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Bank Supervision Process, Comptroller's Handbook

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Bank Supervision Process, Comptroller's Handbook Comptroller’s Handbook Examination Process (EP) RESCINDED Bank Supervision Process Version 1.0, June 2018 This document and any attachments are replaced by version 1.1 of the booklet of the same title published September 2019. Version 1.0 Contents Contents Introduction .......................................................................................................................................... 1 Types of Banks .......................................................................................................................... 2 Federal Branches and Agencies .......................................................................................... 2 Special Purpose Banks ........................................................................................................ 3 Bank Affiliates and Related Organizations ............................................................................... 4 Bank Supervision Organizational Structure, Roles, and Responsibilities ................................. 5 Assistant Deputy Comptroller (Community and Midsize Banks) ...................................... 6 Portfolio Managers and Examiners-in-Charge ................................................................... 7 Community Banks ........................................................................................................ 7 Midsize and Large Banks ............................................................................................. 8 Federal Branches and Agencies ................................................................................... 8 Portfolio Manager and EIC Responsibilities ................................................................ 8 Functional EICs, Team Leaders, and Examination EICs ........................................... 10 SupervisoryRESCINDED Office ............................................................................................................ 10 Examination Authority and Full-Scope, On-Site Examination Requirement .............................. 11 De Novo Banks ....................................................................................................................... 13 Converted Banks ..................................................................................................................... 13 Service Providers ..................................................................................................................... 14 Types of Supervisory Activities .............................................................................................. 14 Full-Scope Examinations .................................................................................................. 14 Ongoing Supervision ........................................................................................................ 15 Target Examinations ......................................................................................................... 15 Specialty Area Considerations ................................................................................................ 15 Information Technology ................................................................................................... 15 Asset Management ............................................................................................................ 16 Bank Secrecy Act/Anti-Money Laundering ..................................................................... 16 Consumer Compliance ...................................................................................................... 17 National Flood Insurance Program ............................................................................. 19 Fair Lending Risk Assessment ................................................................................... 19 Servicemembers Civil Relief Act ............................................................................... 19 Community Reinvestment Act .......................................................................................... 19 Municipal and Government Securities Dealers ................................................................ 20 Assessment of Audit Functions ............................................................................................... 20 12 CFR 363 Annual Report Review ................................................................................. 21 Regulatory Ratings .................................................................................................................. 22 Risk Assessment System ......................................................................................................... 23 Categories of Risk ............................................................................................................. 24 Credit Risk .................................................................................................................. 24 Interest Rate Risk ....................................................................................................... 25 Liquidity Risk ............................................................................................................. 25 Price Risk ................................................................................................................... 25 Operational Risk ......................................................................................................... 26 Compliance Risk ........................................................................................................ 26 Strategic Risk ............................................................................................................. 26 Reputation Risk .......................................................................................................... 27 Relationship Between RAS and Regulatory Ratings ........................................................ 27 Comptroller’s Handbook i Bank Supervision Process Version 1.0 Contents Risk-Based Supervision Approach ................................................................................................... 28 Core Knowledge ...................................................................................................................... 29 Core Assessment ..................................................................................................................... 29 Expanded Procedures .............................................................................................................. 30 Verification Procedures ........................................................................................................... 30 Supervisory Process ................................................................................................................ 30 Planning ............................................................................................................................ 31 Supervisory Strategy .................................................................................................. 31 Examination Planning ................................................................................................ 33 Coordination With Other Regulators ......................................................................... 33 Supervisory Activity Components .................................................................................... 35 Discovery ................................................................................................................... 35 Correction ................................................................................................................... 36 Monitoring .................................................................................................................. 37 Examination Management .......................................................................................... 37 Communication ................................................................................................................. 38 CommunicationRESCINDED During Examinations ....................................................................... 39 Written Communication ............................................................................................. 40 Meetings With Directors ............................................................................................ 41 Documentation .................................................................................................................. 42 OCC’s Supervisory Information Systems .................................................................. 42 Supervisory Actions ........................................................................................................................... 44 Matters Requiring Attention .................................................................................................... 44 Violations of Laws and Regulations........................................................................................ 46 Enforcement Actions ............................................................................................................... 47 Civil Money Penalties ....................................................................................................... 48 Reprimand or Supervisory Letter ............................................................................... 49 Conditions Imposed in Writing ............................................................................................... 49
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