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The Office of the Comptroller of the Currency listed interest rate, underwriting, strategic, compliance, and cybersecurity as the top supervisory concerns in the Semiannual Risk Perspective for Spring 2015. The report noted an overall decline in revenues in profitability for all OCC-supervised institutions. The four main areas of data presented in the report are operating environment, bank condition, key risk issues, and regulatory actions.
The report found that the continued low interest rate environment continues to lay the foundation for the future vulnerability of OCC-regulated financial institutions. Many banks are re-evaluating business models and risk appetites in order to generate returns against the low interest rate backdrop. According to the OCC, compliance risks remain high as banks are preparing to comply with new mortgage lending requirements, particularly those in the TILA-RESPA Integrated Disclosure rule.
Under the Housing and Economic Recovery Act of 2008 requirements, the Federal Housing Finance Agency is obligated to submit an annual report to Congress concerning Fannie Mae’s and Freddie Mac’s guarantee fees. According to the FHFA report, the average level of guarantee fees charged has increased since 2009. The guarantee fees are now two-and-a-half times their previous level from 2009 to 2014. The average fees increased from 22 basis points to 58 basis points from 2009 to 2014 and 51 basis points to 58 basis points from 2013 to 2014.
