DEFINITION of 'Office Of The Comptroller Of The Currency - OCC'

A U.S. federal agency that serves to charter, regulate and supervise the national banks and the federal branches and agencies of foreign banks. The Office of the Comptroller of the Currency (OCC) is headed by the Comptroller of the Currency, who is appointed by the president and approved by the Senate.

BREAKING DOWN 'Office Of The Comptroller Of The Currency - OCC'

Founded through the National Currency Act of 1863, the OCC monitors banks to ensure they are operating safely and meeting all requirements. In particular, the OCC monitors capital, asset quality, management, earnings, liquidity, sensitivity to market risk, information technology, compliance and community reinvestment.

The OCC is an independent bureau within the Department of Treasury. Its mission is to "ensure that national banks and federal savings associations operate in a safe and sound manner, provide fair access to financial services, treat customers fairly, and comply with applicable laws and regulations." The OCC does not receive its funding from Congress. Its main source of financing is derived from national banks and federal savings associations, which pay for their examinations and processing of their corporate applications. The OCC also receives revenue from its investment income, which is primarily from U.S. Treasury securities. Once confirmed by the Senate, the comptroller is scheduled to head the agency for a five-year term. He also serves as director of the Federal Deposit Insurance Corporation (FDIC) and NeighborWorks America.

OCC Structure

There are four district offices as well as an office in London to supervise the international activities of national banks. The staff of bank examiners conducts on-site reviews of national banks and federal savings associations and provides supervision. This is done by analyzing loan/investment portfolios, funds management, capital, earnings, liquidity and sensitivity to market risk for all national banks and federal thrifts. Examiners also review internal controls and compliance with the applicable laws. Management's ability to identify and control risk is evaluated.

Power of the OCC

Aside from examining national banks and federal thrifts, the OCC has the power to approve or deny applications for new charters, branches, capital or other changes in the banking structure. The OCC can take supervisory actions against the banks under its jurisdiction if it determines noncompliance with laws and regulations. Officers and directors may be removed at the OCC's direction. The OCC may also negotiate agreements to change a bank's practices, issue cease and desist orders, and order monetary penalties.

In July 2011, under the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), the Office of the Comptroller assumed the responsibility for the ongoing examination, supervision and regulation of federal savings associations. During the same month, the OCC issued a final rule implementing several provisions of the Dodd-Frank Act, including changes to facilitate the transfer of functions from the Office of Thrift Supervision.

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