,914 OCC - Data Center Systems & Services (Consolidated Infrastructure) 6,099 8,261 35.4% 8,486 

OCC - Security Program 1,396 2,077 48.8% 2,959 OCC - Telecommunications Systems & Services 11,258 12,453 10.6% 11,476 OCC - Enterprise Identity Management 0 1,323 0.0% 1,050 Infrastructure Investments $18,753 $24,114 28.6% $23,971 Enterprise Architecture $0.00 $0.00 0.0% $0.00 Total IT Investments $32,064 $32,461 1.2% $47,940 

Notes:

 */ All OCC budget authority derives from an indefinite availability trust fund, i.e., "no-year". **/ OCC uses an IT Portfolio setaside where major and non-major projects can be selected throughout the year which may cause realignments between categories or line-items for FY 2009.***/ 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.

% Change from 

FY06 to FY07

% Ch

FY07 
4B – Information Technology Strategy 

The OCC’s strategic plan for meeting its IT needs is tied to the current and target

enterprise architecture. The OCC’s enterprise architecture provides the agency with the 

data, technology, and infrastructure needs to support the operational and strategic needs 

of the business. The OCC’s capital planning process ensures that all IT investments are 

aligned with the current or target enterprise architecture and will align to the mission of

the OCC before a project is selected for funding. 

The capital planning process ensures that business cases are reviewed to ensure alignment 

to Enterprise Architecture (EA), to leverage opportunities to use existing technology, to 

capitalize on enterprise opportunities as well as ensure that there is no redundancy in IT

systems that are selected into 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 and Subcommittee 

(TSS). The TSS is chaired by the Chief Information Officer and includes the Senior 

Deputy Comptrollers for Large Bank Supervision, International and Economic Affairs, 

the Chief Financial Officer, and the Chief of Staff. Both the IRB and TSS have regularly 

scheduled meetings to address IT investments. This process ensures that the overall IT 

strategy has adequate funding, resources, and prioritization to support the direction of 

Information Technology in alignment with the mission, goals and objectives of the 

agency. 

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. Investments are monitored on a quarterly basis by the IRB and TSS. The 

OCC's IT investments are also subject to Quarterly Control reviews conducted 

by Treasury’s CIO Council. During the Quarterly Control Review meetings, the IRB and 

TSS decide whether to continue, defer, or terminate projects based on project 

performance including performance metrics. If it is determined that the project is not 

meeting its performance metrics, it first is asked to develop a remediation plan to address 

the risk. The IRB monitors the risk mitigation implementation process and decides 

whether the strategy is satisfactory. The IRB decides whether to terminate or proceed 

with the project based on the results of the implementation of the risk mitigation strategy. 

OCC -23 
4.2 – PART Evaluation Table 

PART Name: Bank Supervision

Year PARTed: FY 2003

Rating: Effective

OMB Major Findings/Recommendations

Bureau Actions Planned or Underway

2. Federal banking regulatory agencies, including the OCC, the Office of Thrift Supervision (OTS), the National Credit

Union Administration (NCUA), the Federal Reserve, and the Federal Deposit Insurance Corporation (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 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, Federal Reserve, Office of Federal Housing 

Enterprise Oversight (OFHEO), Securities and Exchange Commission (SEC), and the Federal Housing Finance

Board (FHFB) continue to share their strategic plans, performance plans, 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 PART results visit the following website: 

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

OCC – 24