On May 24, 2018, the U.S. Office of the Comptroller of the Currency announced the publication of its spring 2018 Semiannual Risk Perspective. The OCC report discusses risks facing national banks and federal savings associations and provides high-level overviews of the economic operating environment, bank performance and trends in supervisory actions. The report highlights key risks in three areas: easing underwriting practices with respect to credit underwriting practices, elevated operational risk, due, in part, to cybersecurity and increased use of third-party service providers, and compliance risk, particularly with respect to high BSA/AML/OFAC compliance risk, changing regulatory landscape and evolving risks outpacing compliance management systems.
The report also focuses on risk that is emerging with respect to rising interest rates and their effect on increased uncertainty in deposits. With respect to trends in supervisory actions, the report notes that the number of banks with composite ratings of 4 or 5 have declined year-over-year through the end of 2017, that the number of outstanding matters requiring attention has been declining over the past few years, and that the number of outstanding enforcement actions has declined since 2010.
The full text of the OCC report is available at: https://assets.publishing.service.gov.uk/government/uploads/system/ uploads/attachment_data/file/708991/Monetary_Penalties_Guidance_web.pdf
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