Magazine article American Banker

OCC Tries to Ditch Clutter in Exam Reports

Magazine article American Banker

OCC Tries to Ditch Clutter in Exam Reports

Article excerpt

Byline: Ian McKendry

WASHINGTON -- The Office of the Comptroller of the Currency is trying to send a clearer message to banks about potential red flags by clearing away some of the clutter in its exam reports.

Until recently, the agency was grouping both high-priority matters "requiring attention" and lower-priority "recommendations" together in its reports. But officials said that was leading to confusion. As a result, it said it is removing low-level recommendations from reports so that banks can focus on more important MRAs.

"Sometimes the recommendations made it into the report of exam and we've decided that can be confusing and don't want to cloud our message in that regard," Thomas Ramsey, core policy analyst at the OCC, said in an interview. "We want to put things that the board must act on and leave recommendations as a side conversation."

Grovetta Gardineer, deputy comptroller for compliance operations and policy at the OCC, said removing the recommendations from the formal record of examination is "efficiency and communication clarification." But she said that examiners will still let banks know about more minor items that should be addressed.

By removing recommendations from the examination report, the agency is sending a more direct message surrounding compliance deficiencies, which should allow banks to address those problems faster, she said.

"We are looking at making sure that the written record of our examination process really deals with and leaves a path for bank management to understand the difference and distinction between a matter requiring attention that does in-fact require follow-up, but does not necessarily mean that we are going to an enforcement action or if there are actual violations that require a different level attention," said Gardineer.

The change is part of the OCC's push to emphasize the importance of MRAs, which must be addressed promptly by a bank. …

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