Notice2023-27294
Agency Information Collection Activities: Information Collection Renewal; Comment Request; OCC Guidelines Establishing Heightened Standards for Certain Large Insured National Banks, Insured Federal Savings Associations, and Insured Federal Branches
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
December 13, 2023
Issuing agencies
Treasury DepartmentComptroller of the Currency
Abstract
The OCC, as part of its continuing effort to reduce paperwork and respondent burden, invites comment on a continuing information collection, as required by the Paperwork Reduction Act of 1995 (PRA). In accordance with the requirements of the PRA, the OCC may not conduct or sponsor, and the respondent is not required to respond to, an information collection unless it displays a currently valid Office of Management and Budget (OMB) control number. The OCC is soliciting comment concerning the renewal of its information collection titled, "OCC Guidelines Establishing Heightened Standards for Certain Large Insured National Banks, Insured Federal Savings Associations, and Insured Federal Branches."
Full Text
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<title>Federal Register, Volume 88 Issue 238 (Wednesday, December 13, 2023)</title>
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[Federal Register Volume 88, Number 238 (Wednesday, December 13, 2023)]
[Notices]
[Pages 86445-86447]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-27294]
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DEPARTMENT OF THE TREASURY
Office of the Comptroller of the Currency
Agency Information Collection Activities: Information Collection
Renewal; Comment Request; OCC Guidelines Establishing Heightened
Standards for Certain Large Insured National Banks, Insured Federal
Savings Associations, and Insured Federal Branches
AGENCY: Office of the Comptroller of the Currency (OCC), Treasury.
ACTION: Notice and request for comment.
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SUMMARY: The OCC, as part of its continuing effort to reduce paperwork
and respondent burden, invites comment on a continuing information
collection, as required by the Paperwork Reduction Act of 1995 (PRA).
In accordance with the requirements of the PRA, the OCC may not conduct
or sponsor, and the respondent is not required to respond to, an
information collection unless it displays a currently valid Office of
Management and Budget (OMB) control number. The OCC is soliciting
comment concerning the renewal of its information collection titled,
``OCC Guidelines Establishing Heightened Standards for Certain Large
Insured National Banks, Insured Federal Savings Associations, and
Insured Federal Branches.''
DATES: Comments must be received by February 12, 2024.
ADDRESSES: Commenters are encouraged to submit comments by email, if
possible. You may submit comments by any of the following methods:
<bullet> Email: <a href="/cdn-cgi/l/email-protection#d9a9abb8b0b7bfb699b6babaf7adabbcb8aaf7beb6af"><span class="__cf_email__" data-cfemail="dfafadbeb6b1b9b09fb0bcbcf1abadbabeacf1b8b0a9">[email protected]</span></a>.
<bullet> Mail: Chief Counsel's Office, Attention: Comment
Processing, Office of the Comptroller of the Currency, Attention: 1557-
0321, 400 7th Street SW, Suite 3E-218, Washington, DC 20219.
<bullet> Hand Delivery/Courier: 400 7th Street SW, Suite 3E-218,
Washington, DC 20219.
<bullet> Fax: (571) 293-4835.
Instructions: You must include ``OCC'' as the agency name and
``1557-0321'' in your comment. In general, the OCC will publish
comments on <a href="http://www.reginfo.gov">www.reginfo.gov</a> without change, including any business or
personal information provided, such as name and address information,
email addresses, or phone numbers. Comments received, including
attachments and other supporting materials, are part of the public
record and subject to public disclosure. Do not include any information
in your comment or supporting materials that you consider confidential
or inappropriate for public disclosure.
Following the close of this notice's 60-day comment period, the OCC
will publish a second notice with a 30-day comment period. You may
review comments and other related materials that pertain to this
information collection beginning on the date of publication of the
second notice for this collection by the method set forth in the next
bullet.
<bullet> Viewing Comments Electronically: Go to <a href="http://www.reginfo.gov">www.reginfo.gov</a>.
Hover over the ``Information Collection Review'' tab and click on
``Information Collection Review'' from the drop-down menu. From the
``Currently under Review'' drop-down menu, select ``Department of the
Treasury'' and then click ``Submit.'' This information collection can
be located by searching OMB control number ``1557-0321'' or ``OCC
Guidelines Establishing Heightened Standards for Certain Large Insured
National Banks, Insured Federal Savings Associations, and Insured
Federal Branches.'' Upon finding the appropriate information
collection, click on the related ``ICR Reference Number.'' On the next
screen, select ``View Supporting Statement and Other Documents'' and
then click on the link to any comment listed at the bottom of the
screen.
<bullet> For assistance in navigating <a href="http://www.reginfo.gov">www.reginfo.gov</a>, please
contact the Regulatory Information Service Center at (202) 482-7340.
FOR FURTHER INFORMATION CONTACT: Shaquita Merritt, Clearance Officer,
(202) 649-5490, Chief Counsel's Office, Office of the Comptroller of
the Currency, 400 7th Street SW, Washington, DC 20219. If you are deaf,
hard of hearing, or have a speech disability, please dial 7-1-1 to
access telecommunications relay services.
SUPPLEMENTARY INFORMATION: Under the PRA (44 U.S.C. 3501 et seq.),
Federal agencies must obtain approval from the OMB for each collection
of information that they conduct or sponsor. ``Collection of
information'' is defined in 44 U.S.C. 3502(3) and 5 CFR 1320.3(c) to
include agency requests or requirements that members of the public
submit reports, keep records, or provide information to a third party.
Section 3506(c)(2)(A) of title 44 generally requires Federal agencies
to provide a 60-day notice in the Federal Register concerning each
proposed collection of information, including each proposed extension
of an existing collection of information, before submitting the
collection to OMB for approval. To comply with this requirement, the
OCC is publishing notice of the renewal/revision of this collection.
Title: OCC Guidelines Establishing Heightened Standards for Certain
Large Insured National Banks, Insured Federal Savings Associations, and
Insured Federal Branches.
OMB Control No.: 1557-0321.
Description: The OCC's guidelines, codified in 12 CFR part 30,
appendix D, establish minimum standards for the design and
implementation of a risk governance framework for insured national
banks, insured Federal savings associations, and insured Federal
branches of a foreign bank (banks). The guidelines apply to covered
banks. A covered bank is a bank with average total consolidated assets:
(i) equal to or greater than $50 billion; (ii) less than $50 billion if
that bank's parent company controls at least one insured national bank
or insured Federal savings association that has average total
consolidated assets of $50 billion or greater; or (iii) less than $50
billion, if the OCC determines such bank's operations are highly
complex or otherwise present a heightened risk as
[[Page 86446]]
to warrant the application of the guidelines. The guidelines also
establish minimum standards for a board of directors in overseeing the
framework's design and implementation. These guidelines were finalized
on September 11, 2014.\1\ The OCC is now seeking to renew the
information collection associated with these guidelines. The standards
contained in the guidelines are enforceable under section 39 of the
Federal Deposit Insurance Act (FDIA),\2\ which authorizes the OCC to
prescribe operational and managerial standards for insured national
banks, insured Federal savings associations, and insured Federal
branches of a foreign bank.
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\1\ 79 FR 54518.
\2\ 12 U.S.C. 1831p-1. Section 39 was enacted as part of the
Federal Deposit Insurance Corporation Improvement Act of 1991,
Public Law 102-242, section 132(a), 105 Stat. 2236, 2267-70.
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The guidelines formalize the OCC's heightened expectations program.
The guidelines also further the goal of the Dodd-Frank Wall Street
Reform and Consumer Protection Act of 2010 to strengthen the financial
system by focusing management and boards of directors on improving and
strengthening risk management practices and governance, thereby
minimizing the probability and impact of future financial crises. The
standards for the design and implementation of the risk governance
framework, which contain collections of information, are as follows:
Standards for Risk Governance Framework
Covered banks should establish and adhere to a formal, written risk
governance framework designed by independent risk management. The
framework should include delegations of authority from the board of
directors to management committees and executive officers and risk
limits for material activities. The framework should be approved by the
board of directors or the board's risk committee, and it should be
reviewed and updated, at least annually, by independent risk
management.
Front Line Units
Front line units should take responsibility and be held accountable
by the chief executive officer (CEO) and the board of directors for
appropriately assessing and effectively managing all of the risks
associated with their activities. In fulfilling this responsibility,
each front line unit should, either alone or in conjunction with
another organizational unit that has the purpose of assisting a front
line unit: (i) assess, on an ongoing basis, the material risks
associated with its activities and use such risk assessments as the
basis for fulfilling its responsibilities and for determining if
actions need to be taken to strengthen risk management or reduce risk
given changes in the unit's risk profile or other conditions and (ii)
establish and adhere to a set of written policies that include front
line unit risk limits. Such policies should ensure risks associated
with the front line unit's activities are effectively identified,
measured, monitored, and controlled, consistent with the covered bank's
risk appetite statement, concentration risk limits, and all policies
established within the risk governance framework. Front line units
should also establish and adhere to procedures and processes, as
necessary to maintain compliance with the policies described in (ii).
Front line units should furthermore adhere to all applicable policies,
procedures, and processes established by independent risk management.
Front line units should also develop, attract, and retain talent and
maintain staffing levels required to carry out the unit's role and
responsibilities effectively; establish and adhere to talent management
processes; and establish and adhere to compensation and performance
management programs.
Independent Risk Management
Independent risk management should oversee the covered bank's risk-
taking activities and assess risks and issues independent of the front
line units. In fulfilling these responsibilities, independent risk
management should: (i) take responsibility and be held responsible by
the CEO and the board of directors for designing a comprehensive
written risk governance framework that meets the guidelines and is
commensurate with the size, complexity, and risk profile of the covered
bank; (ii) identify and assess, on an ongoing basis, the covered bank's
material aggregate risks and use such risk assessments as the basis for
fulfilling its responsibilities and for determining if actions need to
be taken to strengthen risk management or reduce risk given changes in
the covered bank's risk profile or other conditions; (iii) establish
and adhere to enterprise policies that include concentration risk
limits that state how aggregate risks within the covered bank are
effectively identified, measured, monitored, and controlled, consistent
with the covered bank's risk appetite statement and all policies and
processes established within the risk governance framework; (iv)
establish and adhere to procedures and processes, as necessary, to
ensure compliance with policies in (iii); (v) identify and communicate
to the CEO and either the board of directors or the board's risk
committee any material risks and significant instances where the
independent risk management's assessment of risk differs from that of a
front line unit and any significant instances where a front line unit
is not adhering to the risk governance framework; (vi) identify and
communicate to the board of directors or the board's risk committee
material risks and significant instances where independent risk
management's assessment of risk differs from that of the CEO and
significant instances where the CEO is not adhering to, or not holding
front line units accountable for adhering to, the risk governance
framework; and (vii) develop, attract, and retain talent and maintain
the staffing levels required to carry out the unit's role and
responsibilities effectively while establishing and adhering to talent
management processes and compensation and performance management
programs.
Internal Audit
Internal audit should ensure that the covered bank's risk
governance framework complies with the guidelines and is appropriate
for the size, complexity, and risk profile of the covered bank. It
should maintain a complete and current inventory of all of the covered
bank's material processes, product lines, services, and functions and
assess the risks, including emerging risks, associated with each. These
risks collectively provide a basis for the audit plan. Internal audit
should establish and adhere to an audit plan that: (i) is periodically
reviewed and updated; (ii) takes into account the covered bank's risk
profile, emerging risks, and issues; and (iii) establishes the
frequency with which activities should be audited. The audit plan
should require internal audit to evaluate the adequacy of and
compliance with policies, procedures, and processes established by
front line units and independent risk management under the risk
governance framework. Significant changes to the audit plan should be
communicated to the board's audit committee. Internal audit should
report, in writing, conclusions, material issues, and recommendations
from audit work carried out under the audit plan to the board's audit
committee. Reports should identify the root cause of any material
issues and include: (i) a determination of whether the root cause
creates an issue that has an impact on one or more organizational units
within the covered bank; and (ii) a determination of the effectiveness
of
[[Page 86447]]
front line units and independent risk management in identifying and
resolving issues in a timely manner. Internal audit should establish
and adhere to processes for independently assessing the design and
ongoing effectiveness of the risk governance framework on at least an
annual basis. The independent assessment should include a conclusion on
the covered bank's compliance with the standards set forth in the
guidelines. Internal audit should identify and communicate to the
board's audit committee significant instances where front line units or
independent risk management are not adhering to the risk governance
framework. Internal audit should establish a quality assurance program
that ensures internal audit's policies, procedures, and processes: (i)
comply with applicable regulatory and industry guidance; (ii) are
appropriate for the size, complexity, and risk profile of the covered
bank; (iii) are updated to reflect changes to internal and external
risk factors, emerging risks, and improvements in industry internal
audit practices; and (iv) are consistently followed. Internal audit
should develop, attract, and retain talent and maintain staffing levels
required to effectively carry out its role and responsibilities.
Internal audit should establish and adhere to talent management
processes and compensation and performance management programs that
comply with the guidelines.
Strategic Plan
The CEO, with input from front line units, independent risk
management, and internal audit, should be responsible for the
development of a written strategic plan that covers, at a minimum, a
three-year period. The board of directors should evaluate and approve
the plan and monitor management's efforts to implement the strategic
plan at least annually. The plan should: (i) include a comprehensive
assessment of risks that currently impact the covered bank or that
could have an impact on the covered bank during the period covered by
the strategic plan; (ii) articulate an overall mission statement and
strategic objectives for the covered bank with an explanation of how
the covered bank will update the risk governance framework to account
for changes to its risk profile projected under the strategic plan; and
(iii) be reviewed, updated, and approved due to changes in the covered
bank's risk profile or operating environment that were not contemplated
when the plan was developed.
Risk Appetite Statement
A covered bank should have a comprehensive written statement that
articulates its risk appetite and serves as the basis for the risk
governance framework. The statement should contain both qualitative
components that describe a safe and sound risk culture and how the
covered bank will assess and accept risks and quantitative limits that
include sound stress testing processes and address earnings, capital,
and liquidity.
Risk Limit Breaches
A covered bank should establish and adhere to processes that
require front line units and independent risk management to: (i)
identify breaches of the risk appetite statement, concentration risk
limits, and front line unit risk limits; (ii) distinguish breaches
based on the severity of their impact; (iii) establish protocols for
when and how to inform the board of directors, front line unit
management, independent risk management, internal audit, and the OCC
regarding a breach; (iv) provide a written description of the breach
resolution; and (v) establish accountability for reporting and
resolving breaches that include consequences for risk limit breaches
that take into account the magnitude, frequency, and recurrence of
breaches.
Concentration Risk Management
The risk governance framework should include policies and
supporting processes appropriate for the covered bank's size,
complexity, and risk profile for effectively identifying, measuring,
monitoring, and controlling the covered bank's concentrations of risk.
Risk Data Aggregation and Reporting
The risk governance framework should include a set of policies,
supported by appropriate procedures and processes, designed to provide
risk data aggregation and reporting capabilities appropriate for the
covered bank's size, complexity, and risk profile and to support
supervisory reporting requirements. Collectively, these policies,
procedures, and processes should provide for: (i) the design,
implementation, and maintenance of a data architecture and information
technology infrastructure that support the covered bank's risk
aggregation and reporting needs during normal times and during times of
stress; (ii) the capturing and aggregating of risk data and reporting
of material risks, concentrations, and emerging risks in a timely
manner to the board of directors and the OCC; and (iii) the
distribution of risk reports to all relevant parties at a frequency
that meets their needs for decision-making purposes.
Talent and Compensation Management
A covered bank should establish and adhere to processes for talent
development, recruitment, and succession planning. The board of
directors or appropriate committee should review and approve a written
talent management program. A covered bank should also establish and
adhere to compensation and performance management programs that comply
with any applicable statute or regulation.
Board of Directors Training and Evaluation
The board of directors of a covered bank should establish and
adhere to a formal, ongoing training program for all directors. The
board of directors should also conduct an annual self-assessment.
Type of Review: Regular.
Affected Public: Businesses or other for-profit.
Estimated Number of Respondents: 27.
Estimated Burden per Respondent: 3,776 hours.
Estimated Total Annual Burden: 101,952 hours.
Comments submitted in response to this notice will be summarized
and included in the request for OMB approval. All comments will become
a matter of public record. Comments are invited on:
(a) Whether the collection of information is necessary for the
proper performance of the functions of the OCC, including whether the
information has practical utility;
(b) The accuracy of the OCC's estimate of the burden of the
collection of information;
(c) Ways to enhance the quality, utility, and clarity of the
information to be collected;
(d) Ways to minimize the burden of the collection on respondents,
including through the use of automated collection techniques or other
forms of information technology; and
(e) Estimates of capital or start-up costs and costs of operation,
maintenance, and purchase of services to provide information.
Patrick T. Tierney,
Assistant Director, Bank Advisory, Office of the Comptroller of the
Currency.
[FR Doc. 2023-27294 Filed 12-12-23; 8:45 am]
BILLING CODE 4810-33-P
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</html>Indexed from Federal Register on December 13, 2023.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.