Higher Expectations for Community Banks In Extraordinary Circumstances

On April 10, 2014, Comptroller of the Currency Thomas J. Curry presented remarks concerning risk management and related corporate governance issues before the American Bankers Association Risk Management Forum.  Comptroller Curry focused his presentation on the OCC’s “heightened expectations” for risk management and corporate governance.  He stated that the OCC’s “heightened expectations” program applies exclusively to large, complex banks, i.e., those with consolidated total assets of $50 billion or more (“Large Banks”).”

In his remarks, Comptroller Curry responded to community banks’ concerns that the heightened expectation program would only apply to a bank with less than $50 billion in consolidated assets “in extraordinary circumstances,” i.e., if the OCC determined that the bank’s operations were highly complex or present a heightened risk.  News outlets have recently reported that the OCC is reviewing the public comments on its proposed heightened expectation program and is expected to tweak it by clarifying that the guidelines are not intended to apply to smaller banks and on providing some assurance to bank directors that, although they are expected to oversee their bank’s compliance performance, they are not required by the OCC to “ensure” their bank’s compliance with applicable regulations.

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