OCC Issues Annual Report for 2022

The Office of the Comptroller of the Currency (OCC) has published its Annual Report 2022 which primarily informs of the current condition of the federal banking system, the key priorities of the regulator for both the past reporting period and the upcoming one, and of the key actions taken by the regulator to accomplish its goals.
As far as the condition of the banking system is concerned, the OCC notes the increasing risks resulting from high inflation levels and rising interest rates. Additionally, some banks are maneuvering around remnants from the COVID-19 pandemic in terms of adjusting to different market conditions and the phasing out of government programs. Furthermore, especially since the onset of the unjustified war against Ukraine by Russia, are financial institutions faced with a high degree of cyber security risks. Nonetheless, the U.S. banking system overall remains highly resilient, so the OCC.
As far as the OCC’s priorities are concerned, the OCC notes that it primarily focused and will continue to focus on the following key issues:
– the enhancement of cyber resilience (e.g. via the introduction of a new rule to require notification of cyber security incidents);
– the transition to alternative reference rates to accommodate the termination of the London InterBank rate (LIBOR) by issuing corresponding reminders to the industry;
– the improvement of access to banking services especially by minorities via the modification of the Communities Reinvestment Act;
– the facilitation of financial innovation and digitization;
– the further adaptation to crypto-assets by providing banking guidance as to engagements in any crypto-asset activities; and
– the enhancement of risk management processes of banks as regards climate change risks. In this context the regulator particular notes its Principles for Climate-Related Financial Risk Management for Large Banks that it has published for public comment in December 2021.
To view general administration activities and enforcement actions of the regulator in the past year, please refer to the report itself.