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Overview

Mission Statement

To ensure a safe and sound system of national banks and Federal savings associations for all 

Americans.

Program Summary by Budget Activity

Dollars in Thousands

FY 2010 FY 2011 FY 2012 FY 2010 to FY 2012

Actual Estimated 1/ Estimated 2/ $ Change % Change

 Supervise $618,254 $680,090 $900,836 $282,582 45.7%

 Regulate $97,735 $107,511 $111,936 $14,201 14.5%

 Charter $24,434 $26,878 $27,984 $3,550 14.5%

Total Resources $740,423 $814,479 $1,040,756 $300,333 40.6%

Total FTE 3,101 3,140 3,976 875 28.2%

1) It is anticipated that for the majority of FY 2011, the OCC will not be regulating the Federal savings associations; 

accordingly, the FY 2011 estimates only reflect the cost of regulating the National Banking System. Figures are subject to 

revision once the personnel realignment provisions of the Dodd-Frank Act are implemented.

(2) FY 2012 estimates include the cost of regulating the National Banking System and Federal savings associations. Figures

are subject to revision once the personnel realignment provisions of the Dodd-Frank Act are implemented.

FY 2011 Priorities

The Office of the Comptroller of the Currency’s (OCC) priorities for fiscal years (FYs) 2011 and 

2012 are directly tied to the goal of repairing and reforming the financial system. The priorities 

and activities discussed below refer to national banks for FY 2011 and to both national banks and 

Federal savings associations for FY 2012. Under the Dodd-Frank Wall Street Reform and 

Consumer Protection Act (Dodd-Frank Act) the transition period to transfer functions of the 

Office of Thrift Supervision (OTS) to the OCC approximately coincides with FY 2011. 

Priorities and activities to achieve these goals include the following:

 Regulate and supervise 1,487 national bank charters and 51 federal branches of foreign banks 

with total assets of approximately $8.6 trillion, as of September 30, 2010. As a result of the 

Dodd-Frank Act, in FY 2012 the OCC anticipates supervising approximately 700 Federal 

savings associations with assets currently totaling approximately $0.9 trillion;

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

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

with consumer protection laws and regulations1;

 

1 Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Bureau of Consumer Financial 

Protection is given the authority to supervise and examine insured depository institutions of over $10 billion in asset 

size for compliance with enumerated federal consumer financial laws. The OCC will continue to conduct

examinations to assess compliance of consumer protection issues for national banks and Federal savings 

associations with $10 billion or less in assets, and to examine all national banks for compliance with the Bank 

Secrecy Act, flood insurance regulations, and the Community Reinvestment Act.
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 Assess the adequacy of national banks’ and Federal savings associations’ credit, liquidity, 

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

action when deficiencies or undue risk concentrations are found;

 Continue to monitor and assess the effectiveness of national bank mortgage servicers’ loan 

modification and foreclosure actions, including needed actions to improve the corporate 

governance of their processes;

 Resolve problem national bank and Federal savings association situations effectively by 

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

expectations to bank management through appropriate enforcement actions, and ensuring 

timely follow-up on needed corrective actions; 

 Strengthen the credit culture across the national banking and Federal savings association 

system to ensure prudent underwriting standards are maintained;

 Develop and implement policies to ensure that national banks and Federal savings 

associations establish and maintain incentive compensation policies that are consistent with 

the safety and soundness of the bank and do not encourage imprudent risk-taking; 

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

liquidity requirements and more robust risk management standards for large financial 

institutions; 

 Enhance our ability to anticipate, identify, and respond to build-ups in risk and emerging 

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

capabilities; 

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

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

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

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

national banks’ compliance with the Bank Secrecy Act/Anti-money laundering (BSA/AML), 

and the Uniting and Strengthening America by Providing Appropriate Tools Required to 

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

 Work with the Department of Treasury and other federal financial regulators to implement 

the Dodd-Frank Act, which includes the transfer from OCC of certain supervisory 

responsibilities and personnel associated with consumer compliance activities to the 

Consumer Financial Protection Bureau (CFPB), and the integration of the OTS functions 

relating to Federal savings associations into the OCC; and

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

through entry of new charters, other bank and thrift structure transactions, and expansion of 

bank and thrift services and products in a safe and sound manner.
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Table of Contents

Overview ........................................................................................................................................ 1

Mission Statement....................................................................................................................... 1

Program Summary by Budget Activity....................................................................................... 1

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

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

1B – Program History and Future Outlook ................................................................................. 5

1C – Industry Outlook............................................................................................................... 18

Section 2 – Budget Adjustments and Appropriation Language............................................. 20

2.1 – Budget Adjustments Table ............................................................................................... 20

2A – Budget Increases and Decreases Description................................................................... 20

2.2 – Operating Levels Table .................................................................................................... 21

2.3 – Resource Detail Table ...................................................................................................... 22

2B – Appropriations Language and Explanation of Changes................................................... 22

2C – Legislative Proposals........................................................................................................ 22

Section 3 – Budget and Performance Plan ............................................................................... 23

3.1 – Budget by Strategic Outcome .......................................................................................... 23

3.2.1 Supervise Budget and Performance Plan ......................................................................... 24

3.2.2 Regulate Budget and Performance Plan........................................................................... 26

3.2.3 Charter Budget and Performance Plan ............................................................................. 27

Section 4 – Supporting Materials .............................................................................................. 28

4A – Human Capital Strategy Description................................................................................ 28

4.1 – Summary of IT Resources Table...................................................................................... 30

4B – Information Technology Strategy..................................................................................... 31
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Section 1 – Purpose

1A – Description of Bureau Vision and Priorities

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. With 

the enactment of the Dodd-Frank Act in July of 2010, the OCC will also be responsible for the 

supervision of Federal savings associations and rulemaking authority for all savings associations. 

The OCC supervises 1,487 national bank charters and 51 federal branches of foreign banks in the 

United States. Total assets under the OCC supervision are approximately $8.6 trillion or 

approximately 70 percent of total United States commercial banking assets. As a result of the 

Dodd-Frank Act, in FY 2012 the OCC anticipates supervising approximately 700 Federal 

savings associations with assets currently totaling approximately $0.9 trillion. The average size 

and complexity of the institutions in the national banking system continue to grow. This, 

combined with OCC’s supervision of Federal savings associations and responsibility for the 

Home Owners’ Loan Act creates increasing and diverse challenges for the OCC. 

As the regulator of national banks, the OCC has established four strategic goals outlined in its 

strategic plan that help support a strong economy for the American public: 1) assuring the safety 

and soundness of the institutions subject to its jurisdiction; 2) fair access to financial services and 

fair treatment of bank customers; 3) a flexible legal and regulatory framework that enables the 

institutions subject to its jurisdiction 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.

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

jurisdiction through our supervisory and regulatory programs and activities. Through on-site 

examinations, OCC will work to ensure that national banks and Federal savings associations 

appropriately identify, account for, and follow prudent strategies for problem assets; 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 credit worthy borrowers, including appropriate and effective 

residential mortgage modification programs, and ensuring that they comply with the Community 

Reinvestment Act (CRA) and the BSA/AML and USA PATRIOT Act requirements; and further 

enhancing OCC’s supervisory analytical tools. 

A major focus of the OCC’s supervisory, regulatory, and administrative programs in FYs 2011-

2012 will be implementing applicable provisions of the Dodd-Frank Act. The OCC will work 

closely with the Treasury and other federal regulatory agencies on these initiatives, including 

developing and issuing implementing rulemakings on a broad range of topics, including 

regulatory capital; permissible proprietary trading, hedge fund, and private equity fund 

investments (the so-called Volcker rule); derivative margin requirements; executive 
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compensation; risk retention standards for securitizations; and real estate appraisals. Similarly, 

the OCC is working to provide smooth transitions for the transfer and integration of various 

regulatory and supervisory functions across and among the agencies. These efforts will include 

the transfer of certain supervisory responsibilities and personnel associated with consumer 

compliance activities to the CFPB and the integration of the OTS functions and personnel into 

the OCC. 

The FY 2012 budget is based on initial estimates prepared by the OCC and the OTS. These

estimates are subject to revision based on the financial impact of certain events which include,

but are not limited to, the number of OTS personnel that transfer to either the OCC or the Federal 

Deposit Insurance Corporation (FDIC), the number of OCC and OTS staff that transfer to the 

newly established CFPB, and the final distribution of assets between the banking agencies upon 

the dissolution of the OTS. The exhibits have been footnoted accordingly to reflect these 

uncertainties.

1B – Program History and Future Outlook

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

Dallas, Denver, and New York, and field and satellite offices throughout the United States. 

Resident examiner teams are located in the largest banking companies, and there is an examining 

office in London, England.

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

on national banks, and for FY 2012, 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. 

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

environment. While economic conditions are expected to continue to improve in FY 2011, 

global markets and events may continue to threaten economic recovery and stability. Many 

national banks and Federal savings associations will continue to have substantial volumes of 

troubled loans and borrowers that will consume resources, strain earnings, and, in some cases, 

may require continued growth in loss reserves. National banks and Federal savings associations 

will face heightened compliance, reputation, and strategic risks as a result of significant changes 

in the statutory, regulatory, and accounting requirements for various bank and thrift products, 

services, and transaction structures. Banks and Federal savings associations will need to 

successfully integrate these changes into their operations and it is likely that some of these 

changes will foster fundamental shifts in some banks’ and thrifts’ business models and strategic 

plans. Increasingly, the OCC will need to coordinate many of its supervisory regulations, 

policies and actions with other supervisors, both domestically and internationally. 

To address these challenges, the OCC will need to conduct ongoing assessments of emerging 

risks and the underlying condition of national banks and Federal savings associations, and to 

prioritize and allocate resources to the areas and institutions of highest risks. 
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The following are highlights of the OCC’s FY 2010 accomplishments and specific FYs 2011-

2012 challenges.

Supervisory Activities

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

system: 

1. policy guidance and regulations that set forth standards for sound banking practices; 

2. on-site examinations and ongoing off-site monitoring that enable the OCC to assess 

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

3. a variety of supervisory and enforcement tools – ranging from matters requiring board’s and 

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

corrective action to remedy weaknesses, deficiencies, or violations. 

Upon the transfer of OTS functions, the OCC will incorporate similar supervisory activities to 

influence Federal savings associations.

Federal banking agencies regularly share supervisory information and undertake coordinated 

enforcement actions. As an example, when the OCC issues a remedial enforcement action 

against a national bank, the Board of Governors of the Federal Reserve System (FRB) will often 

take a complementary action with respect to the bank’s holding company. Pursuant to an 

interagency sharing agreement, the federal banking agencies regularly exchange documents and 

information concerning fraudulent activities, including suspicious activity reports that involve 

suspected illegal activities at multiple financial institutions, and notify each other of enforcement 

actions against depository institutions and individuals. 

The OCC also coordinates extensively with other regulatory agencies and with law enforcement 

authorities. It has entered into similar information sharing agreements with most state banking 

agencies, and all 50 state insurance departments, and regularly shares information with the 

Securities and Exchange Commission (SEC). The agency makes enforcement referrals to all of 

these regulators, as well as to state licensing boards and state professional ethics and 

responsibility boards, with respect to misconduct by attorneys, accountants, real estate agents, 

appraisers, and other professionals. The agency also makes enforcement referrals and cooperates 

in investigations conducted by several federal agencies, including, the Financial Crime 

Enforcement Network (FinCEN), the Department of Labor, the Internal Revenue Service, the 

Department of Housing and Urban Development (HUD), the Federal Election Commission, and 

the Federal Trade Commission (FTC). Suspected criminal violations, including evidence of 

fraud, are referred to the Department of Justice (DOJ). The OCC assists the DOJ, the Federal 

Bureau of Investigation, and the United States Secret Service in their investigations and 

prosecutions of fraud, as appropriate, by providing the OCC examiners to serve as special agents 

to the grand jury and as expert banking witnesses for the prosecution at trial. The OCC is a 

member of the National Interagency Bank Fraud Working Group and the President’s Corporate 

Fraud Task Force. 

The OCC continuously supervises banks through examination 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 
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soundness, consumer compliance, BSA/AML, USA PATRIOT Act, fair lending, asset 

management, bank information technology, and the CRA. 

The OCC monitors and alerts the industry to emerging risks and practices that could adversely 

affect a bank’s safety and soundness or compliance with banking laws and regulations through 

policy programs. Over the last several years, the OCC issued a series of supervisory guidelines

to address weaknesses in bank underwriting standards and credit practices. These guidelines 

addressed credit card account management; loss allowance practices; sound risk management 

practices for concentration loans in Commercial Real Estate (CRE) lending; credit risk 

management for home equity lending; and nontraditional and subprime mortgage products. 

More recently, the OCC has issued guidance on the need for sound interest rate risk and liquidity 

risk management practices and the risks associated with funding and credit concentrations arising 

from correspondent relationships.

In FY 2010, the OCC conducted a survey of national banks to assess the effectiveness of 

supervisory policies. The OCC requested feedback from bankers on how effectively the agency

conveys and might improve: the reasons behind the issuance of new supervisory guidance; the 

intended audience for new supervisory guidance (all banks, only banks with a specific product 

line or service, only banks of a certain asset size, etc.); specific actions OCC expects bank 

management to take in response to new supervisory guidance; the risks to the bank if supervisory 

guidance is not implemented, such as legal, regulatory, reputation, or safety and soundness risk; 

and the expected timing of bank management's implementation of supervisory guidance. Over 

75 percent of those who responded said they were receiving the right amount of information for 

all subject areas. Bankers were also generally pleased with the overall quality of OCC bulletins 

and handbooks (clarity, conciseness, usefulness, and completeness).

The OCC supervisory activities in FY 2010 centered on monitoring and responding to adverse 

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

focus of on-site supervisory activities was the quality of national banks’ credit risk management 

practices, as evidenced by effective credit risk rating systems and problem loan identification, 

adequate loan loss reserves in light of deteroriating credit quality, and effective loan work-out 

strategies. The OCC continues to encourage bankers to work with creditworthy borrowers who 

may be facing financial difficulties. Other areas of emphasis were sound liquidity risk 

management, with diversified funding sources and realistic contingency funding plans, and 

strengthening capital buffers to weather further earnings pressures and asset quality deterioration. 

While assessing credit quality, adequacy of loan loss reserves, liquidity, capital, and risk 

management practices have been and continue to be the OCC’s primary focus. The OCC is

cognizant of the continuing need to address supervisory issues in the areas of fair lending, 

consumer protection, BSA/AML, and information security. 

In the wake of the reported improprieties in the foreclosure processes used by several large 

mortgage servicers in the fall of 2010, the OCC initiated a horizontal, on-site review at the eight 

largest national bank mortgage servicers. A key objective of these examinations was to 

independently test and verify the adequacy and effectiveness of governance over the foreclosure 

process. The FRB and FDIC are participating in these examinations. For the most part, these 

examinations are complete. During the second quarter of FY 2011, the agency anticipates 
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completing the analysis of the examinations conducted to determine what additional supervisory 

or regulatory action may be needed.

Legislative changes will significantly affect the scope of the OCC’s supervisory activities, by, 

for example, transferring the functions formerly performed by the OTS for Federal savings 

associations into the OCC, and transferring designated consumer compliance functions to the 

CFPB. Executing these transfers will be a major initiative for the agency that will likely require 

substantial resources. The OCC is committed to working closely with its regulatory partners in 

ensuring a smooth transition, while continuing to maintain a focus on ensuring the safety and 

soundness of national banks and beginning to focus on ensuring the safety and soundness of 

Federal savings associations.

Monitoring Credit Quality

Monitoring and evaluating the quality of the loans and investments made by national banks are a 

fundamental component of the OCC’s supervision program. Examiners evaluate asset quality 

and the adequacy of bank’s credit and investment risk management and controls through on-site 

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

occurred in their loans or investments, and that the banks maintain adequate reserves for inherent 

losses in their loan portfolios.

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 in the banking system. Fiscal year

2010 activities included:

 Annual Survey of Credit Underwriting Practices - This annual survey, conducted by the OCC 

examiners and Credit Risk staff, identifies trends in lending standards and credit risk for the 

most common types of commercial and retail credit products offered by national banks. It 

provides an aggregate snapshot of how various factors, such as competition, are affecting 

how banks price and underwrite loans and whether the OCC believes the inherent credit risk 

in bank portfolios are increasing or decreasing. The 2010 survey included 51 of the largest 

national banks and covered the 12-month period ending March 31, 2010. The aggregate total 

of loans was $4 trillion, which represented over 93 percent of all outstanding loans in the 

national banking system. The survey results, published in August 2010, indicated that 

underwriting standards continued to tighten during the survey period (March 2009 – March 

2010) for both commercial and retail loans, but at a lower rate than the 2009 survey. In 

certain products, OCC examiners saw some evidence of banks once again loosening 

standards in response to competition and a modest improvement in credit market liquidity. 

However, examiners reported that the overall level of credit risk increased in retail and 

commercial portfolios during the survey period, and they expect the level of risk to continue 

to increase over the next 12 months. 

 Shared National Credit Review - The annual Shared National Credit (SNC) review is a joint 

program conducted by the OCC, the FRB, the FDIC, and the OTS. The SNC review 

addresses large syndicated loans held by multiple financial institutions. The 2010 review 

covered approximately 8,300 credit facilities with commitments totaling $2.5 trillion. A 
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SNC Press Release with results of 2010 SNC review was issued September 28, 2010. Credit 

quality of large loan commitments remained weak in 2010, but improved from 2009, 

according to the results of the 2010 SNC review. The OCC continued work on an 

interagency project to modernize the collection and analysis of SNC data and to improve the 

program’s efficiency and effectiveness. The interagency SNC central information data 

repository was put into production in December 2009. The first development phase of the 

examination application will be implemented for use during the 2011 SNC examination. 

This application will be enhanced with a final release for the 2012 SNC examination, in 

addition to completion of analytical tools and reports. This development work is scheduled 

to be completed in calendar year 2011 and 2012.

 Risk Concentrations - The market turmoil and subsequent economic downturn highlighted 

the risks posed by undue asset or liability concentrations in bank portfolios. Community 

banks can be especially prone to such concentrations as their lending portfolios tend to be 

highly concentrated in their local markets. As noted above, the OCC and other federal 

banking agencies warned financial institutions of the risks that were accumulating in many 

financial institutions’ CRE loan portfolios. In addition, the OCC developed several 

diagnostic tools that bankers can use to help assess the risk in their CRE portfolios. 

The OCC conducted asset quality reviews of all the OCC community and mid-size banks that 

have significant CRE concentrations to assess the adequacy of credit underwriting, problem 

loan identification, and loan loss reserves for these portfolios. These efforts included a stress 

test of CRE portfolios at a number of midsize regional banks that have significant CRE 

concentrations. Monitoring national banks [and Federal savings associations] with 

significant CRE concentrations will be a primary focus of the OCC’s supervisory strategies 

in FYs 2011 and 2012. 

 Enhanced Credit Data Analytics - To improve the OCC’s ability to monitor credit quality 

trends at the largest national banks and to identify potential trends that could pose systemic 

risks to the industry as a whole, the OCC has worked with several data aggregators to collect

and validate data on home equity, credit card, CRE, and large corporate syndicated credits at 

the largest national banks. These efforts build off of the highly successful mortgage metrics 

project that the OCC initiated in FY 2008. All loan-level data collections are in production. 

During FYs 2011-2012, work will continue to integrate and further develop analytical and 

reporting tools applicable to both national banks and Federal savings associations. 

Promoting Credit Availability to Creditworthy Borrowers

Throughout the economic turmoil, the OCC encouraged national banks to work constructively 

with borrowers who may be facing financial difficulty and to extend credit in a responsible and 

prudent manner. This is especially important to the restoration of a healthy financial sector that 

can support the credit needs vital to the nation’s economy. 

 Small Business Lending - To help promote increased small business lending, the OCC and 

other federal banking agencies partnered with the Small Business Administration (SBA) and 

held seminars for bankers on small business lending issues and the SBA’s loan programs. In 

February 2010, the OCC and other banking agencies issued an interagency statement on 
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meeting the credit needs of creditworthy small business borrowers. The statement reiterates 

the agencies’ policy that financial institutions that engage in prudent small business lending 

after performing a comprehensive review of a borrower’s financial condition will not be 

subject to criticism for loans made on that basis. 

The OCC is also working with Treasury and the other federal banking agencies to implement 

the provisions of the Small Business Lending Fund (SBLF) pursuant to the Small Business 

Jobs Act of 2010. As mandated by the statute, the OCC and other banking agencies have 

issued guidance regarding prudent underwriting standards for small business loans that 

participating institutions make with SBLF funds. 

To improve the agencies’ ability to monitor the credit available to households and businesses, 

the OCC and other federal banking agencies made several changes to the information that 

banks and thrifts must report in their Consolidated Reports of Condition and Income (Call 

Reports) and Thrift Financial Reports (TFR). Effective with their March 2010 filings, 

institutions began reporting small business loan data on a quarterly, rather than annual basis. 

Institutions with $300 million or more in total assets or unused credit card commitments also 

are providing separately the amount of unused credit card lines for consumers and for other 

credit card borrowers. Additional breakdowns of other unused loan commitments also are 

being collected. This information will allow the agencies to better monitor credit flows 

throughout a business cycle. 

 Residential Mortgage Modifications and CRE Loan Work Outs - The OCC also worked 

closely with Treasury on its various mortgage modification programs and efforts to help 

homeowners facing financial difficulty. The OCC provided technical assistance on program 

design and implementation and encouraged national banks to participate in those programs.

In an effort to make key aspects of mortgage loan data more transparent and publicly 

available, the OCC and OTS in September 2008 began to publish joint quarterly reports on 

loan performance, delinquencies and foreclosures. The “Mortgage Metrics Report” presents 

data from eight national banks and one thrift with the largest mortgage portfolios (about 65

percent of all mortgages in the country) and can be used by examiners to assess emerging 

trends, evaluate asset quality and loan loss reserve needs, identify anomalies, and evaluate 

loss mitigation actions. In early 2009, Congress adopted the Helping Families Save Their 

Homes Act of 2009. Section 104 of this Act requires the OCC and OTS to submit the 

Mortgage Metrics Report to Congress on a quarterly basis and specifically requires 

information relating to the number of mortgage modifications made, the number of these that 

resulted in lower payments, and the number of modified mortgages that went into default 

again. The Dodd-Frank Act amended Section 104 of the Helping Families Save Their 

Homes Act of 2009 to require the OCC and OTS to provide Mortgage Metrics data to 

Congress broken down by state.

In response to the growing number of residential mortgage modifications and CRE workouts, in FY 2010 the OCC provided additional supervisory guidance on accounting and 

classification issues associated with such activities. The OCC supervisory guidance to 

examiners on residential mortgage modifications stressed that the OCC expects mortgage 

modifications to be undertaken in a manner that improves the likelihood that a borrower can 
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repay the restructured credit under the modified terms and in accordance with a reasonable 

repayment schedule. In October 2009, the OCC and other banking agencies issued a joint 

policy statement on prudent CRE workout programs. The statement is intended to promote 

supervisory consistency, enhance the transparency of CRE workout transactions, and ensure 

that supervisory policies and actions do not inadvertently curtail the availability of credit to 

creditworthy borrowers. The statement includes a variety of examples to illustrate how 

examiners will apply the principles outlined in the guidance. The agencies hosted a seminar 

for the banking industry on the guidance in December 2009.

Restoring Financial Stability, Enhancing Risk Management Practices, and Strengthening 

Prudential Supervision

The OCC continues to actively support the administration’s efforts to restore stability to the U.S. 

financial sector and overall economy. The OCC is also working closely with other domestic and 

international supervisors, including the newly formed Financial Stability Oversight Council 

(FSOC), the Basel Committee on Banking Supervision, the Financial Stability Board (FSB) and 

the Senior Supervisors’ Group (SSG), to identify and coordinate actions aimed at both restoring 

functioning markets and strengthening risk management practices. 

Key initiatives related to these efforts are: 

 Enhanced Liquidity Risk Management and Liquidity Buffers - Failure to maintain adequate 

liquidity was a significant factor contributing to the turmoil in 2008, highlighting the 

importance of liquidity risk management for the safety and soundness of financial 

institutions. In March 2010, the OCC along with the Federal Financial Institutions 

Examination Council (FFIEC) member agencies and the Conference of State Banking 

Supervisors issued Interagency Guidance on Funding and Liquidity Risk Management. 

This summarizes the principles of sound liquidity risk management issued in previous 

guidance, and brings them into conformity with the Principles for Sound Liquidity Risk 

Management and Supervision, issued by the Basel Committee on Banking Supervision in 

September 2008. The guidance emphasizes the central elements of liquidity risk 

management, including the importance of cash flow projections, diversified funding sources, 

stress testing, a cushion of liquid assets, and a formal, well-developed contingency funding 

plan for measuring, monitoring, and managing liquidity risk.

In December 2009, the Basel Committee issued a proposed international framework for 

liquidity risk measurement that would, among other things, establish minimum liquidity 

standards for internationally active banks, a 30-day liquidity coverage ratio requirement 

underpinned by a longer-term structural liquidity ratio. In September 2010, the Group of 

Governors and Heads of Supervision, the oversight body of the Basel Committee, announced 

that after an observation period beginning in 2011, the liquidity coverage ratio will be 

introduced in 2015. The longer-term structural liquidity ratio will become a minimum 

standard in 2018. 

 Enhanced Capital Standards - The financial crisis highlighted areas where the current Basel 

II capital framework requires strengthening. The OCC, with other Basel Committee 

members, provided recommendations for revisions, which were finalized and approved by 
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the Basel Committee in July 2009. The enhancements also require that banks conduct more 

rigorous credit analyses of externally rated securitization exposures. The Basel Committee 

also announced substantial revisions to the 1996 rules governing the capital required for 

trading activities. These changes will result in higher capital requirements to capture the 

credit risk of complex trading activities. The OCC and other federal banking agencies are

evaluating how to move forward with the implementation of these proposals and a proposed 

Basel II standardized approach for U.S. banking companies. This enhances the risk 

sensitivity of the current Basel I capital requirements that applies to most U.S. financial 

institutions to address provisions of the Dodd-Frank Act that prohibit the use of credit ratings 

in the agencies’ regulations. The agencies anticipate issuing notices of proposed rulemakings 

on these proposals in 2011. 

In December 2009, the Basel Committee issued proposals to further enhance the level and 

quality of capital held by banking institutions. The proposals would strengthen capital by: 

1) establishing capital buffers that can be drawn down in periods of stress; 2) strengthening

the quality of bank capital; and 3) introducing a leverage ratio for countries that currently do 

not have a leverage-based capital ratio. The Group of Governors and Heads of Supervision 

announced final agreements on these proposals in September 2010. These heightened capital 

standards will be phased in, with full implementation to be effective on January 2019. 

 Correspondent Banking Concentrations - In April 2010, the OCC and other federal banking 

agencies issued guidance to address risks associated with funding and credit concentrations 

arising from correspondent relationships. The guidance outlines the agencies’ expectations 

for financial institutions with respect to identifying, monitoring, and managing correspondent 

concentration risks between financial institutions, as well as performing appropriate due 

diligence on credit exposures to, and funding transactions with, other financial institutions. 

 Interest Rate Risk - In January 2010, the OCC, the other federal banking agencies, and the 

Conference of State Bank Supervisors issued a joint advisory to remind institutions of 

supervisory expectations regarding sound practices for managing interest rate risk. In the 

current environment of historically low short-term interest rates, it is important for 

institutions to have robust processes for measuring and, where necessary, mitigating the 

exposure to unexpected or substantial increases in interest rates.

 Incentive Compensation Structures - In FY 2010, the OCC participated with the FRB in a 

horizontal review of incentive compensation structures and practices across the largest 

financial institutions. Follow up work is being conducted by the agencies’ examination 

teams and will continue in FY 2011. As announced in June 2010, the OCC along with the 

FRB, the FDIC, and OTS has issued guidance on incentive compensation policies to ensure 

that such practices take into account risk and are consistent with safe and sound practices. 

The guidance directs that incentive compensation arrangements at a banking organization 

comply with the following principles:

1. Provide employees incentives that appropriately balance risk and reward;

2. Be compatible with effective controls and risk management; and 
OCC - 13

3. Be supported by strong corporate governance, including active and effective oversight by 

the organization’s board of directors.

The OCC is also working with the other federal financial agencies to implement section 956 

of the Dodd-Frank Act that requires disclosure and reporting of incentive-based 

compensation arrangements by covered financial institutions and prohibits incentive-based 

compensation arrangements that are excessive or that could expose institutions to 

inappropriate risks that could lead to a material financial loss. 

 Addressing Off-Balance Sheet Risks - In January 2010, the OCC and other federal banking 

agencies amended their risk based capital rules to eliminate the exclusion of certain 

consolidated asset-backed commercial paper programs from risk-weighted assets and to 

permit the agencies to require banking organizations to treat entities that are not consolidated 

under accounting standards as if they were consolidated for risk-based capital purposes. This 

rule is in response to changes in the accounting for certain off-balance sheet structures that 

went into effect in January 2010. In response to public comments about continued 

uncertainty regarding the scope of these accounting changes and the potential impact the rule 

could have on credit availability, the agencies provided a transition process for the full 

implementation of this rule. 

As previously noted, the OCC is working with the other federal financial agencies to 

implement the various provisions of the Dodd-Frank Act related to proprietary trading and 

various off-balance sheet instruments and activities.

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

continue to work closely with the SEC and the Financial Accounting Standards Board 

(FASB) and the International Accounting Standards Board (IASB) on various accounting and 

disclosure issues and proposals. Under Comptroller Dugan’s chairmanship of the Financial 

Stability Board’s Working Group on Provisioning, the OCC has also been actively involved 

with banking supervisors and accounting standard setters world-wide to ensure that banks 

have the ability to strengthen their loan loss reserves at an appropriate time in the credit 

cycle, as their potential future loan losses are increasing. 

A major issue that the OCC has been closely monitoring is the FASB’s Exposure Draft on 

Financial Instruments. The OCC is particularly concerned about expansion of fair value to 

bank loan portfolios and the resulting volatility this could create on bank balance sheet 

positions, and their capital and funding requirements. One of the lessons learned from the 

crisis was the lack of reliability and relevance of fair value measurements. The OCC 

organized a series of outreach meetings with investors to explore the potential implications of 

the FASB’s proposal, and worked with the other federal banking agencies to submit 

comments to the FASB on the proposal. 

Resolving Problem Banks 

The goal of the OCC’s supervision is to identify and correct potential issues at an early stage, 

before they adversely affect the safety and soundness of the banking system or the viability of an 

individual bank. Despite these efforts, given current market conditions, the OCC expects to see 
OCC - 14

an increase in problem banks that will require more in-depth supervisory attention. As a bank 

reaches this stage, the OCC’s efforts focus on developing a specific plan that takes into 

consideration the ability and willingness of management and the board of directors to correct 

deficiencies in a timely manner and return the bank to a safe and sound condition. In most 

instances these efforts, coupled with the commitment of bank management, result in a successful 

rehabilitation of the bank. 

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

examination program. However, when problems are serious and well-documented, enforcement 

action may be warranted to address violations of laws, rules, and regulations; unsafe or unsound 

banking practices and breaches of fiduciary duty; and noncompliance with the OCC directives or 

orders by national banks, their insiders, and other affiliated parties. 

The OCC has a variety of tools to deal with the industry-wide increase in problems and troubled 

institutions in FY 2010, including statutory Prompt Corrective Action determinations when a 

bank’s capital deteriorates below specified thresholds, requirements for increased capital and 

liquidity sources, required changes in bank management, and prior OCC approval of changes in 

business plans. 

In addressing mismanagement during FY 2010, the OCC took such formal enforcement actions 

as final cease and desist orders, removal or prohibition orders, Civil Money Penalties, and formal 

agreements. Documents relating to the OCC enforcement actions can be found on the OCC’s 

Web site at (www.occ.gov).

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

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

FDIC may be appointed as receiver. The OCC works closely with the FDIC in these cases to 

affect least cost resolution, consistent with the provisions of the Federal Deposit Insurance 

Corporation Improvement Act. In FY 2010, 30 national banks failed where the OCC appointed 

the FDIC as receiver. It is likely that there will be additional failures during FY 2011. 

Bank Secrecy Act/Anti-Money Laundering (BSA/AML) 

Through on-site examination activities, the OCC examiners evaluate banks’ compliance with 

BSA/AML requirements and, where weaknesses are noted, seek corrective action. The OCC has 

also developed a Money Laundering Risk System (MLRS) that provides the national community 

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

enhances the OCC’s effectiveness in BSA/AML supervision. In March 2010, the OCC along 

with the other federal banking agencies, FinCEN, SEC, and Commodity Futures Trading 

Commission (CFTC) issued interagency guidance on obtaining and retaining beneficial 

ownership information. The guidance clarifies and consolidates existing regulatory expectations 

for financial institutions obtaining beneficial ownership information for certain accounts and 

customer relationships. The OCC and other FFIEC member agencies issued the revised FFIEC 

BSA/AML Examination manual in April 2010 to incorporate regulatory changes and new 

supervisory guidance.
OCC - 15

Fair Access to Financial Services and Fair Treatment of Bank Customers 

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

customers through its ongoing supervisory programs for national banks and their operating 

subsidiaries. These programs include ongoing supervisory examinations to ensure compliance 

with fair lending laws, the CRA, section 5 of the Federal Trade Commission Act (prohibiting 

unfair or deceptive acts and practices), and other consumer laws and regulations. In addition to 

supervisory activities, the OCC issues guidance and handbooks, and offers training to bankers 

and bank directors to help them understand and meet their compliance and CRA obligations. 

The Dodd-Frank Act requires that certain functions of the OCC relating to consumer protection 

and fair lending be transferred to the CFPB. The OCC is committed to work with the CFPB to 

ensure a smooth transition of any transfer of functions or personnel. 

Fair Lending 

The OCC’s fair lending supervisory process is designed to assess and monitor the level of fair 

lending risk in every national bank. The OCC assesses compliance with fair lending laws and 

regulations; obtains corrective action when significant weaknesses or deficiencies are found in a 

bank’s policies, procedures, and controls relating to fair lending; and ensures enforcement action 

is taken when warranted. This includes referrals to the DOJ and notifications to the HUD.

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

by encouraging national banks to work with consumers, supporting private and public sector 

initiatives and programs that seek to assist these borrowers, and collecting and analyzing 

extensive mortgage lending and workout data from the largest national banks. In January 2010, 

the OCC updated its Fair Lending examination handbook to more effectively address disparate 

treatment in loan pricing, broker activity redlining, and steering borrowers to higher cost loans. 

These updates were coordinated with the other federal banking agencies. 

Community Development

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

community development activities and processes community development investment notices 

and proposals under title 12, Code of Federal Regulations Part 24. The OCC was a co-sponsor 

of the 2010 National Interagency Community Reinvestment Conference. During FY 2010, 

national banks made $6.2 billion in community development investments. 

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. During FY 2010, 

the OCC identified and publicized strategies for stabilizing communities affected by foreclosure 

and resulting property vacancies, and continued its support of financial literacy programs. The 

agency issued publications and partnered with the SBA to promote bank involvement in 

economic stimulus and recovery measures.
OCC - 16

Consumer Protection

During FY 2010, the OCC continued its work with the other federal banking agencies to improve 

consumer protection. These efforts included an interagency initiative to design and test a 

financial privacy notice that is clear and that consumers can better understand and use to exercise 

their preferences for information sharing. After conducting both quantitative and qualitative 

consumer research, the OCC and other federal agencies (including the CFTC, FTC, and SEC)

finalized model privacy notice forms. In November 2009, the forms were provided to the 

industry through amendments to the rules that implement the financial privacy requirements of 

the Gramm-Leach-Bliley Act. In April 2010, the eight federal regulators released an Online 

Form Builder that financial institutions can download and use to develop and print customized 

versions of a model consumer privacy notice. 

In December 2009, the OCC and other federal banking agencies issued for public comment 

proposed supervisory guidance on managing consumer compliance and reputation issues 

involved with reverse mortgages. The guidance discusses legal questions raised by reverse 

mortgages, stresses the need to provide adequate information to consumers about these products, 

to provide qualified independent counseling to consumers considering them, and to avoid 

potential conflicts of interest. The guidance also addresses related policies, procedures, internal 

controls, and third party risk management. The final guidance was issued on August 16, 2010. 

Effective with the December 31, 2010, Call Report and TFR filings, financial institutions will be 

required to provide information on the volume of reverse mortgages that they hold or have 

originated and sold during the year and on the volume of referrals they made to other lenders for 

a fee for such products.

The OCC is leading the interagency effort to implement the registration requirements of the 

Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (S.A.F.E. Act). In July 2010, 

the agencies issued a joint final rule that establishes the registration requirements for mortgage 

loan originators employed by agency-regulated institutions as well as requirements for these 

institutions, including the adoption of policies and procedures to ensure compliance with the 

S.A.F.E Act and final rule. As required by the law, the final rule also requires these mortgage 

loan originators to obtain a unique identifier through the Nationwide Mortgage Licensing System 

and Registry (Registry) that will remain with that originator, regardless of changes in 

employment. When the system is fully operational, consumers will be able to use the unique 

identifiers to access employment and other background information of registered mortgage loan 

originators. Substantial progress has been made in modifying the Registry to accommodate the 

registration of employees of agency-regulated institutions. The Registry is expected to be 

capable of accepting these and federal registrations in January 2011 at the earliest. The DoddFrank Act will transfer the agencies’ responsibilities under the S.A.F.E. Act to the CFPB on a 

transfer date that is no earlier than January 2011 and, subject to a six-month extension, no later 

than July 2011.

The OCC also worked with the other federal banking agencies to develop and issue examination 

procedures related to the Unlawful Internet Gambling Enforcement Act of 2006 and the 

Protecting Tenants at Foreclosure Act of 2009. 
OCC - 17

In addition to these interagency efforts, in FY 2010 the OCC issued guidance on consumer 

protection and safety and soundness issues associated with tax refund anticipation loans, and 

guidance to national banks on complying with provisions of the new opt-in requirements relating 

to overdraft protection programs and provisions of the Credit CARD Act of 2009.

Enforcement

As needed, the OCC uses its enforcement authority to address safety and soundness violations 

and noncompliance with laws and regulations. During FY 2010, the OCC issued 364 

enforcement actions against national banks and 236 against institution-affiliated parties. 

The OCC assessed a $50 million Civil Money Penalty against a national bank for violations of 

the Bank Secrecy Act as part of a coordinated action with the DOJ, FinCEN and other federal 

agencies. The bank also agreed to forfeit $110 million to the U.S. under a deferred prosecution 

agreement with the U.S Attorney’s Office in the Southern District of Florida and the DOJ. The 

OCC also entered into a Formal Agreement with a national bank to reimburse consumers harmed 

by the bank’s credit card account closing practices. Agreed-upon reimbursement totaled 

$775,000. In another action, a national bank was directed to make $5.1 million in restitution to 

over 60,000 consumers adversely affected by its relationships with a third party payment 

processor. The bank also received a $100,000 civil money penalty. 

The OCC expects the level of enforcement actions associated with problem banks and bank 

failures to continue through the next fiscal year. 

Regulatory Activities

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

framework that enables the national banking system to provide a full, competitive array of 

financial services. The agency devoted a significant amount of resources in FY 2010 to 

performing analysis of and providing technical assistance for legislative proposals to reform the 

U.S. financial regulatory structure. 

The OCC and other financial regulatory agencies issued a final rule providing that mortgage 

loans modified under the U.S. Department of the Treasury’s Home Affordable Mortgage 

Program generally will retain the risk-based capital risk weight appropriate to the loan prior to 

modification. Mortgages in the trial period also qualify. 

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

banks’ ability to compete while maintaining safety and soundness. The OCC will continue its 

legal work of analysis and interpretation of national bank powers and authorities during FY 

2011. This work will be carried forward to include the thrift industry when OCC assumes OTS’s

functions relating to Federal savings associations in accordance with the Dodd-Frank Act. The 

FY 2010 determinations included confirming that a national bank may purchase and hold auction 

rate preferred securities for its own account subject to certain representations and conditions. 

The OCC issued its calendar year publication, “2009 Significant Legal, Licensing, and 

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

edition of “Permissible Activities for a National Bank.” The OCC will also continue to provide 
OCC - 18

case-by-case analysis, consistent with the law and as appropriate, with respect to the enforcement 

of state law in cases involving national banks and their subsidiaries. 

Charter Activities 

For the first half of FY 2010, the OCC issued 1,344 corporate licensing decisions, with a 96

percent on time rate. Bank branch and relocation application volume declined somewhat 

compared to the same period in the prior year. In order to address potential safety and soundness 

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

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

FY 2010, the OCC responded quickly and effectively in reviewing and making decisions on 

applications related to resolving problem conditions. Proposed restructurings that may avoid 

bank failures and their associated costs can include mergers, purchases and assumptions, and 

temporary bridge banks.

In FY 2010, the agency continued conditional approvals of “shelf charters” to expand the pool of 

qualified bidders for troubled institutions. The relatively new mechanism involves the granting 

of preliminary approval to investors for a national bank charter. A shelf charter remains inactive 

until an investor group holding the charter is in a position to acquire a troubled institution. This 

process expands the pool of potential buyers available to purchase troubled institutions. In 

January of 2010, the OCC approved the first use of a shelf charter for the acquisition of a failed 

bank, and in July, a shelf charter was used to acquire three failed banks.

1C – Industry Outlook

Turmoil in the financial markets, the mortgage and foreclosure crises, and the long and deep 

recession has added to the challenges facing the banking system. Past experience suggests that 

growth in the banking system is likely to be slow in the immediate aftermath of the recession, but 

that it will increase later in the cycle. Further, the long-term trend of bank consolidation is likely 

to continue and will accelerate in the near term, as the credit cycle culls out weaker performers.

If bank assets continue to grow at the rate of nominal Gross Domestic Product (GDP), and if 

GDP growth returns to its historical average over the next five years, assets could grow and the 

number of banks could shrink, as shown in the following table (1).

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

2009 11.8 6,939 8.2 1,462 82.1%

2014 (2) 15.1 6,400 10.5 1,100 85.0%

in Banks over $10 Billion

Commercial Banks National Banks Share of Total System Assets

 (1) This table does not include assets currently supervised by the OTS.

 (2) Estimated.

But the depth, breadth, and duration of this downturn suggests that over the next year or two, 

bank assets and loans could grow more slowly than before the recession. The combination of 

recession and financial crisis has already caused widespread deleveraging among both 

households and firms. Moreover, corporations are likely to be able to fund more of their 

operations from internal cash flow, dampening growth in business lending. Most observers

expect this to continue, reducing the rate of credit growth throughout the economy. This could 
OCC - 19

limit the pace of bank lending and asset growth as the economy begins to recover, as happened 

after the 1990-91 recession. 

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

account for over 80 percent of commercial bank system assets; this share has been increasing, 

and the trend is expected to continue. The financial crisis could increase consolidation among 

these large banks, thinning their ranks from the 87 that exist now. Until about six years ago, 

national banks consistently accounted for about 56 percent of all commercial bank assets. Since 

then, a series of mergers and conversions have increased the national bank share to 

approximately 70 percent of commercial bank assets. The OCC’s projections assume that share 

remains steady over the next five years.

Risks to the banking system include continued problems in the credit markets, and a slow 

recovery from the recession.
OCC - 20

Section 2 – Budget Adjustments and Appropriation Language

2.1 – Budget Adjustments Table

Dollars in Thousands

Office of Comptroller of the Currency FTE Amount

FY 2010 Actual 3,101 $740,423

FY 2011 Estimated 3,140 $814,479

Changes to Base:

Maintaining Current Levels (MCLs): - $4,564

Maintaining Current Levels - $4,564

Subtotal FY 2012 Changes to Base - $4,564

Total FY 2012 Base 3,140 $819,043

Program Changes:

Program Increases: 836 $221,713

Adjustment 836 $221,713

Subtotal FY 2012 Program Changes 836 $221,713

Total FY 2012 Estimated 3,976 $1,040,756

2A – Budget Increases and Decreases Description

Maintaining Current Levels (MCLs) ......................................................+$4,564,000 / +0 FTE

Maintaining Current Levels +$4,564,000 / +0 FTE Funds are required for inflation adjustments 

in non-labor expenses such as GSA rent adjustments, postage, supplies and equipment and health 

benefits and the increase in Federal Employee Retirement System participation. No inflation 

adjustment is requested for pay in FY 2012.

Program Increases ............................................................................+$221,713,000 / +836 FTE

Adjustment +$221,713,000 / +836 FTE Includes regulation of the National Banking System and 

Federal Savings Associations. This estimate is subject to revision once the personnel 

realignment or the Dodd-Frank Act are implemented.
OCC - 21

2.2 – Operating Levels Table

Dollars in Thousands

Office of Comptroller of the Currency FY 2010 Obligated FY 2011 Estimated 1/ FY 2012 Estimated 2/

FTE 3,101 3,140 3,976

Object Classification

11.1 - Full-time permanent $361,693 $372,600 $519,857

11.3 - Other than full-time permanent $9,799 $0 $0

11.5 - Other personnel compensation $1,938 $2,102 $3,138

12 - Personnel benefits $133,668 $147,091 $188,377

13 - Benefits for former personnel $103 $195 $0

21 - Travel and transportation of 

persons $46,821 $53,776 $67,374

22 - Transportation of things $2,663 $1,838 $3,743

23.1 - Rental payments to GSA $2,668 $2,743 $3,750

23.2 - Rental payments to others $37,470 $39,903 $52,669

23.3 - Communication, utilities, and 

misc charges $10,844 $9,004 $15,243

24 - Printing and reproduction $802 $831 $1,127

25.1 - Advisory and assistance 

services $26,369 $27,277 $37,065

25.2 - Other services $15,916 $50,713 $22,372

25.3 - Other purchases of goods and 

services from Govt. accounts $6,331 $10,428 $8,899

25.4 - Operation and maintenance of 

facilities $4,634 $5,949 $6,514

25.7 - Operation and maintenance of 

equip $52,363 $61,762 $73,603

26 - Supplies and materials $5,173 $11,118 $7,271

31 - Equipment $16,726 $13,903 $23,510

32 - Land and structures $4,311 $3,016 $6,060

42 - Insurance claims and indemnities $131 $230 $184

Total Budget Authority $740,423 $814,479 $1,040,756

Budget Activities

Supervise $618,254 $680,090 $900,836

Regulate $97,735 $107,511 $111,936

Charter $24,434 $26,878 $27,984

Total Budget Authority $740,423 $814,479 $1,040,756

1) It is anticipated that for the majority of FY 2011, the OCC will not be regulating the Federal savings associations; 

accordingly, the FY 2011 estimates only reflect the cost of regulating the National Banking System. Figures are subject to 

revision once the personnel realignment provisions of the Dodd-Frank Act are implemented.

(2) FY 2012 estimates include the cost of regulating the National Banking System and Federal savings associations. Figures 

are subject to revision once the personnel realignment provisions of the Dodd-Frank Act are implemented.
OCC - 22

2.3 – Resource Detail Table

Dollars in Thousands

1) It is anticipated that for the majority of FY 2011, the OCC will not be regulating the Federal savings associations; 

accordingly, the FY 2011 estimates only reflect the cost of regulating the National Banking System. Figures are subject to 

revision once the personnel realignment provisions of the Dodd-Frank Act are implemented.

(2) FY 2012 estimates include the cost of regulating the National Banking System and Federal savings associations. Figures

are subject to revision once the personnel realignment provisions of the Dodd-Frank Act are implemented.

2B – Appropriations Language and Explanation of Changes 

The OCC receives no appropriations from Congress.

2C – Legislative Proposals

OCC currently has no legislative proposals.

FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT

Budgetary Resources:

Revenue / Offsetting Collections

Assessments $764,410 $795,300 $1,011,100 27.13%

Interest $20,502 $23,700 $24,275 2.43%

Other Income 1,805 1,200 7,425 518.75%

Total Revenue / Offsetting Collections 0 $786,717 0 $820,200 0 $1,042,800 0.00% 27.14%

 Unobligated balances, Start of year 793,371 847,259 864,204 2.00%

 Recoveries of prior year obligations 0 0 0 0.00%

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

Total budgetary resources available 0 $1,580,088 0 $1,667,459 0 $1,907,004 0.00% 14.37%

Expenses/Obligations

Supervision 2,700 621,695 2,729 680,090 3,412 900,836 1.07% 32.46%

Regulate 329 98,279 337 107,511 463 111,936 2.43% 4.12%

Charter 72 24,570 74 26,878 101 27,894 2.78% 3.78%

Total Expenses / Obligations 3,101 $744,544 3,140 $814,479 3,976 $1,040,666 26.62% 27.77%

FY 2011 FY 2012 Estimated FY 2011

Actual Estimated (1) (2) to FY 2012

% Change

FY 2010
OCC - 23

Section 3 – Budget and Performance Plan

This table lists all FY 2012 resources by strategic goal, objective and outcome outlined in the FY 

2007-2012 Treasury Department Strategic Plan. The Treasury Strategic Plan 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/about/budget-performance/strategic-plan/Pages/index.aspx

3.1 – Budget by Strategic Outcome

Dollars in Thousands

Treasury Strategic Outcome FY 2010 

Actual

FY 2011 

Estimated 1/

FY 2012 

Estimated 2/

% Change

FY10 to FY12

 Strong U.S. economic competitiveness 79,384 134,389 356,102 164.98%

 Prevented or mitigated financial and economic crises 661,039 680,090 684,654 0.67%

Total $740,423 $814,479 $1,040,756 27.78%

1) It is anticipated that for the majority of FY 2011, the OCC will not be regulating the Federal savings associations; 

accordingly, the FY 2011 estimates only reflect the cost of regulating the National Banking System. Figures are subject to 

revision once the personnel realignment provisions of the Dodd-Frank Act are implemented.

(2) FY 2012 estimates include the cost of regulating the National Banking System and Federal savings associations. Figures

are subject to revision once the personnel realignment provisions of the Dodd-Frank Act are implemented.

3A - Supervise ($680,090,000 from reimbursable programs): The Supervise program consists 

of 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.
OCC - 24

3.2.1 Supervise Budget and Performance Plan

Supervise Budget Activity

Resource Level FY 2008 FY 2009 FY 2010 FY 2011 FY 2012

Actual Actual Actual Estimated 1/ Estimated 2/

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

 Reimbursable Resources $565,921 $597,859 $618,254 $680,090 $900,836

Total Resources $565,921 $597,859 $618,254 $680,090 $900,836

Budget Activity Total $565,921 $597,859 $618,254 $680,090 $900,836

Measure FY 2008 FY 2009 FY 2010 FY 2011 FY 2012

Actual Actual Actual Target Target 3/

Percent of National Banks With Composite CAMELS Rating 1 or 2 

(Oe)

92.0 82.0 70.0 90.0 90.0

Percentage of National Banks that are Categorized as Well 

Capitalized (Oe)

99.0 86.0 90.0 95.0 95.0

Percentage of National Banks with Consumer Compliance Rating of 

1 or 2 (Oe)

97.0 97.0 95.0 94.0 94.0

Rehabilitated National Banks as a Percentage of Problem National 

Banks One Year Ago (CAMEL 3,4, or 5) (Oe)

47.0 29.0 23.0 40.0 40.0

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

Regulated ($) (E)

8.39 8.81 9.28 9.22 9.22

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

Discontinued, and B - Baseline

1) It is anticipated that for the majority of FY 2011, the OCC will not be regulating the Federal savings associations; 

accordingly, the FY 2011 estimates only reflect the cost of regulating the National Banking System. Figures are subject to 

revision once the personnel realignment provisions of the Dodd-Frank Act are implemented.

(2) FY 2012 estimates include the cost of regulating the National Banking System and Federal savings associations. Figures 

are subject to revision once the personnel realignment provisions of the Dodd-Frank Act are implemented.

(3) FY 2012 targets are subject to revision based on the impact of integrating OTS functions relating to Federal savings 

associations into the OCC and the transfer of designated OCC functions to the CFPB.

Well Capitalized National Banks

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

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

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

relative to their risks. Through September 30, 2010, 90 percent of national banks were classified 

as well capitalized. 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.
OCC - 25

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, 2010, 70 percent of national 

banks earned composite CAMELS ratings 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. The OCC’s primary 

focus is to ensure that CAMELS ratings are an accurate reflection of each bank's current 

financial position and thus the OCC would not take action to prematurely restore a favorable 

CAMELS rating even though the current distribution of ratings is below our target. As bank 

performance and asset quality improves, the OCC would expect CAMELS ratings to adjust 

accordingly.

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. Through September 30, 2010, 23 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.

National Banks with Consumer Compliance Rating of 1 or 2

To ensure fair access to financial services and fair treatment of bank customers, the OCC 

evaluates a bank’s compliance with consumer laws and regulations. Bank regulatory agencies 

use the Uniform Financial Institutions Rating System, Interagency Consumer Compliance 

Rating, to provide a general framework for assimilating and evaluating significant consumer 

compliance factors inherent in a bank. Each bank is assigned a consumer compliance rating 

based on an evaluation of its present compliance with consumer protection and civil rights 

statutes and regulations, and the adequacy of its operating systems designed to ensure continuing 

compliance. Ratings are on a scale of 1 through 5 in increasing order of supervisory concern. 

National banks continue to show strong compliance with consumer protection regulations with 

95 percent earning a consumer compliance rating of either 1 or 2 through September 30, 2010.

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. The 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 
OCC - 26

Reports of Condition and Income. Total national 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 national banking system benefits all national bank customers.

3B - Regulate ($107,511,000 from reimbursable programs): 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. 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

Resource Level FY 2008 FY 2009 FY 2010 FY 2011 FY 2012

Actual Actual Actual Estimated 1/ Estimated 2/

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

 Reimbursable Resources $87,583 $94,511 $97,735 $107,511 $111,936

Total Resources $87,583 $94,511 $97,735 $107,511 $111,936

Budget Activity Total $87,583 $94,511 $97,735 $107,511 $111,936

1) It is anticipated that for the majority of FY 2011, the OCC will not be regulating the Federal savings associations; 

accordingly, the FY 2011 estimates only reflect the cost of regulating the National Banking System. Figures are subject to 

revision once the personnel realignment provisions of the Dodd-Frank Act are implemented.

(2) FY 2012 estimates include the cost of regulating the National Banking System and Federal savings associations. Figures

are subject to revision once the personnel realignment provisions of the Dodd-Frank Act are implemented.

There are no measures are specified at this time. 

3C - Charter ($26,878,000 from reimbursable programs): 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. 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.
OCC - 27

3.2.3 Charter Budget and Performance Plan

Charter Budget Activity

Resource Level FY 2008 FY 2009 FY 2010 FY 2011 FY 2012

Actual Actual Actual Estimated 1/ Estimated 2/

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

 Reimbursable Resources $20,212 $23,628 $24,434 $26,878 $27,984

Total Resources $20,212 $23,628 $24,434 $26,878 $27,984

Budget Activity Total $20,212 $23,628 $24,434 $26,878 $27,984

Measure FY 2008 FY 2009 FY 2010 FY 2011 FY 2012

Actual Actual Actual Target Target

Percentage of Licensing Applications and Notices Completed within 

Established Timeframes (Oe)

95.0 95.0 96.0 95.0 95.0

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

Discontinued, and B - Baseline

1) It is anticipated that for the majority of FY 2011, the OCC will not be regulating the Federal savings associations; 

accordingly, the FY 2011 estimates only reflect the cost of regulating the National Banking System. Figures are subject to 

revision once the personnel realignment provisions of the Dodd-Frank Act are implemented.

(2) FY 2012 estimates include the cost of regulating the National Banking System and Federal savings associations. Figures

are subject to revision once the personnel realignment provisions of the Dodd-Frank Act are implemented.

(3) FY 2012 targets are subject to revision based on the impact of integrating OTS functions relating to Federal savings 

associations into the OCC and the transfer of designated OCC functions to the CFPB.

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, 2010.

For detailed information about each performance measure, including definition, verification and 

validation, please go to: http://www.treasury.gov/offices/management/dcfo/accountabilityreports/
OCC - 28

Section 4 – Supporting Materials

4A – Human Capital Strategy Description

The OCC 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 goal is to align and employ the OCC workforce resources 

consistent with current and projected agency priorities. To help achieve this goal, on an annual 

basis, the OCC identifies business changes and imperatives, and assesses its current staffing 

structure to identify potential recruitment challenges and skill imbalances/gaps. The agency then 

develops strategies to meet these challenges and approve incentives specifically designed to 

address them. Other strategies include: 

1. using all qualified personnel on priority assignments, realizing the increasing dependence 

and need for “fungibility” among and within various disciplines; 

2. using the midsize/community banks area as the primary entry-level recruitment, training, 

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

departments and divisions in the bureau; and 

3. identifying skill gaps and using them to establish recruitment and training priorities as part 

of ongoing strategic staffing discussions.

The OCC has implemented several 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, 911 examiners have been hired, including 82 in FY 2010. While the OCC expects hiring 

generally to continue at current levels, strategies are being reviewed to ensure that the OCC has 

an integrated staffing process that allows supervision resources to be deployed to their highest 

and best use and maximizes staff development opportunities in alignment with the OCC’s 

national priorities. 

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

Chief National Bank Examiner’s office and Large Bank Supervision line of business. The OCC 

has also recognized the challenge of ensuring that it has the skill sets needed now and in the 

future to supervise the increasingly complex array of activities and businesses found in the 

national banking system. As a result, the OCC uses a framework to assess where and when 

specialized skills are needed and to ensure it has the staffing necessary to meet those needs. This 

framework, the Specialty Skills Assessment, allows the OCC to measure gaps in its current skill 

levels in eight critical business areas (Asset Management, Bank Information Technology, Capital 

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

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

process to identify an individual’s specialty skills, and the levels of those skills, which can be 

compared to actual examination resources necessary for the effective supervision of national 

banks. These skill level designations are made on an annual basis. Also, on an annual basis, 

there is a review of the policy to ensure that the criteria used to determine assignment complexity 

and assess examiner skill levels in each specialty remain current and relevant as the industry 

evolves. Assessment results aid examination staffing and recruiting initiatives, and provide 
OCC - 29

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

opportunities to further an individual’s career objectives. 

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

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

compensation reduction to reemploy certain annuitants. The extensive knowledge and superior 

skills reemployed annuitants have developed in specific specialty areas are an invaluable 

resource. Since being granted this authority by the Office of Personnel Management, the OCC 

has reemployed 21 annuitants. In October 2010, the OCC used the government-wide authority to 

extend this program. 

In 2004, the agency focused attention on bringing back to the OCC, diverse talent that had 

separated for reasons other than retirement. These individuals leave the OCC, then return, 

bringing new knowledge, skills and experiences. In 2009, 54 percent of the hires were

“experienced” re-hires, up from 44 percent in 2008. In the last two fiscal years, women and 

minorities accounted for 58 percent of the re-hires, up from 52 percent in FY 2005-2007. 

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 has 

implemented a leadership development program, LeaderTRACK, based on identified 

competencies. The program, which began in FY 2007, offers participants three six-month 

assignments, with significant managerial and supervisory roles, that will develop leadership 

skills rather than prepare them for a specific position. The OCC 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 and benefit programs and 

performance systems that link with organizational goals and mission accomplishment, which 

enables the OCC to recruit and retain critical positions, and reward high performers. The OCC 

operates under a merit-based pay and performance system. Annual across-the-board increases 

are not granted. Salary increases are awarded based on merit to reward employee performance, 

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

OCC’s priorities. 

To assure the agency accomplishes this goal, the OCC is nearing completion of a study of its 

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

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

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

motivating a high-caliber workforce. 

The OCC’s human capital goals for FY 2011 and FY2012 will focus on strategies and initiatives 

to effectively and efficiently transition resources transferring from the OTS to OCC.

The OCC is confident these strategies will address any deficiencies in staffing and skills, 

ensuring its ability to have the right number of people with the right skills to accomplish its 

critical mission.
OCC - 30

4.1 – Summary of IT Resources Table

Dollars in Thousands

Major IT Investments / Funding Source Budget Activity

FY 2009 

Actual

FY 2010 

Actual

% Change 

from FY 2009 

to FY 2010

FY 2011 

Estimated

FY 2012 

Estimated

% Change 

from FY 2010 

to FY 2012

Fiscal Management $1,920 $1,817 -5.4% $1,880 $1,937 6.6%

Subtotal, Major IT Investments

Supervise/Regulate/

Charter $1,920 $1,817 -5.4% $1,880 $1,937 6.6%

$51,718 $49,473 -4.3% $57,442 $59,165 19.6%

Non-Major IT Investments

Supervise/Regulate/

Charter $51,718 $49,473 -4.3% $57,442 $57,442 16.1%

$34,942 $35,623 1.9% $34,316 $35,346 -0.8%

Infrastructure Investments

Supervise/Regulate/

Charter $34,942 $35,623 1.9% $34,316 $35,346 -0.8%

Enterprise Architecture

Supervise/Regulate/

Charter $ 0 0 0 0 0 0

Enterprise Identity and Access Management

Supervise/Regulate/

Charter N/A 0 0 0 0 0

Total IT Investments

Supervise/Regulate/

Charter $88,580 $86,913 -1.9% $93,638 $92,788 6.8%
OCC - 31

4B – Information Technology Strategy

The OCC’s Information Technology (IT) strategic plan is embodied within its 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 2010, the OCC established specific 

IT goals to leverage IT as a strategic business enabler to support the OCC’s strategic goals. 

The IT Strategic plan is implemented through OCC’s capital planning process which ensures that 

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

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

reviewed to leverage opportunities to use existing technology, to capitalize on enterprise 

opportunities as well as ensure there are no redundancies in IT systems that are considered for 

the portfolio. 

The overall strategy to effectively use technology to support the mission, goals, and objectives of 

the agency is enforced by the Investment Review Board (IRB), comprised of business unit and 

IT representatives from across the agency. The IRB makes recommendations to the OCC’s 

Technology and Systems Subcommittee (TSS). Both the IRB and TSS meet regularly to select, 

monitor, and control IT investments. This process ensures that the overall IT strategy has 

adequate funding, resources, and prioritization, and provides risk mitigation for IT investments 

that are not meeting stated cost, time and performance goals. 

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. The OCC employs project 

management methodologies that are based on risk management and mitigation. The risks are 

actively monitored at both IRB and TSS meetings. 

The OCC’s technology strategy in FY 2011 and FY 2012 will include the integration of the OTS 

legacy systems.

FYs 2011-2012 Plans

The OCC has two new major IT initiatives planned in FYs 2011-2012. 

Central Application Tracking System (CATS) - This initiative will significantly improve the 

accuracy, tracking, monitoring, recording, and reporting of the applications and notices by the 

Licensing and Community Affairs Departments. The overall objective is to: 1) develop a 

workflow and business processing system that will provide the ability to electronically capture 

and effectively monitor and report on the processing of applications and notifications filed with 

the Licensing and Community Affairs Departments, and 2) take advantage of innovative 

technologies to create process efficiencies.

Personnel Administration and Security System (PASS) - This initiative will improve and 

automate core personnel security processes, including on-boarding and off-boarding. The PASS 
OCC - 32

initiative will bring the OCC into compliance with audit and Homeland Security Presidential 

Directive 12 (HSPD-12) requirements. 

Homeland Security Presidential Directive-12 (HSPD-12)

In FY 2010, the OCC continued to install and upgrade HSPD-12 compliant Physical Access 

Control Systems (PACS) nationwide. In addition, the OCC continued to phase out existing 

proximity security cards with the goal of transitioning exclusively to HSPD-12 SmartID cards 

for all OCC employees and contractors. The OCC also began to integrate HSPD-12 policy, 

procedures and SmartID card usage into other existing agency processes moving towards full 

HSPD-12 compliance by the established Treasury and Federal milestones.

During FY 2011, the OCC will install 33 new HSPD-12 compliant PACS systems and upgrade 

four non-compliant PACS systems, currently in place at the OCC facilities. In addition to these 

upgrades, the OCC will also start installing systems which will allow the checking and 

verification of personal identity verification (PIV) certificates and the provisioning of PIV cards 

directly into the OCC PACS. The OCC will continue to issue PIV cards to all employee and 

contractor personnel, which will eliminate all agency produced access control cards.

During FY 2012, the OCC will complete all remaining PACS installations and complete the full 

integration of the HSPD-12 program for physical access. One of the major goals is to ensure all 

new employees and contractors receive their PIV card on their first day of work. The OCC has 

taken steps and continues to put procedures in place through existing programs to ensure this 

goal is achieved. The OCC anticipates being able to provide all new employees and contractors 

with an activated PIV card on their first day of employment during FY 2012.