In FY 2017, the agency continued to fulfill The Office of the Comptroller of the Currency's (OCC’s) Strategic Plan: Fiscal Years 2015–2019, which included these goals:
- Ensuring a vibrant and diverse federal banking system that supports a robust U.S. economy.
- Uniting the workforce behind the theme “One OCC” to focus agency efforts on collaboration, innovation, coordination, and process efficiency.
- Firmly positioning the OCC to continue operating independently and effectively.
To help further these goals, the OCC adopted its first-ever “National Outreach Strategy” for FY 2017 and 2018. The OCC’s outreach strategy further advances the mission and vision of the agency and ensures the agency communicates with one voice as “One OCC” to support the strategic plan.
Recognizing that innovation in the financial marketplace affects the traditional consumer–bank relationship, the OCC is working to make its regulatory framework receptive to responsible innovation. Leading the way among federal financial regulators, the OCC’s responsible innovation efforts enhance its value to the American public and federal banking system.
Office of Innovation
The OCC established its Office of Innovation in October 2016. By January 2017 it was operating under the direction of Chief Innovation Officer Beth Knickerbocker. The office serves as a clearinghouse for innovation-related matters and as a central point of contact for OCC staff, banks, nonbank companies, and other industry stakeholders. The office collaborates with OCC business units and other regulators regarding innovation and facilitates related activities.
In 2017, the office conducted outreach and provided technical assistance in cities with significant financial innovation activity. The goal was to make candid regulatory advice more accessible. In particular, the office held office hours in San Francisco and New York, where OCC staff met with banks exploring potential innovations, companies seeking to work with banks, and fintech companies interested in opportunities to become national banks. The office hours encouraged discussions of innovation-related issues and participants to express their views. The office provided technical assistance to banks, particularly community banks, regarding emerging trends and partnering with fintech companies, and to fintech companies on how to navigate the regulatory landscape. The office intends to expand its office hours program in 2018 to other technology hubs. The office continues to meet and hold discussions with parties interested in responsible innovation in the federal banking system, and has met or had discussions with more than 100 parties, including banks, non-banks, individuals, trade groups, and fintech “hubs” and “accelerators.”
The office added full-time Innovation Officers in Washington, New York, and San Francisco. The local presence in New York and San Francisco will facilitate future office hours and face-to-face interactions among OCC staff, banks, and nonbanks; allow the office to stay attuned to industry trends; and allow participation in regional outreach events.
Additionally, the OCC promoted awareness and training among its employees to improve their understanding of issues and to lead collaboration with other regulators, foreign and domestic. The office established a research function with a library of multisource resources regarding asset management, payments and settlements, lending, bank operations, and financial and regulation technology from across the industry. The OCC also published papers on
- robo-automated investment advisory services.
- distributed ledger technology.
- mobile payment services opportunities and risks.
Chartering Innovative National Banks
In December 2016, the OCC proposed allowing nondepository fintech companies engaged in the business of banking to apply for a special purpose national bank charter. In March 2017, the agency published a draft supplement to the Comptroller’s Licensing Manual describing its proposed approach to chartering fintech companies. The draft supplement
- clarifies the agency’s approach to evaluating national bank charter applications from fintech companies.
- describes how it would supervise these banks.
- articulates expectations for how these banks would ensure fair access and fair treatment for all customers.
To date, the OCC has not decided whether to exercise its authority to grant special purpose national bank charters to nondepository fintech companies under 12 CFR 5.20(e)(1). In July, the OCC clarified that fintech companies can also seek national bank charters using other authorities used to charter full-service banks, as well as other, long-established special-purpose national banks, such as trust banks, banker’s banks, and Competitive Equality Banking Act (CEBA) credit card banks.
To protect the safety and soundness of the banking system, the OCC has the supervisory authority to require banks to bolster their cybersecurity defenses and their ability to manage, respond, and recover when events occur. Strengthening the cybersecurity of individual banks protects the broader financial services community and promotes confidence in the financial system.
Interagency Cooperation and Examination Approach
Working as part of the FFIEC in 2017, the OCC provided input to update guidance and strategies that help mitigate cyber risks. Additionally, the OCC shared supervisory approaches to cybersecurity issues with bank supervisory authorities from other countries.
The OCC’s examiners are trained to evaluate risk management and control mechanisms related to cybersecurity risks. In 2017, the OCC continued efforts to implement the interagency cybersecurity assessment tool (CAT) to assess and analyze operational risk in this area. The OCC also participated in updating the FFIEC Information Technology Examination Handbook.
The agency’s efforts to combat cyber risks earned recognition in 2017 from Risk magazine, a publication focused on financial risk management. The magazine named the OCC the 2017 Regulator of the Year for operational risk and cited agency leadership with helping the financial sector to defend against cyber attacks.
“Examiner efforts have been critical to the success of our efforts to improve cyber resiliency,” said Deputy Comptroller for Operational Risk Beth Dugan. “[Examiner] use of the CAT provides a rich data source that assists our risk-based supervisory processes, informs our policy assessments, and helps us identify weaknesses in controls for a particular financial institution and vulnerabilities across the system. It indicates where we need to focus our attention to ensure banks are in the strongest position to defend themselves against the next cyber threat.”
Finally, the OCC worked with other government agencies, law enforcement, the intelligence community, and the private sector to enhance coordination if a bank is breached or its data compromised. This collaboration included participating in cyber attack and response exercises.
OCC Cyber Posture
The OCC enhanced its own cyber posture during 2017 by improving how it maintains and handles sensitive data. The agency provides employee training and a number of technological solutions to reduce the risk that confidential information could be compromised. A cross-functional working group led by the Office of the Chief National Bank Examiner (CNBE) hosted focus groups this year to gain feedback on how the OCC handles sensitive bank information and the technology available to protect it.
The OCC also plans to support information technology services initiatives that provide new functionality, enhance business value, increase the OCC’s security posture, and ensure compliance with external mandates. One such initiative—email records management—was implemented agencywide on December 31, 2016, and ensures the capture of email in accordance with federal records management requirements.
In 2017 the OCC actively engaged employees to identify workforce needs, published a new strategic workforce plan, and improved how it provides quality leadership development.
Strategic Workforce Plan 2017–2019
The OCC’s strategic workforce plan helps the agency recruit and retain employees with the right skills and competencies and create a more strategic, cohesive approach to recruitment and succession management. The OCC also promoted flexibility programs, mapped and analyzed the current examiner commissioning program, developed a more intentional approach to experiential learning and career management, and piloted a geographical resource allocation process. This plan is discussed further in the “Financial Management Discussion and Analysis” section of this report.
Engaged employees are critical to the OCC’s success. Through ongoing dialogue during 2017, the OCC fostered employee engagement and affirmed its commitment to organizational goals and values. The OCC participated in the annual Federal Employee Viewpoint Survey, using the survey as one engagement measure and tool to assess progress. The OCC once again placed in the top tier of the agency subcomponents category in the “Best Places to Work in the Federal Government” rankings, an assessment of engagement within the federal workforce.
In 2017, the OCC further developed its programs, processes, and curriculum to develop leaders at every level in the agency, receiving national recognition for these efforts. For the second year in a row, Training Magazine rated the OCC among the top 125 organizations in the nation that are “unsurpassed in harnessing human capital.” As the top-rated government agency on the list, the OCC earned the recognition for its financial investment in employee development, the scope of its development program, and the close link between the OCC’s development efforts and its strategic objectives. Additionally, the OCC was recognized for having a best practice in the industry regarding its efforts to create the OCC Leadership Institute and the Leadership Development 101 course.
Performance Measures and Results
The OCC’s FY 2017 performance measures, workload indicators, customer service standards, and results are presented in the table "Performance Measures, Workload Indicators, Customer Service Standards, and Results". They respond to the requirements for most agencies to set goals, measure performance, and report the information to Congress as established in the GPRA Modernization Act.1