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Overview: Office of the Comptroller of the Currency

The Comptroller of the Currency is the administrator of national banks and chief officer of the Office of the Comptroller of the Currency (OCC). The OCC supervises more than 2,000 national banks and federal savings associations and about 50 federal branches and agencies of foreign banks in the USA. The Comptroller is also a director of the Federal Deposit Insurance Corporation (FDIC) and NeighborWorks® America.

Appointment

The Comptroller of the currency is a presidential appointment that is subject to Senate advice and consent. The Comptroller is appointed for a five-year term. The current Comptroller is Thomas J. Curry who was sworn in on April 9, 2012.

History

The Office of the Comptroller of the Currency was created as a bureau of the US Department of the Treasury in 1863. Its duty was to organise and administer a system of nationally chartered banks and create a uniform national currency. In 1864, the National Bank Act substantially altered the original bill, expanding upon the basic frameworks already in place and clarifying many of the provisions.

The original short-term purpose of the Act was to raise cash to finance the Civil War. Prospective national bank organisers were required to purchase interest-bearing US government bonds in an amount equal to one-third of their paid-in capital. In the long-term, the purchased bonds were to be deposited with the Treasury and held as security for a new national currency. It was believed that a national currency would assist in creating a sense of nationalism among the citizens at that time.

The Federal Reserve Act of 1913 altered the role of the OCC. It was no longer required to administer the US monetary system, and its duties became primarily an organisation of “national bank examiners charged with … maintaining the safety and soundness of the banks they supervised.” The OCC played a major role in the US reaction to the Great Depression by reviewing banks and deciding which banks could be re-issued with banking licenses.

Current Role

The OCC’s current mission is to “charter, regulate, and supervise all national banks and federal savings associations.” They also “supervise the federal branches and agencies of foreign banks.”

The OCC acquired some of the functions of the Office of Thrift Supervision in July 2011 (along with the Federal Reserve Board and the Federal Deposit Insurance Corporation). The OTS was established in 1989 and was the primary regulator or Federal Savings Associations (or Federal thrifts). The OTS was also supervised Savings and Loan Holding Companies (SLHCs) and some state-chartered institutions. The OCC now has the power to regulate federal thrifts.

Duties of the OCC

In regulating national banks and federal thrifts, the OCC has the power to:

-          Examine the national banks and federal thrifts.

-          Approve or deny applications for new charters, branches, capital, or other changes in corporate or banking structure.

-          Take supervisory action against national banks and federal thrifts that do not comply with laws and regulations or that otherwise engage in unsound practices. Remove officers and directors, negotiate agreements to change banking practices, and issue cease and desist orders as well as civil money penalties.

-          Issue rules and regulations, legal interpretations, and corporate decisions governing investments, lending, and other practices.

The OCC’s activities are based on four objectives that support the agency’s mission to ensure a stable and competitive national system of banks and savings associations:

-          Ensure the safety and soundness of the national system of banks and savings associations.

-          Foster competitions by allowing banks to offer new products and services.

-          Improve the efficiency and effectiveness of OCC supervision, including reducing regulatory burden.

-          Ensure fair and equal access to financial services for all Americans.

Funding

The OCC does not receive any funding from Congress but is primarily funded by assessments on national banks and federal savings associations. National banks and federal thrifts pay for their examinations and for any processing of corporate applications. The OCC also receives revenue from its investment income.

Summary

The Comptroller of the Currency is the administrator of national banks and chief officer of the Office of the Comptroller of the Currency (OCC). The article provides an overview of the history of the OCC as well as its current roles and responsibilities as a banking regulator in the US.

CIPP Exam Preparation

In preparation for the Certified Information Privacy Professional/United States (CIPP/US) exam,  a privacy professional should be comfortable with topics related to this post, including:

  • Comptroller of the Currency (I.A.d.v.2.)
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