The OCC today released its bank supervision operating plan for fiscal year 2021, identifying what each of the agency’s supervisory operating units will focus on for the new federal fiscal year that started Oct. 1. The OCC said supervision efforts will focus on the pandemic, including commercial and residential real estate concentration risk management, especially in sectors hard hit by COVID-19; compliance risk management associated with pandemic-related bank activities, such as CARES Act loan forbearance requirements; and credit risk management, given projected weaker economic conditions.
The OCC also will focus on cybersecurity and operational resilience; governance over new technology innovation as well as new payment systems products, focusing on new or novel products. The agency added that “For FY 2021, supervision efforts will be flexible to recognize the broad and bank-specific impacts of the pandemic and resulting economic, financial, operational, and compliance implications.”
Other risk areas include Bank Secrecy Act and anti-money laundering compliance management; appropriateness of allowance for loan and lease losses and allowance for credit losses; Community Reinvestment Act performance; the effects of a low-rate environment on banks’ business models; bank preparation for the phaseout of the Libor after 2021; and proper oversight of third-party relationships.