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AML/CFT

OCC Releases Priority Objectives for Fiscal Year 2019

October 22, 2018
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Supervisory Strategy Plans Align with Semi-Annual Risk Perspective

It is that time of year again. As of October 1st, the Office of the Comptroller of the Currency’s (OCC) 2019 fiscal year has begun. With that, they released their annual supervisory strategy plans for the new fiscal year. It aligns with their most recent semi-annual risk perspective issued this past spring so there shouldn't be any big surprises

The agency’s operating plan is what guides the development of supervisory strategies for the banks it regulates. The agency’s different operating units will use this guidance to generate its supervisory plan and resource allocation.

Large banks are not examined in the same way that your community bank is examined. However, the focus points of the agency apply to all banks. For example, the deputy comptrollers over Community Bank Supervision take these operating priorities, scale them to the size and risk profile of the banks it supervises and scope exams accordingly. OCC leaders over Large Bank Supervision will do the same, albeit it at a different scale considering the difference in the size and risk profiles of these institutions (i.e. Bank of America, Chase and Wells Fargo).

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The main risk areas of focus for the fiscal year 2019 are documented as:

  • Cybersecurity and operational resiliency
  • Credit risk
  • BSA/AML compliance
  • Consumer compliance change management
  • Internal controls around product and service delivery

BSA/AML has been a key area of focus for a while and will continue to be one. However, the 2019 supervisory strategy will focus specifically on whether AML compliance programs are keeping pace with changing risk environments and regulatory developments. This was also addressed in the OCC’s Semi-Annual Risk Perspective where they cited concerns around systems that don’t keep pace with evolving threats and resources constraints.

What does this mean to you? BSA/AML is going to be a hot topic again this exam cycle. You can likely expect your examiners to be asking questions around your system’s calibration and whether it is in alignment with your institution’s risk profile. Additionally, they will be looking to confirm you are not managing alert volume to your current staffing constraints and are instead adequately staffed.

As always, if you have questions about the OCC’s objectives for 2019 and how it pertains to your institution, our advisory services team is here to help. With consulting hours or even a system calibration, our team can make sure your BSA program is set up for success.

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