Office of Comptroller of the Currency

Program Summary by Budget Activity

Dollars in thousands

Budget Activity FY 2011 FY 2012 FY 2013 FY 2012 TO FY 2013

 

 Actual 1/ Estimated 2/ Estimated 2/ $ Change % Change

 

Supervise $707,845 $1,052,200 $942,000 ($110,200) -10.5%

Regulate $95,699 $142,800 $127,870 ($14,930) -10.5%

Charter $21,450 $31,079 $27,830 ($3,249) -10.5%

Total Cost of Operations/3 $824,994 $1,226,079 $1,097,700 ($128,379) -10.5%

FTE 3,150 3,822 3,898 76 2%

(1) For the majority of FY 2011, the OCC did not regulate federal savings associations.

(2) FY 2012 and FY 2013 estimates include the cost of regulating the national banks and federal savings associations.

(3)

 Estimates of total budgetary obligations in FY 2012 do not match those presented in the President's Budget due to inclusion 

of the OTS Public Enterprise Fund, which was included in error.

Summary

The Office of the Comptroller of the Currency 

(OCC) was created by Congress to charter 

national banks, oversee a nationwide system of 

banking institutions, and ensure national banks 

are safe and sound, competitive and profitable, 

and capable of serving in the best possible 

manner the banking needs of their customers. 

Effective on July 21, 2011, Title III of the 

Dodd-Frank Wall Street Reform and 

Consumer Protection Act (Dodd-Frank Act), 

transferred to OCC responsibility for the 

supervision of federal savings associations 

(thrifts) and rulemaking authority for all 

savings associations. 

The OCC supervises 1,400 national bank 

charters and 48 federal branches of foreign 

banks in the United States with total assets of 

approximately $8.9 trillion as of September 

30, 2011. Effective July 21, 2011, with the 

OCC/Office of Thrift Supervision (OTS) 

integration, the OCC assumed supervisory 

responsibility of 637 federal savings 

associations, which include 216 mutuals, with 

total assets of over $922 billion. The average 

size and complexity of the institutions in the 

national banking system continue to grow. 

This, combined with the OCC’s supervision of 

federal savings associations and responsibility 

for the Home Owners’ Loan Act, creates 

increasing and diverse challenges for the OCC. 

The OCC has established four strategic goals 

outlined in its strategic plan that help support a 

strong economy for the American public: 1) A 

safe and sound system of national banks and 

federal savings associations; 2) Fair access to 

financial services and fair treatment of national 

bank and federal savings association 

customers; 3) A flexible legal and regulatory 

framework that enables national banks and 

federal savings associations to provide a full, 

competitive array of financial services 

consistent with statutory and prudential safety 

and soundness constraints; and 4) A 

competent, 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 its goals and objectives. 

Effective supervision, supported by a 

comprehensive regulatory framework, are the 

key tools the OCC uses to ensure that national 

banks and federal savings associations operate 

in a safe and sound manner and that they 

provide fair access to financial services and 

fair treatment of their customers. A robust 
chartering program allows new entry into the 

financial services sector while ensuring that 

such new entrants have the necessary capital, 

managerial, and risk management processes to 

conduct activities in a safe and sound manner.

Through on-site examinations, the OCC works

to ensure that national banks and federal 

savings associations appropriately identify, 

account for, and follow prudent strategies for 

problem assets; and instill a strong corporate 

governance culture that fosters sound loan 

underwriting standards, properly aligned 

incentive compensation structures, and strong 

internal controls, risk management, and 

compliance functions. Other supervisory 

priorities will be identifying and resolving 

potential problem banks at the earliest possible 

stage; encouraging national banks and federal 

savings associations to meet the needs of 

creditworthy borrowers, including appropriate 

and effective residential mortgage 

modification programs; ensuring that 

institutions comply with the Community 

Reinvestment Act (CRA), 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 requirements and that they 

maintain strong controls and risk management 

processes for information security; and further 

enhancing the OCC’s supervisory analytical 

tools. 

Operations are funded primarily 

(approximately 97 percent) from semiannual 

assessments levied on national banks, and 

federal savings associations. Revenue from 

investments in Treasury securities and other 

income comprise the remaining three percent 

of the OCC’s funding. 

The OCC does not receive congressional 

appropriations to fund any portion of its 

operations.

Explanation of Budget Activities

Supervise ($1,052,200,000 from reimbursable 

resources)

The Supervise program consists of ongoing 

supervision and enforcement activities 

undertaken to ensure that each national bank 

and federal savings association is operating in 

a safe and sound manner and is complying 

with applicable laws, rules, and regulations 

relative to the financial institution and the 

customers and communities it serves. 

Included are examinations and enforcement 

activities; resolution of disputes through a 

formal Appeals process; ongoing monitoring 

of national banks and federal savings 

associations; and analysis of systemic risks in 

the national banking system or groups of 

national banks or federal savings associations, 

the financial services industry, and the 

economic and regulatory environment.

Regulate ($142,800,000 from reimbursable 

resources)

The Regulate program consists of ongoing 

activities that result in the establishment of 

regulations, policies, operating guidance, and 

interpretations of general applicability to 

national banks and federal savings 

associations. These regulations, policies, and 

interpretations may establish system-wide 

standards, define acceptable financial 

practices, provide guidance on risks and 

responsibilities facing national banks and 

federal savings associations, or prohibit (or 

restrict) financial practices deemed to be 

imprudent or unsafe. This includes 

establishing examination policies, handbooks, 

and interpretations in administrative, judicial, 

and congressional hearings.

Charter ($31,079,000 from reimbursable 

resources)

The Charter program consists of ongoing 

activities that result in the chartering of 

national banks and federal savings associations

as well as the evaluation of the permissibility 
of structures and activities of national banks 

and federal savings associations and their 

subsidiaries. This includes the review and 

approval of new national bank and federal 

savings association charters, federal branches 

and agencies, mergers, acquisitions, 

conversions, business combinations, corporate 

reorganizations, changes in control, operating 

subsidiaries, branches, relocations, and 

subordinated debt issues.

Legislative Proposals

OCC has no legislative proposals.

OCC Performance by Budget Activity

Budget Activity Performance Measure FY 2009 FY 2010 FY 2011 FY 2012 FY 2013

Actual Actual Actual Target Target

Supervise Percent of National Banks and Federal 

Savings Associations With Composite 

CAMELS Rating 1 or 2 

82.0 70.0 75.0 90.0 90.0

Supervise Percentage of National Banks and Federal 

Savings Associations that are Categorized 

as Well Capitalized 

86.0 90.0 93.0 95.0 95.0

Supervise Percentage of National Banks and Federal 

Savings Associations with Consumer 

Compliance Rating of 1 or 2 

97.0 95.0 94.0 94.0 94.0

Supervise Rehabilitated National Banks and Federal 

Savings Associations as a Percentage of 

Problem National Banks One Year Ago 

(CAMEL 3,4, or 5) 

29.0 23.0 22.0 40.0 40.0

Charter Percentage of Licensing Applications and 

Notices Completed within Established 

Timeframes 

95.0 96.0 97.0 95.0 95.0

Key: DISC - Discontinued and B – Baseline

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. The OCC has 

established a 95 percent target that national 

banks and federal savings associations will 

meet or exceed the well capitalized threshold. 

For FY 2011, 93 percent of national banks 

were classified as well capitalized. 

The composite CAMELS (Capital adequacy, 

Asset quality, Management, Earnings, 

Liquidity, and Sensitivity to market risk) 

rating reflects the overall condition of a 

national bank or federal savings association. 

Bank regulatory agencies use the Uniform 

Financial Institutions Rating System, 

CAMELS, to provide a general framework for 

evaluating all significant financial, operational, 

and compliance factors inherent in a national 

bank or federal savings association. The rating 

scale is 1 through 5 of which 1 is the highest 

rating granted. CAMELS ratings are assigned 

at the completion of every supervisory cycle or 

when there is a significant event leading to a 
change in CAMELS. The OCC has 

established a 90 percent target that institutions 

under its supervision have a composite 

CAMELS rating of 1 or 2. Such a rating is 

consistent with the strategic goal of a safe and 

sound banking system, that banks maintain 

adequate capital and liquidity and have strong 

risk management practices. For FY 2011, 75 

percent of national banks earned composite 

CAMELS rating of either 1 or 2. 

Problem national banks and federal savings 

associations ultimately can reach a point at 

which rehabilitation is no longer feasible. The 

OCC’s early identification and intervention 

with problem financial institutions can lead to 

successful remediation. For FY 2011, 22 

percent of national 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 other measures, this target has 

been adversely affected by the underlying 

economic conditions facing the banking 

industry. 

To ensure fair access to financial services and 

fair treatment of national bank and federal 

savings association customers, the OCC 

evaluates an institution’s compliance with 

consumer laws and regulations. Bank

regulatory agencies use the Uniform Financial 

Institutions Rating System, Interagency 

Consumer Compliance Rating, to provide a 

general framework for evaluating significant 

consumer compliance factors inherent in an 

institution. Each institution assigned a 

consumer compliance rating based on an 

evaluation of its present compliance with 

consumer protection and civil rights statutes

and regulations, and the adequacy of its 

operating systems designed to ensure 

continuing compliance. Ratings are on a scale 

of 1 through 5 of which 1 is the highest rating 

granted. National banks continue to show 

strong compliance with consumer protection 

regulations with 94 percent earning a 

consumer compliance rating of either 1 or 2 

for FY 2011.

The OCC’s timely and effective approval of 

corporate applications contributes to the 

nation’s economy by enabling national banks 

and federal savings associations to complete 

various corporate transactions and introduce 

new financial products and services. Delays in 

providing prompt decisions on applications 

and notices can deprive a national bank or 

federal savings association of a competitive or 

business opportunity, create business 

uncertainties, or diminish financial results. 

Time frames have been established for 

completing each type of application and 

notice. For FY 2011, the OCC completed 97 

percent of national bank applications and 

notices within the time frame. 

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 financial 

institution 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 national banks and federal savings 

associations benefits all national bank and 

federal savings association customers. 

All FY 2011 performance measures do not 

include federal savings associations. For 

FY 2012, federal savings associations will be 

incorporated into the OCC’s performance 

measure.