Community Bank Supervision: Comptroller's Handbook

This paper consolidates and updates guidance previously published in two booklets of the Comptroller’s Handbook, “Community Bank Procedures for Noncomplex Banks” and “Community Bank Risk Assessment System,” and generally applies to supervision of national banks with less than USD 1 billion in total assets.

The revised procedures in this booklet should improve examiner focus on areas of risk within a community bank. The result should be more efficient and streamlined examinations. The OCC’s community bank supervision process is designed to:

• Determine the condition of the bank, as well as the levels and trends of the risks; associated with current and planned activities;
• Evaluate the overall integrity and effectiveness of risk management systems by conducting periodic validation;
• Determine compliance with banking laws and regulations;
• Communicate findings, recommendations, and requirements to bank management and directors in a clear and timely manner, and obtain commitments to correct significant deficiencies;
• Verify the effectiveness of corrective actions or, if actions have not been undertaken or accomplished, pursue timely resolution through supervisory or enforcement actions.