Office of Comptroller of the Currency 

Program Summary by Budget Activity 

(Dollars in thousands) 

Budget Activity FY 2009 FY 2010 FY 2011 

Actual Estimated Estimated $ Change % Change

$597,859 $661,039 $694,220 $33,181 5.0%

$94,511 $104,499 $109,744 $5,245 5.0%

$23,628 $26,125 $27,436 $1,311 5.0% 

Total Cost of Operations $715,998 $791,663 $831,400 $39,737 5.0% 

Supervise 

Regulate 

 Charter 

Explanation of Budget Estimate 

As of September 30, 2009, The Office of the 

Comptroller of the Currency (OCC) supervised approximately 1,564 national bank 

charters and 51 federal branches of foreign 

banks in the United States (U.S.). Total assets 

under the OCC supervision were approximately $8.3 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. 

The OCC’s priorities for fiscal year (FY) 2010 

include supervisory issues related to continued 

adverse changes in national bank asset quality 

and risk profiles: working with the U.S. 

Treasury and other supervisors domestically 

and internationally to strengthen supervisory 

processes and banks’ capital, liquidity, 

corporate governance, risk management 

practices; assessing the potential impact of, 

and ensuring national banks’ compliance with 

any new applicable statutory, regulatory, and 

accounting standards; identifying and 

resolving potential problem banks at the 

earliest possible stage; further enhancing the 

OCC’s supervisory analytical tools, including 

the joint OCC and Office of Thrift Supervision 

(OTS) mortgage metrics database and reports; 

and encouraging national banks to continue to 

meet the needs of credit worthy borrowers, 

including appropriate and effective residential 

mortgage modification programs, and ensuring 

that they comply with Community Reinvestment Act (CRA), fair lending, and other 

consumer protection laws and with BSA/AML 

and USA PATRIOT Act requirements. 

Assessing the adequacy of national banks’ 

credit and liquidity risk management and 

consumer compliance practices, and obtaining 

corrective action to address any identified 

safety and soundness and consumer compliance weaknesses will continue to be a major 

focus of the OCC on-site supervisory activities 

in FY 2010. Coordination and cooperation 

with state officials will be a significant focus 

for the agency. Maintaining and enhancing 

examiners’ skill sets, recruiting entry-level 

examiners and enhancing their retention at the 

critical three/four-year point of their careers, 

and continuing to develop the next generation 

of bank supervision leadership are also critical 

initiatives of the OCC. 

In FY 2010, an estimated $791,663,000 is 

needed to fund ongoing OCC operations and 

address program priorities effectively. Estimated OCC revenue for FY 2010 is 

$827,100,000. 

The OCC collects revenue primarily from 

semiannual assessments levied on national 

banks. The OCC receives no appropriated 

funds from Congress. 

Information regarding the Administration’s 

comprehensive regulatory reform proposals is 

provided in a separate budget chapter. 

Department of the Treasury - Budget in Brief FY 2011 Page 103
Purpose of Program 

The 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. 

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. 

Explanation of Budget Activities 

Supervise ($661,039,000 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. 

Regulate ($104,499,000 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. 

Charter ($26,125,000 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. 

Capital Investments Summary 

The OCC developed a Technology Vision 

2012 Roadmap that aligns to the agency’s core 

mission to ensure a safe and sound national 

banking system for all Americans. In 

addition, in FY 2009, the OCC established 

specific IT goals to leverage information 

Department of the Treasury - Budget in Brief FY 2011 Page 104
technology as a strategic business enabler to 

support the OCC’s strategic goals. 

Even though there are no new major IT 

initiatives planned in FY 2010, the OCC will 

continue to implement the OCC Technology 

Vision 2012 Roadmap with a focus on enterprise data analytics and information sharing, 

optimizing technology solutions for the mobile 

workforce, aligning IT investment decision 

making with the enterprise architecture and 

business objectives and managing the risk to 

OCC assets and improving internal efficiency 

and effectiveness. 

To address the challenges faced by the OCC 

mobile workforce, in FY 2010 the OCC will 

continue the Integrated - Mobile Employee 

Technical Refresh & Optimization (IMETRO) initiative. I-METRO will provide 

new laptops, PCs, and other peripheral devices 

and provide enhanced connectivity and mobile 

access. This initiative will reduce the costs of 

desktops, laptops and peripheral devices 

through a strategic sourcing service manageOCC Performance by Budget Activity 

Budget Activity Performance Measure 

FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 

Actual Actual Target Actual Target 

Met? Target Target 

Supervise Percent of national banks with composite 

CAMELS rating 1 or 2 

96 92 90 82 N 90 90 

Supervise Percentage of national banks that are 

categorized as well capitalized 

99 99 95 86 N 95 95 

Supervise Percentage of national banks with 

consumer compliance rating of 1 or 2 

97 97 94 97 Y 94 94 

Supervise Rehabilitated national banks as a 

percentage of problem national banks 

one year ago (CAMEL 3,4, or 5) (%) 

52 47 40 29 N 40 40 

Charter Percentage of licensing applications and 

notices completed within established 

timeframes 

96 95 95 95 Y 95 95 

ment approach. Examiners in the field will 

now have access to the best providers of 

wireless services commensurate with the 

geographic location of their bank examination. 

The OCC will continue to modernize the 

agency’s technical infrastructure. The Data 

Center Modernization & Optimization 

(DCM&O) initiative began in FY 2009 and 

focuses on the development and implementtation of strategies and initiatives for 

infrastructure optimization. The DCM&O will 

maximize service delivery of the OCC data 

center and includes investing in human capital 

by addressing training needs; realigning 

multiple contract vehicles to better deliver core 

services and lower total cost of ownership for 

these services; and improving processes and 

reducing the number of servers to attain a 

"green" data center. 

Description of Performance 

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, 2009, 86 percent of national 

banks were classified as well capitalized. This 

decline is reflective of the increasing number 

of problem national banks whose capital levels 

Department of the Treasury - Budget in Brief FY 2011 Page 105
have been adversely affected by substantial 

asset quality problems or who may otherwise 

meet the minimum ratios to be considered 

Well Capitalized but are not considered so 

under Prompt Corrective Action as they are 

under a capital order, Cease and Desist, 

Formal Agreement or Prompt Corrective 

Action Directive to reflect increased risks to 

their capital. The OCC works closely with 

problem banks to develop rehabilitation plans. 

Such plans typically include directives to 

improve or restore capital levels. More 

broadly, the OCC is working with other 

regulators both domestically and internationally to strengthen capital standards and 

improve credit risk management practices. 

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, 2009, 82 percent of 

national banks earned composite CAMELS 

rating of either 1 or 2. The increase in the 

number of banks with lower composite 

CAMELS ratings is not unexpected at this 

stage of the credit cycle and reflects impaired 

asset quality and earnings that is affecting 

many banks. Our primary focus is to ensure 

that CAMELS ratings are an accurate 

reflection of each bank's current financial 

position and thus we would not take action to 

prematurely restore a favorable CAMELS 

rating even though the current distribution of 

ratings is below our target. As bank 

performance and asset quality improves, we 

would expect CAMELS ratings to adjust 

accordingly. 

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, 29 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. As with the other measures, this target 

benchmark has been adversely affected by the 

underlying economic conditions facing the 

banking industry. The number of serious 

problem banks, where successful resolution is 

more difficult, has increased. In addition, the 

sharp contraction in certain segments of the 

economy, including the real estate sector, has 

resulted in a more rapid deterioration in some 

banks' financial condition. 

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 

Department of the Treasury - Budget in Brief FY 2011 Page 106
a consumer compliance rating of either 1 or 2 

through September 30, 2009. 

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, 2009. 

Institutions receiving decisions on their cor 

-porate applications and notices rated the 

OCC’s overall licensing services an average of 

1.2. The licensing survey is based on a fivepoint rating scale, in which 1 indicates 

outstanding and 5 indicates significantly 

deficient. 

Beginning in FY 2006, the OCC implemented 

a performance measure that reflects the 

efficiency of its operations while meeting the 

increasing supervisory demands of a growing 

and more complex national banking system. 

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. 

Department of the Treasury - Budget in Brief FY 2011 Page 107