The Office of the Comptroller of the Currency (OCC) reported strategic, credit, operational, and compliance risks remain top concerns in
Highlights from the report include:
- Strategic risk remains high as banks struggle to execute their strategic plans and face challenges in growing revenue.
- Credit risk is increasing because of strong loan growth combined with easing in underwriting standards. An increase in concentrations and risk layering, continues as banks strive for yield in an increasingly competitive environment. This is particularly evident in indirect auto, commercial and industrial, and commercial real estate.
- Operational risk concerns include increasing cyber threats, reliance on third-party service providers, and resiliency planning.
- Banks face challenges meeting the integrated mortgage disclosure requirements and amended Military Lending Act regulatory requirements, the latter of which takes effect on October 3, 2016, and managing Bank Secrecy Act risks.
- Low energy prices, the potential for rising interest rates, and risks associated with banks partnering with marketplace lending firms are of concern and being monitored, as they may develop into broader system-wide issues.
The report covers risks facing national banks and federal savings associations based on data through December 31, 2015. It presents data in four main areas: the operating environment, bank performance, key risk issues, and regulatory actions. It focuses on issues that pose threats to the safety and soundness of those financial institutions regulated by the OCC and is intended as a resource to the industry, examiners, and the public.