Alert June 18, 2013

OCC Issues Booklet Providing Guidance to Boards and Management of Community Banks Concerning Certain Banking Best Practices

The OCC issued a booklet, “A Common Sense Approach to Community Banking” (the “Booklet”) designed to provide guidance to Boards of Directors and management of community banks concerning banking best practices and how management officials can guide a community bank “through economic cycles and environmental changes.”  The Booklet discusses how a community bank can appropriately identify, monitor and manage various types of risks.  The OCC describes its Risk Assessment System and how it can best be used by community banks.  The Booklet also emphasizes the need for a community bank to have a sound business plan with sufficient capital support that is based on an effective strategic planning process.  Finally, the Booklet provides community bankers with an overview of the OCC’s supervisory process and the key role of the OCC’s portfolio manager for the applicable community bank.