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Top Story:  Interview with Comptroller Curry

01/10/2014

Comptroller Curry’s thoughts on communication, banking relations, operational risk, today’s financial environment, and himself

Q. From regular field office visits to brown-bag lunches and employee town hall meetings, it seems that you are very interested in interacting with OCC employees across the agency. What are you learning from these meetings and from the employees?

Comptroller Curry chats with OCC employees at a Career Forum held in October 2013.

Comptroller Curry chats with OCC employees at a Career Forum held in October 2013.

An important part of my job is to engage with everyone at the OCC. The strength of the agency is really the people, so it's critically important that I engage as much as possible with the professional and support staff of the agency to hear about the issues affecting them in doing their job and fulfilling their role as members of the OCC team.

Q.  What are you hearing, and are there common themes?

The most important theme that I've gotten out of these engagement efforts is how much people are committed to the mission of the agency. That's one of the most reassuring things I've heard from day one—everybody believes in the mission. Going forward, I want to make sure that we give people the tools to help them do what they do and to help them achieve our mission. Also, employees know best what is happening on the ground, and I need to hear about that from employees.

Q.  You and other senior officials occasionally meet with state bankers associations when they visit the OCC. What do you learn from these meetings?

We recently had a meeting with Connecticut, Massachusetts, and Rhode Island state bankers associations. These meetings are an invaluable opportunity for two reasons: one, for me to be able to explain to them what a professional organization we have here at the OCC. Since many of the bankers that come in here are community bankers, I can dispel the notion that we're simply a large bank regulator or that we only care about large banks; and two, I make it a point of always starting off these meetings discussing the depth of our midsize and community bank supervision units, and the strengths that we have as a national organization—whether it's the individualized skills and expertise that examiners have, the strength of our policy people, the ability we have to tap into our large bank supervision unit if we need some specialization or something discreet, and the top-notch legal team here at the OCC.

Comptroller Curry meets with bankers at a Meet the Comptroller event held in Chicago.

Comptroller Curry meets with bankers at a Meet the Comptroller event held in Chicago.

Q. What are their concerns, and do they express these to you during the meetings?

They want to comply with the rules and regulations, but they also want to know what our expectations are. So it's a great opportunity for the senior members of the OCC organization to articulate our expectations, and this is the key thing that I've tried to do with some of the more recent banker association meetings—keep it conversational, engage in a dialogue.

Bankers really appreciate that, and it's not a case of us making formal presentations to them or coming across as if we're lecturing to them. I give a lot of credit to the Banking Relations team for experimenting with formats and meeting room layouts to foster a more engaged exchange between the OCC and the bankers. And that helps us externally by reinforcing the strengths of the agency. That is, we are the top-notch bank supervisor in the United States if not the world, and that we're aware of the major issues facing the industry, and that we are big enough to know that we need to hear what the impact is on the ground, and big enough to hear some criticism of how we or the bank regulatory process works in the United States.

Q. What are the OCC's most pressing challenges as an organization and how are we addressing them?

We face some of the same challenges that the industry has in the sense that we all went through the global financial crisis. That really was a watershed event. The Dodd–Frank Act, regardless of one's views of the statute, was really a rule changer and, again, a watershed event, and has impacts not on just the banks but the rule writers and the agencies like the OCC that need to make sure that they are actively ensuring compliance once the rules are adopted and in place. That's going to be the challenge for the next year and beyond—making sure that we train our people, provide them the skills they need to credibly assess and evaluate compliance with the various Dodd–Frank Act provisions, and to communicate that to the industry.

Q. The balanced scorecard effort and the strategic initiatives are getting a lot of internal attention. Are we meeting the goals and objectives of these efforts, and what changes can OCC employees expect?

All those projects are really long-term projects or long-duration projects.  They are intended to give us the tools to assess and measure our own successes and identify areas in which we need to pay more attention.  They are important management tools that can only make a great organization that's been around for 150 years even stronger, and that's really part of my goal coming here a year and a half ago—build on the foundation that already exists, make it strong and sufficient to make sure that the OCC succeeds in the next 150 years.

Q. What can employees expect after the goals and objectives of these initiatives are met?

First of all, we need to be transparent and to share how well we're doing in terms of meeting the individual initiatives, goals, and objectives. That's important. Many of these initiatives are very ambitious. So it's going to take some time to actually see the fruits of our labor, but I'm very pleased with the amount of work that's been done already. And at the end of the day the true validation is our own people and whether we've made a difference with them.

Q. Last year you highlighted operational risk as the biggest risk facing large banks.  If the last year was the year of operational risk, what should examiners and bankers be watching for in the coming year?

Operational risk is still a big issue, given the number of consent orders and the number of civil money penalties, indicating that some of the past deficiencies in the operational risk area are continuing to come to the surface. My hope is that we are making progress in this area in terms of making institutions aware of the nature of these risks and our expectation that they will appropriately manage those risks. One of the things that I try to highlight during banker association visits is our Semiannual Risk Perspective that is put out by the National Risk Committee. It is very useful in trying to identify what we see as both the emerging economic and financial risks and what our examiners are focusing on. To have it in writing and out there in front of people to look at and assess is important for transparency reasons.

Q. Cybersecurity has been in the news quite a bit, and the Federal Financial Institutions Examination Council (FFIEC) has created a new cybersecurity working group. As chairman of the FFIEC, can you comment on what regulators are doing about growing cybersecurity threats?

I'm very proud to be the chair of the FFIEC. I'm equally proud of the recommendation I made to the council to establish a working group under the task force on bank supervision to specifically address this issue. I’m also proud that the OCC is tasked with leading that group. When we talk about emerging risks or potential threats to the banking industry, cybersecurity is up there given that cyberfraud and cyberterrorism or systemic risks are increasing. We have seen over the last year and a half increasing numbers of denial of service attacks on larger institutions. We want to make sure that the entire system, from the smallest credit union, the smallest bank, to the largest bank, are aware of the nature of the cyber threats and that they are able to take appropriate steps—given their size and circumstance—to deal with those threats and protect against them. And in the event that there is an attack, that they're able to resume business as quickly as possible without interruption.

Q. Do the smaller institutions have the resources to maintain a robust cybersecurity program? Are they the ones being targeted, or is it the larger institutions?

We need to make sure the entire system is prepared.  There are appropriate size and scale related steps that the smaller institutions can take, and that's the reason why a lot of the focus on the FFIEC cyber threat group is on awareness. We have the unique opportunity when we're on site examining these banks to help disseminate what the best practices are and what can be appropriately done by an institution given its size and resources.  Also, a lot of the computer-related services for our smaller community banks are provided by independent service providers for which we have regulatory oversight, examination oversight through the FFIEC. So the idea is that we will make sure that those servicers that provide these critical services are meeting our expectations and effectively help our institutions.

Q. What are your thoughts on the current state of the banking financial environment, and how does it compare to the environment at the time you assumed the role of Comptroller?

We're certainly far better off than we were five years ago. There are higher levels of capital and appropriate levels of reserves. In the area of large bank supervision, we increased our supervisory expectations for the largest institutions, and I think that's appropriate. There are some concerns about the low interest rate environment. Again, that's something that's highlighted in the Semiannual Risk Perspective. There are still a number of problem institutions that we need to work with. The hope always is that through our special supervision unit for community banks, they're able to rehabilitate the institutions or find some type of market resolution for them. The use of the FDIC as a receiver is really the last resort. [Deputy Comptroller for Special Supervision] Kris Whittaker and her team have been very creative in how they've approached problem institutions, and [Senior Deputy Comptroller for Midsize/Community Bank Supervision] Jennifer Kelly has certainly been very supportive of that operation.

Q. You have been at the OCC for a little more than a year and a half. What are the high points of your tenure thus far, and what do you believe has been the agency's most significant accomplishment since you became Comptroller?

Office of the Comptroller of the Currency, 150 Years

The fact that we are celebrating 150 years of significant accomplishment is really rewarding. And, again, it underscores the depth and commitment of the agency to its mission. The most significant accomplishment has been our ability to continue to provide the highest quality supervision at the same time that we're dealing with the massive number of structural changes, whether through the Dodd–Frank Act or trying to adopt domestic capital standards. These are all significant events and significant projects taking place while we’re doing what we've always done, which is to be on the ground supervising all of our institutions.

Q. You are quoted as saying that the Comptroller position has been your most rewarding role. Why?

I started out over 25 years ago in the state bank regulatory world as a lawyer and I have always looked to see what the OCC interpretations were on a particular issue and how the National Bank Act treated a particular subject. I was always able to rely on the level of well-developed legal interpretations. When I became first deputy commissioner of banks, I learned that the OCC was always the gold standard in terms of examiner training, professionalism, and high-quality work. Coming to the OCC and having the honor of being named Comptroller by the President and confirmed by the Senate, is really the culmination of my career and the high point as a bank regulatory official.

Last Updated: 03/19/2014