The Office of the Comptroller of the Currency’s (OCC) Committee on Bank Supervision (CBS) recently issued its annual Bank Supervision Operating Plan for FY 2024, which sets forth the OCC’s supervision priorities and objectives across CBS operating units. The Plan also facilitates the execution of supervisory strategies for individual national banks, federal savings associations, and federal branches of agencies of foreign banking organizations (collectively, Banks).
For FY 2024, OCC examiners plan to focus on the impacts of such volatile economic conditions as high inflation, rising interest rates, and continuing recession possibilities as well as consider geopolitical events that may have adverse financial, operational, and compliance implications on the economy.
Consumer compliance: The OCC will focus on a Bank’s compliance risk management systems for new or innovative products, expanded services, and delivery channels offered to consumers or that involve products or services offered through third-party relationships, including those with fintechs or through banking-as-a-service activities.
Supervisory focus may include a Bank’s processes to ensure compliance with statutory requirements prohibiting unfair, deceptive, or abusive acts or practices, including review of risk management practices for overdraft protection programs with features that may present heightened risk such as “authorize positive, settle negative” (APSN) or multiple representment fees.
In April 2023, the OCC issued a bulletin on APSN overdraft and non-sufficient funds fee practices. In July 2023, the OCC entered into a consent order for alleged violations by a bank arising from its representment fee practices. OCC supervisory focus may further consider whether relevant aspects of products or services, including those offered through third-party relationships, are communicated to consumers in a clear and consistent manner, with a concentration on compliance challenges, including fraud and error resolution, in light of increasing use of person-to-person payments.
