Office of the Comptroller of the 

Currency

FY 2014 

President’s Budget 

Submission
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Table of Contents

Section 1 – Purpose ....................................................................................................................... 3

1A – Mission Statement.............................................................................................................. 3

1.1 – Resource Detail Table........................................................................................................ 3

1B – Vision, Priorities and Context............................................................................................ 3

Section 2 – Budget Adjustments and Appropriation Language............................................. 12

2.2 – Operating Levels Table.................................................................................................... 12

2B – Appropriations Language and Explanation of Changes................................................... 13

2C – Legislative Proposals........................................................................................................ 13

The OCC has no legislative proposals...................................................................................... 13

Section 3 – Budget and Performance Plan ............................................................................... 14

3A – Supervise.......................................................................................................................... 14

3.1.1 – Supervise Budget and Performance Plan...................................................................... 17

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

3.1.2 – Regulate Budget and Performance Plan ....................................................................... 19

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

3.1.2 – Charter Budget and Performance Plan.......................................................................... 20

Section 4 – Supplemental Information...................................................................................... 21

4A – Summary of Capital Investments..................................................................................... 21
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Section 1 – Purpose

1A – Mission Statement

To assure the safety and soundness of, and compliance with laws and regulations, fair access to 

financial services, and fair treatment of customers by national banks and federal savings 

associations.

1.1 – Resource Detail Table

Dollars in Thousands

Office of Comptroller of the Currency FY 2012 FY 2013 FY 2014 Change % Change

Budgetary Resources Actual Estimated Estimated FY 2012 to FY 2014 FY 2012 to FY 2014

FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT FTE AMOUNT

Revenue/Offsetting Collections

Assessments 0963,873 0987,400 01,017,000 053,127 .00 5.51%

Investment Income 015,689 017,200 018,900 03,211 .00 20.47%

Other Income 021,954 018,400 018,800 0(3,154) .00 -14.37%

Unobligated Balances from Prior Years 01,162,804 01,087,200 01,087,200 0(75,604)

.00 -6.50%

Total Budgetary Resources Available 02,164,320 02,110,200 02,141,900 0(22,420)

.00 -1.04%

Expenses/Obligations

Supervise 3,137 924,417 3,265 877,800 3,265 895,350 128 (29,067) 4.08% -3.14%

Regulate 426 125,416 424 119,200 424 121,580 -2 (3,836) -0.47% -3.06%

Charter 93 27,338 93 26,000 93 26,520 0 (818) 0.00% -2.99%

Total Expenses/Obligations 3,656 1,077,171 3,782 1,023,000 3,782 1,043,450 126 (33,721) 3.45% -3.13%

Net Results 01,087,149 01,087,200 01,098,450 1670011,2504.57%.00 1.04%

1B – Vision, Priorities and Context

The Office of the Comptroller of the Currency (OCC) was created by Congress to charter 

national banks, oversee a nationwide system of banking institutions, and ensure national banks 

are safe and sound, competitive and profitable, and capable of serving in the best possible 

manner the banking needs of their customers. Effective on July 21, 2011, Title III of the DoddFrank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), transferred to OCC 

the responsibility for the supervision of federal savings associations and rulemaking authority for 

all savings associations. 

The OCC supervises 1,295 national bank charters, 48 federal branches of foreign banks, and 546

federal savings associations (including 194 mutual institutions) in the United States with total 

assets of approximately $10 trillion as of December 31, 2012. 

The OCC has established four goals outlined in its strategic plan that help support a strong 

economy for the American public: 1) A safe and sound system of national banks and federal 

savings associations; 2) Fair access to financial services and fair treatment of national bank and 

federal savings association customers; 3) A flexible legal and regulatory framework that enables 
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national banks and federal savings associations to provide a full, competitive array of financial 

services consistent with statutory and prudential safety and soundness constraints; and 4) A 

competent, highly motivated, and diverse workforce that makes effective use of OCC resources. 

To achieve its goals and objectives, the OCC organizes its activities under three programs: 1) 

Supervise, 2) Regulate, and 3) Charter. Effective supervision, and a comprehensive regulatory 

framework, are the key tools that the OCC uses to ensure that national banks and federal savings 

associations operate in a safe and sound manner and that they provide fair access to financial 

services and fair treatment of their customers. A robust chartering program allows new entrants

into the financial services sector while ensuring that they have the necessary capital, managerial, 

and risk management processes to conduct activities in a safe and sound manner.

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

jurisdiction through its supervisory and regulatory programs and activities. A stronger and more 

resilient banking system directly supports three out of five of the Department of the Treasury’s 

(Treasury) strategic goals: 1) Repair and reform the financial system and support the recovery of 

the housing market; 2) Enhance U.S. competitiveness and promote international financial 

stability and balanced global growth; and 3) Protect our national security through targeted 

financial actions.

Through on-site examinations, the OCC assesses whether national banks and federal savings 

associations appropriately identify, account for, and follow prudent strategies for problem assets; 

and maintain 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 are identifying and 

resolving potential problem banks at the earliest possible stage; encouraging national banks and 

federal savings associations to meet the needs of creditworthy borrowers, including appropriate 

and effective residential mortgage modification programs; ensuring that institutions comply with 

the Community Reinvestment Act (CRA), the Bank Secrecy Act/Anti-Money Laundering 

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

Required to Intercept and Obstruct Terrorism (USA PATRIOT) Act requirements and that they 

maintain strong controls and risk management processes for information security; and further 

enhancing the OCC’s supervisory analytical tools. 

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

on national banks and federal savings associations. Revenue from investments in Treasury 

securities and other income comprise the remaining three percent of the OCC’s funding. The 

OCC does not receive congressional appropriations to fund any portion of its operations. 

Supervisory Activities

The OCC has various ways to influence the 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 financial institution 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 of law. 
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The OCC supervisory activities in fiscal year (FY) 2012 centered on evaluating and 

strengthening the quality of banks’ risk management to identify, measure, monitor, and control 

the build-up of risk, both on and off-balance sheet. A primary focus of on-site supervisory 

activities was the quality of 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 lenders to work with creditworthy borrowers who may be facing financial difficulties. 

Other areas of emphasis were sound interest rate risk and liquidity risk management, with 

diversified funding sources and realistic contingency funding plans, and strengthening capital 

buffers to address 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 areas of focus, operational risk issues – the risk of loss due to 

failures of people, processes, systems, and external events – have become an area of heightened 

risk and supervisory attention, especially at larger financial institutions. In addition, the OCC 

continues to assess and address supervisory issues in the areas of fair lending, consumer 

protection, BSA/AML, and information security. 

In addition to its ongoing supervisory activities, the OCC undertook the following initiatives in 

FY 2012:

 Integration of Office of Thrift Supervision (OTS) Supervisory Responsibilities: The transfer 

of OTS functions and personnel was successfully completed in July 2011, and the 

examination of federal savings associations has been incorporated into the OCC’s 

supervisory programs. Current integration efforts are now focused on coordinating and 

consolidating the various rules and policies that apply to national banks and federal savings 

associations. As part of this effort, the OCC has undertaken a comprehensive, multi-phased 

review of the OCC and OTS regulations to eliminate duplication and reduce unnecessary 

regulatory burden. The effort to further consolidate rules and policies will continue 

throughout FY 2013.

 Independent Foreclosure Review: On April 13, 2011, the OCC announced formal 

enforcement actions against eight servicers and two third-party servicers for unsafe and 

unsound practices related to residential mortgage loan servicing and foreclosure processing. 

The enforcement actions, among other things, required the servicers to make significant 

improvements in practices for residential mortgage loan servicing and foreclosure 

processing. It also required servicers to engage independent firms to conduct a multi-faceted 

review of foreclosure actions process in 2009 and 2010. That initiative included a process 

for eligible borrowers to request a review of their foreclosure if they believe they suffered 

financial injury as a result of errors on a foreclosure of their primary residence that was in 

process at any point in 2009 or 2010.

In January 2013, the OCC and the Federal Reserve announced a $9.3 billion agreement with 

13 mortgage servicers to terminate the foreclosure reviews for these servicers, pay 4.2 

million eligible borrowers more than $3.6 billion, and provide $5.7 billion in additional 

foreclosure prevention assistance over the next two years. Compensation to borrowers is 

expected to begin in April 2013.
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The Independent Foreclosure Review process continues for two OCC-supervised servicers. 

These reviews are expected to be completed over the remainder of calendar year 2013. The 

OCC also continues to work with other federal regulators to develop a set of comprehensive 

and robust, nationally applicable mortgage servicing standards that would apply to all 

servicers. 

 Enhancing OCC’s Supervision of BSA/AML: Ensuring that national banks and federal 

savings associations have effective BSA/AML programs in place is critical to safeguarding 

our financial systems from money launderers and terrorists. In July 2012, the Comptroller 

announced actions to strengthen and improve the effectiveness of the OCC’s supervisory 

activities in this critical area. These actions include: 1) Fully incorporating BSA/AML 

findings in a safety and soundness context as part of the “management” component of a bank’s 

Capital adequacy, Asset quality, Management, Earnings, Liquidity, and Sensitivity to market risk

(CAMELS) rating. Examiners will presume that serious deficiencies in a bank’s BSA/AML 

compliance area adversely affect a bank’s management component rating; 2) Strengthening the 

OCC’s internal Large Bank BSA Review Team; and 3) Providing more flexibility for citing 

BSA/AML violations, and taking steps to help ensure our examinations obtain a holistic view of 

a bank’s BSA/AML compliance more promptly.

 Strengthening Capital and Liquidity Resiliency: Robust capital and liquidity buffers are 

essential to a resilient banking system. During FY 2012, the OCC took several actions to 

strengthen capital and liquidity standards. In June 2012, the OCC issued guidance on capital 

planning that sets forth the OCC’s expectations for a robust capital planning process and 

factors that OCC examiners will consider when evaluating a bank’s capital planning process 

and overall capital adequacy. That same month, the OCC, Federal Reserve Board (FRB), 

and Federal Deposit Insurance Corporation (FDIC) issued three notices of proposed 

rulemakings that would implement the enhanced capital standards set forth in Basel III and 

the Dodd-Frank Act and issued a final market risk capital rule to better capture the risks 

inherent in trading positions. 

 Strengthening Credit Quality and Credit Risk Management: The OCC took a number of 

steps in FY 2012 to help ensure banks maintain strong underwriting discipline and strong 

credit risk management practices. These activities included the following:

 Guidance on Concentrations of Credit and Analytical Tools for Examiners and Bankers: 

The OCC issued an updated OCC handbook on Concentrations of Credit. This updated 

handbook emphasizes risk management of credit concentrations. These risk management 

practices include portfolio management, stress testing and sensitivity analysis, 

management information systems and other risk management practices. The guidance 

was discussed with the industry on April 12, 2012, via an OCC web and telephone 

seminar. The OCC also developed a stress-testing tool for bankers and examiners for 

income-producing commercial real estate. Rollout of the tool to bankers via the OCC’s 

BankNet was completed in October 2012.

 Interagency Guidance on Leveraged Lending: In March 2012, the OCC, FRB, and FDIC 

issued for comment revised guidelines for leveraged lending activities. The leveraged 
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lending guidance is in process of being finalized and reviewed by senior management at 

all the agencies.

 Annual Underwriting Survey: In June 2012, the OCC issued its annual survey of 

underwriting practices. The survey included 87 of the largest national banks and federal 

savings associations and covers the 12-month period ending February 29, 2012. The 

aggregate total of loans was $4.6 trillion as of December 31, 2011, which represents 

approximately 91 percent of total loans in the federal banking system.

Interim Final Rule on Lending Limits: Pursuant to section 610 of Dodd-Frank, in July 2012 the 

OCC issued an interim final rule amending its lending limit rule to apply to certain credit 

exposures arising from derivative transactions and securities financing transactions. 

Guidance on Stress Testing Practices: In May 2012, the OCC and other federal financial 

regulators issued Supervisory Guidance on Stress Testing for Banking Organizations with Total 

Consolidated Assets of More Than $10 Billion. This guidance outlines high-level principles for 

stress-testing practices, and is applicable to all OCC-supervised, FRB-supervised, and FDICsupervised banking organizations with more than $10 billion in total consolidated assets. The 

agencies also simultaneously issued guidance that community banks and federal savings 

associations with assets of $10 billion or less are not required or expected to conduct the types of 

stress testing articulated in the document. In October 2012, the OCC issued guidance on the use 

of stress testing by community banks and also issued a final rule to implement the Dodd-Frank 

capital stress testing requirements for banks with consolidated assets of more than $10 billion. In 

June 2012, the OCC issued an updated OCC handbook on liquidity risk management that 

incorporates lessons learned from the financial crisis, including the need for appropriate liquidity 

stress testing and contingency funding plans.

Additional Guidance on Troubled Debt Restructuring and Allowance for Loan and Lease Losses: 

The OCC issued additional guidance to address many inquiries received from bankers and 

examiners on the accounting and reporting requirements for Troubled Debt Restructurings 

(TDR), especially related to loan renewals and extensions of substandard commercial loans. The 

guidance focused on factors to consider when evaluating loans for TDR designation and 

considerations for the appropriateness of accrual status and impairment analyses. The OCC also 

joined the other banking agencies in issuing guidance on allowance for loan and lease loss 

estimation practices for loans and lines of credit secured by junior liens on residential properties.

Advisory Committees on Minority Institutions and Mutual Associations: The advisory 

committees are being established to provide perspectives to the agency on the unique challenges 

and needs of minority depository institutions and mutual savings associations. 

The OCC Minority Depository Institutions Advisory Committee and the OCC Mutual Savings 

Association Advisory Committee will each have 10 members serving two-year terms and will 

each meet at least twice per year. 

 OCC National Risk Committee’s Semi-Annual Risk Perspectives: To provide a more robust 

dialogue with bankers and others about risks facing the banking industry, the OCC launched 
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a semi-annual report that highlights the OCC’s perspectives on key issues and risks that pose 

threats to the safety and soundness of banks. The report draws upon the findings of the 

OCC’s supervisory activities and analyses of the banking industry.

Enforcement Activities

As needed, the OCC uses its enforcement authority to ensure that national banks and federal 

savings associations operate in a safe and sound manner and in compliance with laws and 

regulations. From October 1, 2011 to September 30, 2012, the OCC issued 295 formal and 

informal enforcement actions, including 103 Section 1829 Prohibitions Against Institution 

Affiliated Parties, 57 Formal Agreements, 66 Cease and Desist Orders, and 48 Civil Money 

Penalties.

Significant enforcement activities included:

 A $35 million civil money penalty against a national bank for violations of section 5 of the 

Federal Trade Commission (FTC) Act, and a $150 million reimbursement ordered for 2.5 

million affected consumers. The OCC order also required the bank to stop the sales and 

marketing of any debt suspension product, debt cancellation product, credit and identity 

monitoring products, or any similar products.

 A civil money penalty assessment of $20 million and restitution order of more than $14.5 

million against a national bank for the involvement of the bank’s predecessor institutions in a 

bid rigging scheme involving transactions to market and sell derivative financial products to 

municipalities and nonprofit organizations. The OCC's action was part of a global resolution 

coordinated with the U.S. Department of Justice, U.S. Internal Revenue Service, U.S. 

Securities and Exchange Commission, FRB, and over 20 State Attorneys General.

 Enforcement actions against national banks for violations and compliance deficiencies 

related to the Servicemembers Civil Relief Act, ensuring protections such as limitations on 

foreclosures and interest rates, requirements to forgive interest in excess of 6 percent on preservice debts, and allowances to terminate automobile leases under certain circumstances.

 A $500,000 civil money penalty against a federal savings association for violations of section 

5 of the FTC Act, and order the bank to provide approximately $6 million in restitution to an 

estimated 17,000 affected customers, based on failure to properly manage vendors who 

engaged in deceptive debt collection practices. The OCC’s actions were taken in 

coordination with separate actions by the FRB, the Consumer Financial Protection Bureau 

and the FDIC against affiliated companies under their jurisdiction. 

 A fair lending settlement resulting from a referral to the Department of Justice to address the 

steering of minority borrowers into higher-priced subprime loans.

Regulatory Activities 

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

banks’ and federal savings associations’ ability to compete while maintaining safety and 

soundness. The OCC will continue its legal work of analysis and interpretation of national bank 

and federal savings association powers and authorities during the remainder of FY 2012 and 

FY 2013. 

The OCC devoted a significant amount of resources in FY 2012 to regulatory activities relating 

to implementation of the Dodd-Frank Act, Basel III, and support of the Comptroller’s 
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participation on the Financial Stability Oversight Council. The agency issued a proposed 

regulation implementing the so-called "Volcker Rule" requirements of the Dodd-Frank Act, 

which prohibits federally-insured depository institutions and their affiliates from engaging in 

short-term proprietary trading of any security, derivative, and certain other financial instruments 

for a banking entity's own account, and from owning, sponsoring, or having certain relationships 

with, a hedge fund or private equity fund, and clarified the conformance period. Other issuances 

included a proposed rule on appraisals for higher-risk mortgages, and a proposed rule to remove 

references to credit ratings from various OCC regulations and related guidance to assist national 

banks and federal savings associations in meeting due diligence requirements in assessing credit 

risk for portfolio investments.

The OCC continued to prepare proposed regulations to fully integrate OCC and OTS rules. 

Charter Activities 

From October 1, 2011 to September 30, 2012 the OCC issued 1,639 corporate licensing 

decisions, with a 98 percent on-time rate. In order to address potential safety and soundness 

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

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

The OCC continues to receive and process a significant share of applications involving 

resolution of problem financial institutions. 

FY 2013 and 2014 Priorities

A major focus of the OCC’s supervisory, regulatory, and administrative programs for FY 2013 

and for FY 2014 will be implementing applicable provisions of the Dodd-Frank Act and the 

enhanced capital framework under Basel III, assessing achievement of the OCC’s heightened 

expectations for governance and oversight of large banking institutions, and continuing to 

strengthen and enhance the effectiveness of the OCC’s supervisory programs. Work also will

continue to fully integrate the applicable regulatory, supervisory policy and examination 

platforms for national banks and federal savings associations and to ensure that these institutions 

comply with applicable new statutory and regulatory requirements. 

Priorities and activities include the following:

 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;

 Require corrective action when deficiencies or undue risk concentrations are found;

 Elevate supervisory expectations for governance and oversight of large banks;

 Monitor and assess the effectiveness of national bank and federal savings association 

mortgage servicers’ loan modification and foreclosure actions, including needed actions to 

improve the corporate governance of their processes;

 

1 Under the Dodd-Frank Act , the CFPB was given the authority to supervise and examine insured depository

institutions with total assets over $10 billion for compliance with federal consumer financial laws. The OCC will 

continue to conduct examinations to assess compliance with consumer protection issues for national banks and 

federal savings associations with $10 billion or less in total assets, and to examine all national banks and federal 

savings associations for compliance with the Bank Secrecy Act, flood insurance regulations, and the CRA.
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 Resolve problem national banks and federal savings associations 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; 

 Determine whether national banks and federal savings associations have required risk 

management, internal controls, operational processes and capital to support planned new or 

expanded lines of business;

 Determine whether national banks and federal savings associations establish and maintain 

incentive compensation policies that are consistent with principles of safety and soundness 

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 the OCC’s 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; 

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

national banks’ and federal savings associations’ compliance with the BSA/AML, USA 

PATRIOT Act laws and regulations and fully implement actions to strengthen the 

effectiveness of the OCC’s supervisory activities in these areas;

 Continue to work with Treasury and other federal financial regulators to implement 

provisions of the Dodd-Frank Act and the enhanced capital and liquidity standards under 

Basel III;

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

through entry of new charters, other bank and federal savings association structure 

transactions, and expansion of national bank and federal savings association services and 

products in a safe and sound manner; and

 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.

Industry Outlook

The environment continues to be challenging for the OCC and the national banking and federal 

savings association industry. Economic conditions are expected to improve in FY 2013, yet 

troubled loans and borrowers will continue to tax the resources of many financial institutions. In 

addition, the shadow inventory of distressed residential properties will continue to hold back 

recovery in the housing market. Spillover from the sovereign debt crisis in Europe, uncertainty 

over the U.S. fiscal situation, and volatility in commodity prices may elevate and amplify risk in 

the systems. 

National banks and federal savings associations will face heightened compliance, operational, 

reputation, and strategic risks as a result of significant changes in the statutory, regulatory, and 

accounting requirements for various bank products, services, and transaction structures. They 

will need to successfully integrate these changes into their operations; it is likely that some of 

these changes will lead to fundamental shifts in some national banks’ and federal savings 

associations’ business models and strategic plans. To address these challenges, the OCC will 
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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 risk. 

National banks and federal savings associations have weathered several years of disruption to 

financial markets, a crisis in the mortgage sector, and a slow recovery from a long and deep 

recession. If national bank and federal savings association 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 in the way as shown in the table below. The long-term 

trend of national bank and federal savings association consolidation is likely to continue; the 

table below shows estimates of the change in number of institutions and share of assets held by 

banks over $10 billion in size, extrapolating from trends experienced between 2000 and 2011. 

The extrapolations exclude trust companies and foreign branch offices because, compared to 

national banks and federal savings associations, their growth is less closely linked to underlying 

economic trends.

Assets 

Estimated Change 

2011 to 2016

OCC 

National 

Banks

-23%

OCC

Federal 

Savings 

Associations 

-18%

All OCC-Supervised

+28%

2011

2016e

91.0%

94.6%

e = estimated

Number of 

Institutions 

Share of Total

System Assets In 

Institutions With

Assets > $10 billion

Loan demand has been growing more slowly than is usual in an economic recovery, in part 

because the economy as a whole has been growing more slowly than is usual after a recession. 

The combination of recession and financial crisis already has caused widespread deleveraging 

among both households and firms, cutting into the demand for loans. Although business capital 

spending and commercial lending have been growing, total outstanding commercial and 

industrial loans have not returned to pre-recession levels. Many firms have accumulated cash 

reserves, and even medium-size firms can now borrow long-term at low rates in bond markets.

Both of these factors tend to reduce business demand for bank loans. Most expect these trends to 

continue, limiting the pace of bank lending and asset growth.

Credit losses rose sharply during the financial crisis and recession, but are now receding for most 

loan categories. To strengthen their positions in the aftermath of the crisis, many banks raised 

additional capital. The result is a stronger banking system than existed three years ago. Risks to 

the system include continued problems in the credit markets, and a slower than normal economic

recovery, which could lead to lower than expected growth in revenues.
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Section 2 – Budget Adjustments and Appropriation Language

2.2 – Operating Levels Table

Dollars in Thousands

Office of Comptroller of the Currency FY 2012 FY 2013 FY 2014

Object Classification Actual Estimated Estimated

11.1 - Full-time permanent 449,134 477,360 486,907

11.3 - Other than full-time permanent 9,563 10,412 10,619

11.5 - Other personnel compensation 2,633 2,724 2,780

11.9 - Personnel Compensation (Total) 461,330 490,496 500,306

12.0 - Personnel benefits 285,941 199,249 203,234

13.0 - Benefits for former personnel 805 195 199

Total Personnel and Compensation Benefits $748,076 $689,940 $703,739

21.0 - Travel and transportation of persons 53,412 60,539 61,750

22.0 - Transportation of things 1,595 2,918 2,976

23.1 - Rental payments to GSA 2,750 2,119 2,161

23.2 - Rental payments to others 46,955 64,915 66,213

23.3 - Communication, utilities, and misc charges 12,177 13,772 14,047

24.0 - Printing and reproduction 823 899 912

25.1 - Advisory and assistance services 31,374 35,531 36,242

25.2 - Other services 14,271 23,561 24,033

25.3 - Other purchases of goods & serv frm Govt accounts 10,404 11,831 12,068

25.4 - Operation and maintenance of facilities 7,369 8,636 8,809

25.7 - Operation and maintenance of equip 64,347 65,483 66,793

26.0 - Supplies and materials 4,546 7,450 7,599

31.0 - Equipment 44,666 23,074 23,535

32.0 - Land and structures 34,303 12,097 12,338

42.0 - Insurance claims and indemnities 103 235 235

Total Non-Personnel $329,095 333,060 339,711

Total Budgetary Resources $1,077,171 $1,023,000 $1,043,450

Budget Activities:

Supervise 924,417 877,800 895,350

Regulate 125,416 119,200 121,580

Charter 27,338 26,000 26,520

Total Budgetary Resources $1,077,171 $1,023,000 $1,043,450

FTE 3,656 3,782 3,782
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2B – Appropriations Language and Explanation of Changes

The OCC receives no appropriations from Congress.

2C – Legislative Proposals

The OCC has no legislative proposals.
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Section 3 – Budget and Performance Plan

3A – Supervise

($877,800,000 from reimbursable resources): 

An effective supervision program is the cornerstone of the OCC’s activities that support its 

strategic goals. Specifically, the Supervise program consists of ongoing supervision and 

enforcement activities that directly support the OCC’s strategic goals to 1) ensure that each 

national bank and federal savings association is operating in a safe and sound manner and is 

complying with applicable laws, rules, and regulations relative to the financial institution and the 

customers and communities it serves, and 2) provide fair access to financial services and fair 

treatment of customers. Assessing the condition and risk management practices of national 

banks and federal savings associations, and requiring corrective actions when weaknesses are 

found, directly supports Treasury’s goal of repairing and reforming the financial system.

The Supervise program includes national bank and federal savings association examinations and 

enforcement activities; resolution of disputes through the national bank and federal savings 

association appeals process; ongoing monitoring of national banks and federal savings 

associations; and analysis of systemic risks and market trends in the national banking system or 

groups of national banks and federal savings associations, the financial services industry, and the 

economic and regulatory environment. 

The goal owner for this budget activity is the Comptroller of the Currency, Thomas J. Curry.

Description of Performance:

Percentage of National Banks and Federal Savings Associations with Composite CAMELS 

Rating of 1 or 2

The composite CAMELS rating reflects the overall condition of a national bank or federal 

savings association. Bank regulatory agencies use the Uniform Financial Institutions Rating 

System, CAMELS, to provide a general framework for evaluating all significant financial, 

operational, and compliance factors inherent in a national bank or federal savings association. 

The rating scale is 1 through 5 of which 1 is the highest rating granted. These CAMELS ratings 

are assigned at the completion of every supervisory cycle or when there is a significant event 

leading to a change in CAMELS. 

The OCC has established a target outcome measure that 90 percent of the institutions under its 

supervision have a composite CAMELS rating of 1 or 2. Such a rating is consistent with the 

strategic goal of a safe and sound banking system, that banks maintain adequate capital and 

liquidity and have strong risk management practices. 

Beginning with FY 2012, federal savings associations were included in the performance 

measure. As of September 30, 2012, 76 percent of national banks and federal savings 

associations earned composite CAMELS ratings of either 1 or 2. The increase in the number of 

national banks with less favorable composite CAMELS ratings is not unexpected at this stage of 

the credit cycle and reflects impaired asset quality and earnings that is affecting many 
OCC - 15

institutions. Degradation in CAMELS also can reflect weaknesses in risk management systems 

that need corrective action. Consistent with Treasury’s goal of repairing and reforming the 

financial system and supporting the recovery of the housing market, the OCC has instructed bank 

examiners to identify and seek corrective action at an earlier stage to address potential problems 

or weaknesses. The OCC’s primary focus is to ensure that CAMELS ratings are an accurate 

reflection of each institution'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 the target. As national bank or federal savings association performance and 

asset quality improves and directed corrective actions are implemented, the OCC expects 

CAMELS ratings to gradually improve. 

Percentage of National Banks and Federal Savings Associations that are Considered WellCapitalized

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

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

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

relative to their risks. The OCC has established a target outcome measure that 95 percent of 

national banks and federal savings associations will meet or exceed the well-capitalized 

threshold. Beginning in FY 2012, federal savings associations were included in the performance 

measure.

The economic environment and resulting increase in problem assets placed a strain on some 

banks’ capital buffers that has resulted in levels below the OCCs’ target performance measure. 

The OCC works closely with problem national banks and federal savings associations to develop 

rehabilitation plans. Such plans typically include directives to improve or restore capital levels. 

These efforts, combined with a more stable operating environment, have resulted in 

improvement in this performance goal since FY 2009. As of September 30, 2012, 92 percent of 

national banks and federal savings associations were classified as well capitalized. 

 

More broadly, the OCC is working with other regulators both domestically and internationally to 

strengthen capital standards. In June 2012, the OCC, FDIC, and FRB issued a final rule that 

revises and strengthens the agencies’ risk-based capital rules for market risk and issued notices 

of proposed rulemakings to revise and strengthen the agencies’ general risk-based capital 

requirements. 

Percentage of National Banks and Federal Savings Associations with Consumer Compliance 

Rating of 1 or 2

To ensure fair access to financial services and fair treatment of national bank and federal savings 

association customers, the OCC evaluates an institution’s compliance with consumer laws and 

regulations. Bank regulatory agencies use the Uniform Financial Institutions Rating System, 

Interagency Consumer Compliance Rating, to provide a general framework for evaluating 

significant consumer compliance factors inherent in an institution. Each institution 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 of which 1 is 

the highest rating granted. Beginning in FY 2012 federal savings associations were included in 
OCC - 16

the performance measure and the target for FY 2013 and FY 2014 will currently remain 

unchanged at 94 percent. As of September 30, 2012, national banks and federal savings 

associations continue to show strong compliance with consumer protection regulations with 93

percent earning a consumer compliance rating of either 1 or 2. 

Under the Dodd-Frank Act, this rating changed for those institutions with total assets of no more 

than $10 billion for which the OCC has enforcement and supervisory authority. 

Rehabilitated National Banks and Federal Savings Associations as a Percentage of Problem 

National Banks and Federal Savings Associations One Year Ago

Problem national banks and federal savings associations ultimately can reach a point at which 

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

problem financial institutions can lead to a successful rehabilitation. As of September 30, 2012, 

27 percent of national banks and federal savings associations 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, OCC’s performance on this measure has been adversely affected by the underlying 

economic conditions facing the banking industry and is below the OCC’s target of 40 percent. 

The number of serious problem financial institutions, 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 institutions' 

financial condition. Under the Dodd-Frank Act, the OCC assumed responsibility on July 21, 

2011 for the supervision of federal savings associations. Federal savings associations are now 

incorporated into this measure.

As previously noted, the OCC is taking a number of steps through its Supervise and Regulate 

programs to repair and make national banks and federal savings associations more resilient to 

financial stresses and to identify and obtain corrective action at an earlier stage, when problems 

can be addressed most successfully. These efforts include heightened capital and liquidity 

standards and increased emphasis on the need for stress testing, designed to provide financial 

institutions with stronger capital buffers to withstand unforeseen events. These are multi-year 

efforts that will continue in FY 2013. The OCC also updated its guidance on credit 

concentrations and provided an additional tool for examiners, national banks, and federal savings 

associations to stress test an institution’s income producing commercial real estate portfolios. 

Such concentrations were a major contributing factor to many, if not most of the recent problem 

financial institutions reflected in this measure. As these efforts progress and the operating 

condition for the financial sector improves, this performance measure is likely to improve to the 

current baseline target level of 40 percent for FY 2013 and FY 2014.

Total OCC Costs Relative to Every $100,000 in National Bank and Federal Savings Association 

Assets Regulated

Beginning in FY 2006, the OCC implemented a performance measure that reflects the efficiency 

of its operations while meeting the increasing supervisory demands of a growing and more 

complex national banking system. 

The OCC costs are those reported as total program costs on the annual audited Statement of Net 

Cost. National bank and federal savings association assets are those reported quarterly by 
OCC - 17

national banks and federal savings associations on the Reports of Condition and Income. Total 

national bank and federal savings association assets represent the growth and complexity of the 

financial institutions under the jurisdiction of the OCC. This measure supports the OCC’s 

strategic goal of efficient use of agency resources. The OCC’s ability to control its costs while 

ensuring the safety and soundness of national banks and federal savings associations benefits all 

national bank and federal savings association customers. The FY 2012 target was $9.22 with the 

actual result at $10.51. The OCC will continue its efforts to ensure that resources are used 

prudently and that programs are carried out in a cost effective manner, as OTS functions relating 

to federal savings associations are integrated into the OCC.

3.1.1 – Supervise Budget and Performance Plan

Dollars in Thousands

Supervise Budget Activity

Resource Level FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014

Actual Actual Actual Actual Actual Actual Estimated Estimated

 Revenue/Offsetting Collections $528,622 $565,921 $597,859 $618,254 $684,273 $924,417 $877,800 $895,350

Budget Activity Total $528,622 $565,921 $597,859 $618,254 $684,273 $924,417 $877,800 $895,350

Measure FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014

Actual Actual Actual Actual Actual Actual Target Target

Percent of National Banks and 

Federal Savings Associations with 

Composite CAMELS Rating 1 or 2

96.0 92.0 82.0 72.0 75.0 76.0 90.0 90.0

Percentage of National Banks and 

Federal Savings Associations that 

are Categorized as Well 

Capitalized 

99.0 99.0 86.0 91.0 93.0 92.0 95.0 95.0

Percentage of National Banks and 

Federal Savings Associations With 

Consumer Compliance Rating of 1 

or 2

97.0 97.0 97.0 96.0 96.0 93.0 94.0 94.0

Rehabilitated National Banks and 

Federal Savings Associations as a 

Percentage of Problem Financial 

Institutions One Year Ago 

(CAMEL 3,4, or 5)

52.0 47.0 29.0 22.0 22.0 27.0 40.0 40.0

Total OCC Costs Relative To 

Every $100,000 in Bank And 

Federal Savings Associations 

Assets Regulated ($)

8.89 8.39 8.81 9.28 8.76 10.51 9.22 9.22

Key: N/A - Not in Effect; DISC - Discontinued; B – Baseline

Note: Prior to FY 2012, OCC Performance Measures included only supervision of national banks. On July 21, 

2011, the OCC assumed responsibility for regulating federal savings associations. Therefore, FY 2012 is the new 

baseline year for the OCC, with new measures. FY 2013 and FY 2014 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 into the CFPB.
OCC - 18

3B – Regulate

($119,200,000 from reimbursable resources): 

The Regulate program supports the OCC’s strategic goals of 1) assuring the safety and 

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

treatment of national bank and federal savings association customers; and 3) a flexible legal and 

regulatory framework. Specifically, the Regulate program consists of ongoing activities that 

result in the establishment of regulations, policies, operating guidance, and interpretations of 

general applicability to national banks and federal savings associations. These regulations, 

policies, and interpretations may establish system-wide standards, define acceptable national 

banking and federal savings association practices, provide guidance on risks and responsibilities 

facing national banks and federal savings associations, or prohibit (or restrict) national banking 

or federal savings association practices deemed to be imprudent or unsafe. They also establish 

standards for ensuring fair access to financial services and fair treatment of national bank and 

federal savings association customers. This program includes the establishment of examination 

policies and handbooks; interpretations in administrative, judicial, and congressional 

proceedings; and establishing the applicable legal and supervisory framework for new financial 

services and products.

Description of Performance:

Specific activities undertaken in FY 2012 as part of this program were described earlier and 

included the issuance of various supervisory guidance on the Volcker rule and lending limits. 

Significant resources also were spent on various Dodd-Frank rulemakings, including those 

pursuant to section 171(b) regarding minimum risk-based capital requirements; section 742(c)(2) 

related to certain off-exchange foreign currency transactions with retail customers; section 939A 

pertaining to removing the reliance on credit ratings; section 956 pertaining to incentive-based 

compensation arrangements; section 941 pertaining to risk retention requirements and associated 

minimum underwriting standards for asset securitizations; and sections 731 and 764 related to 

capital requirements and margin requirements on certain swap transactions. In FY 2013, the 

OCC will continue to support operations of the Financial Stability Oversight Council and issue 

Dodd-Frank rulemakings, as well as complete the comprehensive integration of OTS rules into 

the OCC regulatory structure. This effort will be accomplished through a robust internal project 

management system and consultative and joint rulemaking processes with other regulatory 

entities. 

The goal owner for this budget activity is the Comptroller of the Currency, Thomas J. Curry.
OCC - 19

3.1.2 – Regulate Budget and Performance Plan

Dollars in Thousands

Regulate Budget Activity

Resource Level FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014

Actual Actual Actual Actual Actual Actual Estimated Estimated

 Revenue/Offsetting Collections $91,296 $87,683 $94,511 $97,735 $108,171 $125,416 $119,200 $121,580

Budget Activity Total $91,296 $87,683 $94,511 $97,735 $108,171 $125,416 $119,200 $121,580

Key: N/A - Not in Effect; DISC - Discontinued; B - Baseline

3C – Charter

($26,000,000 from reimbursable resources): 

The Charter program consists of ongoing activities that result in the chartering of national banks 

and federal savings associations and the evaluation of the permissibility of structures and 

activities of national banks and federal savings associations and their subsidiaries. This includes 

the review and approval of new national bank and federal savings association charters, federal 

branches and agencies, mergers, acquisitions, conversions, business combinations, corporate 

reorganizations, changes in control, operating subsidiaries, branches, relocations, and 

subordinated debt issuances. By supporting the entry of new products and institutions into the 

financial system in a manner consistent with safety and soundness, the Charter program supports 

the OCC’s strategic goals of assuring safety and soundness while allowing national banks and 

federal savings associations to offer a full competitive array of financial services. Since FY 2012 

is the baseline year, the target of 95 percent may be revised for FY 2013 and FY 2014 as the 

impact of integrating OTS functions relating to federal savings associations into the OCC and the 

transfer of designated OCC functions into the CFPB.

The goal owner for this budget activity is the Comptroller of the Currency, Thomas J. Curry.

Description of Performance:

Percentage of Licensing Applications and Notices Completed within Established Time Frames

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

economy by enabling national banks and federal savings associations to complete various 

corporate transactions and introduce new financial products and services. Delays in providing 

prompt decisions on applications and notices can deprive a national bank or federal savings 

association of a competitive or business opportunity, create business uncertainties, or diminish 

financial results. Time frames have been established for completing each type of application and 

notice. As of September 30, 2012, the OCC completed 98 percent of national bank and federal 

savings association applications and notices within the required time frame. The OCC will 

continue to meet its Charter program goals by providing staff training, coordination between 

charter and supervisory staff on safety and soundness and compliance matters, issuance of 

updated procedures, and maintaining an emphasis on accessibility and early consultation with 

national bank and federal savings association organizers and others proposing national bank and 

federal savings association structure changes.
OCC - 20

3.1.2 – Charter Budget and Performance Plan

Dollars in Thousands

Charter Budget Activity

Resource Level FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014

Actual Actual Actual Actual Actual Actual Estimated Estimated

 Revenue/Offsetting Collections $18,515 $20,112 $23,628 $24,434 $27,043 $27,338 $26,000 $26,520

Budget Activity Total $18,515 $20,112 $23,628 $24,434 $27,043 $27,338 $26,000 $26,520

Measure FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014

Actual Actual Actual Actual Actual Actual Target Target

Percentage of Licensing 

Applications and Notices 

Completed within Established 

Timeframes 

96.0 95.0 95.0 96.0 97.0 98.0 95.0 95.0

Key: N/A - Not in Effect; DISC - Discontinued; B - Baseline

Note: Prior to FY 2012, OCC Performance Measures included only supervision of national banks. On July 21, 

2011, the OCC assumed responsibility for regulating federal savings associations. Therefore, FY 2012 is the new 

baseline year for the OCC, with new measures. The FY 2013 and FY 2014 targets are subject to revision based on 

the impact of integrating OTS functions relating to federal savings associations into the OCC.

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

validation, please go to: http://www.treasury.gov/offices/management/dcfo/accountabilityreports/
OCC - 21

Section 4 – Supplemental Information

4A – Summary of Capital Investments

The OCC’s Information Technology (IT) strategic plan aligns information technology initiatives 

and investments to the OCC’s core mission, including the development of new or enhanced 

applications and services and disposition of redundant or “end-of-lifecycle” applications, 

capabilities, and services. 

The IT strategic plan is implemented through the budget formulation process and the Capital 

Planning and Investment Control process. These processes ensure that all IT investments are 

aligned with the OCC’s mission, goals, objectives, and target enterprise architecture before a 

project is funded. The capital planning process reviews and prioritizes detailed business cases to 

promote technology reuse, to capitalize on enterprise opportunities, and to reduce redundant and 

obsolete capabilities and services. Invest, evaluate, and control ensures that the OCC IT strategy 

has adequate funding and staff resources to address IT investment priorities, and considers risk 

mitigation strategies for IT investments that are not meeting stated cost, time, and performance 

goals. Performance metrics are linked to the delivery, alignment, and achievement of the OCC’s

strategic program objectives. Cost effectiveness for each investment is evaluated through regular 

benchmarking studies, featuring peer group organizations. Key metrics used to evaluate 

infrastructure include availability, reliability, utilization, defects, and customer satisfaction.

FY 2013 and 2014 Plans

The OCC has three major IT initiatives in FY 2013 and 2014:

Mainframes & Servers Support Services (MSSS) - The MSSS supports OCC’s mainframe 

computer operations and maintenance (O&M). As part of this initiative, OCC is consolidating 

and relocating data center infrastructure to a third-party co-location facility commencing in FY 

2012, with an anticipated completion in FY 2013. Based upon detailed alternatives analysis 

conducted in FY 2011, it was determined that the OCC’s main data center cannot meet the 

capacity requirements for growth forecasts. Relocation of this data center will provide OCC 

with access to basic facilities and environmental services (floor space, power cooling, network 

and physical security) while supporting mandates for data center consolidation from Treasury 

and Office of Management and Budget. 

Telecommunications Services and Support (TSS) - TSS includes telecommunications wide area 

network and local area network infrastructure. Remote access to OCC systems is facilitated via a 

virtual private network, dial-in, and cellular wireless access using two-factor authentication. 

This investment also has messaging services supporting highly mobile bank examiners and OCC 

staff. In FY 2013 the OCC will be commencing a three-year effort to upgrade the Headquarters

and field office phones systems and telecom infrastructure including Local Area Network/Wide 

Area Network hardware, Video Tele-Conferencing and Voice Over Internet Protocol.

End User Services and Support (EUSS) - The EUSS includes help desk/customer service 

support, personal computer hardware and software O&M, asset management, and desktop 

engineering and image management. New PCs and peripherals will be deployed to the entire 
OCC - 22

OCC workforce in FY 2013 which will include Microsoft Windows 7, Microsoft Office 2010 

and Internet Explorer 9.of Capital Investments

A summary of capital investment resources, including major information technology and nontechnology investments, can be viewed/downloaded here: 

http://www.treasury.gov/about/budget-performance/Pages/summary-of-capital-investments.aspx