Cybersecurity, Compliance, Underwriting & Interest Rates Top OCC’s Spring Risk Perspective
Alongside other semiannual regulatory reports, such as the Consumer Financial Protection Bureau’s (CFPB) Spring Supervisory Highlights, the Office of the Comptroller of the Currency (OCC) recently published its Semiannual Risk Perspective for Spring 2015. The report assesses the primary risks facing national banks and federal savings associations based on data and findings in 2014.
The OCC highlights concerns regarding cybersecurity, compliance risks related to mortgage lending and Bank Secrecy Act (BSA)/Anti Money Laundering (AML) requirements, loosening credit standards, growing risk appetites, prolonged low interest rate environments and vulnerable markets, including oil and gas industries. The cybersecurity issue comes as no surprise as Comptroller Thomas Curry listed it as a top priority in the agency’s annual report. One of the other main concerns, however, relates to the convergence of several market factors creating a riskier banking environment. The OCC states, “While traditionally lagging asset quality metrics continue to improve, the OCC is seeing evidence of increasing credit risk within the banking sector. Examiners have observed weak underwriting standards for syndicated leveraged loans, as well as loosening of standards and increased layering of risk in other types of loan products, such as indirect auto lending, asset-based lending (ABL), CRE lending, and C&I lending.”
- OCC Press Release: http://www.occ.gov/news-issuances/news-releases/2015/nr-occ-2015-94.html
- OCC Semiannual Risk Perspective: http://www.occ.gov/publications/publications-by-type/other-publications-reports/semiannual-risk-perspective/semiannual-risk-perspective-spring-2015.pdf