ICBA said it supports the OCC’s effort to focus corrective actions on substantive violations rather than immaterial procedural findings, but several aspects of the framework warrant further refinement to help ensure the framework is applied consistently across institutions of all sizes.
Recommendations: In a comment letter on the OCC’s proposed rule to revise the supervisory framework for matters requiring attention, ICBA encouraged the OCC to ensure its final rule:
- Requires multiple violations to establish a pattern or support a finding of systemic violations.
- Removes redundant modifiers from the financial condition category.
- Clarifies that supervisory criticism must be based on institution-specific facts and circumstances, rather than noncompliance with guidance.
Background: The OCC issued the proposal in August alongside an FDIC-OCC final rule designed to focus examiners’ and institutions’ attention on material financial risks and compliance with banking and banking-related laws and regulations.
ICBA View: ICBA has commended the agencies for working to prioritize material financial risks over sometimes-arbitrary supervisory concerns.