The Office of the Comptroller of the Currency (OCC) released its Semiannual Risk Perspective Report providing OCC supervisory concerns. Leading concerns are strategic, underwriting, cybersecurity, compliance and interest rate risks.
Highlights included in the report are:
- Many national banks and federal savings associations continue to face strategic challenges to growing revenues to meet target rates of return in a slow-growth, low interest rate environment.
- Banks and thrifts are easing credit underwriting standards and practices, including structure, terms, pricing, collateral, guarantors, and loan controls in response to competitive pressures and growth objectives. This easing is particularly evident in high-growth loan segments, such as indirect auto, commercial and industrial, and multifamily.
- The ongoing low interest rate environment poses additional concerns as banks reach for yield by loosening underwriting and extending asset duration trends.
- Cyber threats, reliance on service providers, and resiliency planning remain industry concerns, particularly in light of increasing global threats.
- Bank Secrecy Act risk continues to increase as criminal behaviors and technology use evolve.
The report is a good resource to use when evaluation the credit union’s risk, and identifying mitigation strategies.
