The OCC recently released their Spring 2020 Semiannual Risk Perspective. While a majority of the data is as of December 31, 2019, the bulk of the comments and analysis encompasses the effects of the COVID-19 pandemic.
As it relates to compliance, risk is increasing, and the increase is driven by COVID-19. As banks encountered reduced operations, employees teleworking, and a rapidly changing customer service environment; they were also expected to support customers via the CARES Act, process high volumes of PPP applications quickly, and implement a variety of forbearance and deferred payment programs.
Banks are Stronger Than They Have Ever Been
The good news is that prior to this economic downturn, banks were the strongest they’ve been for some time. Matters requiring attention (MRA) and banks rated 4 and 5 were at 10-year lows. This allowed banks to be a source of strength for their customers.
The Risk Perspective highlighted the Bank Secrecy Act (BSA), and specifically addressed criminals adapting scams and money laundering techniques to exploit vulnerabilities created by the pandemic. We addressed this in more depth in our blog. It also addressed the transition away from the London InterBank Offered Rate (LIBOR) which we will tackle in our August 2020 Magazine.
Clarifying BSA Regulatory and Risk Management Exceptions
Finally, the OCC reiterated their previous statements clarifying BSA regulatory and risk management expectations recognizing that there may be reasonable delays in meeting compliance obligations during the pandemic. While banks are being granted grace in terms of timeliness, it is important to note that this guidance does not remove or lessen BSA compliance expectations.
We are Here to Help
As we’re maybe beginning to see a light at the end of the tunnel, the economy is reopening, and banking returning to a “new normal”, know that we are here to support you. We know this has been difficult, that compliance programs have been stressed to the max, and that all of us are crossing our fingers that things were done correctly so we won’t find ourselves redoing them later. We offer services from pre- and post-closing reviews, compliance reviews, phone and email support, etc. We can bring you peace of mind by reviewing and identifying any concerns now so that you can fix them prior to your next exam.
Micaela joined Banker’s Compliance Consulting with over 10 years of experience in the banking industry on what she likes to consider nearly all sides of the table. Her retail banking experience includes being a teller, personal banker, financial intern, and accounting specialist within a midsize and large bank and the Farm Credit System. She was also an OCC examiner for six years.
Micaela has a Bachelor’s Degree in Financial Markets, Investment Science & Portfolio Management, and Management from the University of Nebraska Omaha and a Master’s Degree in Organizational Leadership from the College of Saint Mary. She is also a Certified Anti-Money Laundering Specialist (CAMS). Micaela thoroughly enjoys compliance and BSA regulations, especially when she is helping others to navigate through them, which makes BCC an excellent fit.
Micaela loves to spend her free time with her family, especially husband Brian and daughter Jocelyn, and any other kiddos they may be blessed with at any given time. Micaela and Brian are passionate about adoption and will hopefully soon be blessed with the opportunity to adopt siblings through the foster care system. She is active in her faith, her community, and enjoys traveling, being outside, and squeezing in running and hiking (ideally extreme and in faraway places) with friends.