WASHINGTON The Office of the Comptroller of the Currency issued new standards on Tuesday for banks that hire independent consultants when under an enforcement action.
The guidance dictates when a bank or thrift under an enforcement action must hire a consultant and whether that work is acceptable to the OCC.
It also details the proper due diligence procedures banks must use in hiring a consultant as well as how to monitor any work performed through a contract. The guidance follows recent regulatory and political controversy over the use of certain consultants after flopped reviews resulted in weaker compliance oversight.
"Properly used, independent consultants can help further important supervisory objectives, particularly in the context of enforcement actions," said Comptroller of the Currency Thomas Curry in a press release. "However, while consultants can provide knowledge, expertise, and additional resources, we must take care to ensure they maintain independence and are subject to appropriate oversight. The standards we are publishing today help us achieve those important objectives while ensuring that a consultant's conclusion is never substituted for the OCC's supervisory oversight."
The OCC cautioned banks that using an independent consultant "does not absolve" the responsibilities of bank management and directors to ensure the bank is in compliance with an enforcement order.
"Moreover, an independent consultant is not a substitute for the supervisory judgment of the OCC," the agency warned.