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Board Report: 2013-IE-B-003 March 27, 2013

Status of the Transfer of Office of Thrift Supervision Functions

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Results of the Joint Review

We concluded that procedures and safeguards as outlined in the Plan to ensure that transferred OTS employees are not unfairly disadvantaged were in place and maintained during this 6-month reporting period. Following is an update to certain open items discussed in our September 2012 report.

Additional OCC Certification for Certain Transferred OTS Examiners

In our prior reports, we identified that former OTS officials and employees had expressed concerns related to OCC plans for requiring additional certification for certain transferred OTS examiners before they would be able to supervise national bank examinations.4 We reported that OCC had contracted with a consultant who identified differences between the OTS examiner accreditation process and the OCC Uniform Commission Examination (UCE) process. We also reported that the consultant was validating the UCE. In this regard, the consultant was analyzing the duties of OCC's recently revised National Bank Examiner (NBE) position5 to determine whether necessary changes were incorporated in the UCE. The consultant, in collaboration with OCC, validated the revised UCE on April 12, 2012.

As an open item, we previously reported that OCC contracted with the same consultant in October 2011 to assist in developing an alternative qualification process for certain OTS examiners to acquire the NBE commission without taking the full UCE; one that would take the examiner's experience into consideration. This alternative process was to also include a process to certify existing NBEs as qualified to lead examinations of federal savings associations. As an update, we found that the consultant has completed its study and that OCC implemented the alternative qualification process and the revised UCE on January 14, 2013, and January 28, 2013, respectively.

The alternative qualification process addresses the gaps between the testing processes used to award the OCC NBE and OTS Federal Thrift Regulator (FTR) credentials. Specifically, it addresses the differences between national banks and federal savings associations for examination purposes. To address these gaps, OCC designed two cross-certification tests, one for NBEs to demonstrate competency with federal savings associations examinations and one for FTRs to demonstrate competency with national bank examinations. As an additional requirement for the NBE credentials, FTRs are required to complete a loan exercise that was part of the legacy UCE but not part of the legacy FTR testing program. The cross-certification tests were developed by a team that included both OCC and former OTS examiners.

FRB Supervisory Assessments

As previously reported, for savings and loan holding companies and bank holding companies with consolidated assets of $50 billion or more, and nonbank financial companies that FRB is required to supervise pursuant to the Dodd-Frank Act, FRB is to collect assessments, fees, or other charges equal to the expenses FRB estimates are necessary or appropriate to carry out its supervisory and regulatory responsibilities. To address this requirement, we reported in September 2012 that a notice of proposed rulemaking for the assessments, fees, and other charges was under review and expected to be available for public comment in the fourth quarter of 2012. As an update, the notice of proposed rulemaking is still under review and is expected to be published in the first quarter of 2013. The collection of assessments, fees, and other charges is anticipated to begin in 2013.

  • 4. FDIC did not require additional certification for transferred OTS examiners before they were able to supervise FDIC-regulated bank examinations.  Return to text
  • 5. National Bank Examiners certified under the new UCE are qualified to supervise both national banks and federal savings associations.  Return to text