“Strategic, underwriting, cybersecurity, compliance, and interest rate risks lead the Office of the Comptroller of the Currency’s (OCC) supervisory concerns in its Semiannual Risk Perspective for Fall 2015, released [December 15, 2015]. The report noted that the risks associated with underwriting and cybersecurity are increasing, while strategic, compliance, and interest rate risks remain stable. Highlights from the report include:

• 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 covers risks facing national banks and federal savings associations based on data through June 30, 2015. It presents data in four main areas: the operating environment, bank condition, key risk issues, and regulatory actions. It focuses on issues that pose threats to the safety and soundness of those financial institutions regulated by the OCC and is intended as a resource to the industry, examiners, and the public.”