What Is the Office of the Comptroller of the Currency?
Let me tell you about the Office of the Comptroller of the Currency, or OCC—it's a federal agency that handles the enforcement of laws for national banks. Specifically, it charters, regulates, and supervises national banks, federally chartered savings associations, and federal branches and agencies of foreign banks right here in the U.S. The head of the OCC is the Comptroller of the Currency, who gets appointed by the President and confirmed by the Senate.
Key Takeaways
- The OCC charters, regulates, and supervises both national and foreign banks operating in the U.S.
- Appointed by the President, the OCC is funded by the banks themselves through examination and processing fees.
- The OCC holds significant power, including denying applications for new bank branches, removing bank directors, and taking supervisory actions against banks.
How the Office of the Comptroller of the Currency (OCC) Works
The OCC was founded under the National Currency Act of 1863, and its role is to monitor banks to make sure they operate safely and meet all necessary requirements. It oversees key areas such as capital, asset quality, management, earnings, liquidity, sensitivity to market risk, information technology, compliance, and community reinvestment.
As an independent bureau within the Department of Treasury, the OCC's mission is clear: to ensure that national banks and federal savings associations operate in a safe and sound manner, provide fair access to financial services, treat customers fairly, and comply with applicable laws and regulations.
Congress doesn't fund the OCC—instead, the money comes from national banks and federal savings associations that pay for their examinations and the processing of corporate applications. The OCC also generates revenue from its investments, mainly in U.S. Treasury securities.
The agency is led by the Comptroller, who is confirmed by the Senate for a five-year term. This person also serves as a director of the Federal Deposit Insurance Corporation (FDIC) and NeighborWorks America.
OCC Structure
The OCC operates with four district offices, plus field and satellite offices across the nation, and even an examining office in London. Its staff of bank examiners performs on-site reviews of national banks and federal savings associations, or thrifts. They supervise by analyzing the institution's loan and investment portfolios, funds management, capital, earnings, liquidity, and sensitivity to market risk. Examiners also check internal controls, compliance with regulations and laws, and evaluate how well management identifies and controls risk.
Power of the OCC
The OCC has the authority to approve or deny applications for new charters, branches, capital changes, and other shifts in banking structure. It can take supervisory actions against banks in its jurisdiction if they fail to comply with laws and regulations. The agency can also remove officers and directors. Beyond that, it has the power to negotiate agreements for changing bank practices, impose monetary penalties, and issue cease-and-desist orders.
After the Dodd-Frank Act, the OCC took on responsibility for the ongoing examination, supervision, and regulation of federal savings associations. In the same period, the OCC issued a final rule to implement several Dodd-Frank provisions, including changes to transfer functions from the Office of Thrift Supervision.
