The OCC on Bank Director Education

Common sense is something all bank directors are expected to possess, bank directors with years of experience seem to be brimming with it. But if you’re a new, or relatively new appointment to a board of directors at a bank, where would you find the information to get you “up to speed” on the common sense needed when it comes to the list of regulations and compliance your bank will face during its next examination?

If you’re a director at a bank regulated by the Office of the Comptroller of the Currency (OCC), you have a full menu of educational options available to get the training and education needed to be the director you need to become. Greg Golembe, Senior Advisor for Banking Relations with the OCC said of the OCC’s training, “We’ve been offering live training, one and two day training classes for many years.” But the focus and intensity of the training the OCC offers is palatable for attendees.

“When you go back to the old days, most director training programs were a couple days in length at a very nice location. The first day was for golf, second day for shopping, and then the third day you got some training in, Golembe explained.

Those days are gone. The focus of our training is to bring directors up to speed in what they really need to know. We make it efficient, and work the attendees straight through a full day, with no tee times in sight.”

The OCC regulates and supervises more than 1,900 national banks and 51 federal branches of foreign banks in the U.S., accounting for about $5.8 trillion or more than 67 percent of the total assets of all U.S. commercial banks. Golembe estimated that a total of 2500 staff from OCC-regulated banks have attended the training classes offered since 2001. The first training program offered then was a basic risk assessment workshop, and based on feedback from participants; a credit risk management program and a subsequent compliance workshop were added. This year the OCC is offering a fourth workshop to round out its classes, a workshop for the new or recently appointed director.

What's the reaction from attendees? “The fact that we’re still putting them on is a testament to the information presented. These are strong, working, focused workshops with hands-on material that can be taken and used immediately at a bank by a director,” he noted.

The OCC plans its workshops to be within driving distance of the banks it regulates. “We’ve found it most attractive to those national banks within driving distance of 200 or 300 miles.” The cap on attendance is 50; with an optimal number of 35 attendees, he explained, “Some of the other current director programs, put 200 in the room and a whole series of people lecture them. We don’t think this is best way to approach this kind of live training. People don’t get a lot out of this style of training.”

Golembe described the setting for OCC’s training as more intimate. “We break the 35 to 50 attendees into groups of 4 to 8 at a table. If three or four directors are sent from same bank, we make sure we break them up; attendees from the same bank aren’t going to sit at same table. This ensures they network and share information with other banks.”

The focus of the OCC training is a lot of exercises and networking, “It’s very ‘hands-on’ and the instructors work directly with the directors on specific cases studies,” he added. One key element of the training is the instructors aren’t just “some trainer” with a little bit of bank experience. “We only use our examiners as instructors. These are very senior people, including senior deputy controllers and assistant deputy controllers, all who have an average of 22 years of experience in the field,” Golembe continued. Not all instructors are assistant deputy controllers, a few are from OCC’s headquarters in Washington, D.C.

“Our instructors are brought in on three year rotations, however, they’re still on their jobs in the field. The OCC’s goal for attendees: To come away with the basic compliance and regulatory knowledge and issues they should be aware of as directors. And with these instructors we’re getting that message through.”

These programs offer national bank directors “the opportunity to sit with very senior national bank examiners, who frankly, if they haven’t seen it all, they’ve seen an awful lot of what happens at a national bank,” Golembe said. The interchange between the instructors and directors really challenges the directors with posed hypothetical situations and “what ifs” the director may not have been exposed to at their bank.

“We start each program with an ice-breaker question and we ask each director, ‘As a national bank director, what keeps you up at night about your bank?’” he explained. At some classes the attendees provide entire lists of issues, and however many are presented; they are all answered within the sessions. Those same lists then are taken back to the OCC where a running list of new or emerging issues is tallied.

“We also benefit from this feedback, we take it back and give to senior bank examiners so they’re aware of what’s on the minds of the banks they’re examining. It’s a two-way street, in terms of value,” he said. Invariably, he added, at least one instructor from every program has said they’ve learned something during the program from attendees.

According to Golembe, there are many drivers behind bank directors seeking better education and training opportunities. “I think that Sarbanes-Oxley and Gramm-Leach-Bliley acts have pushed directors to seek more training. We, and the banking associations, along with other regulatory bodies are also pushing for more education and training, to make sure directors are up to speed on the latest issues. This is a dynamic industry, things are constantly changing and you have to know what is expected.” For information or to register for OCC training online, visit OCC Bank Director Training Conference Schedule..

He pointed to other director training programs from the FDIC and other online training that is available for bank directors. “We consider our training as a specialty option that has limited cost for a bank. We have limited resources, as there are only a certain number of qualified instructors we have. Safety and soundness are our main objectives for all of our national banks and these training programs are one way we are helping banks achieve it.” As with any training program, the information presented is reviewed, renewed and updated. The oldest training program offered by the OCC, the risk assessment program is being reassessed. “We’re taking a hard look at what we’re offering and the value of it,” Golembe noted. The value of the OCC training program hasn’t escaped notice from other banks and interested entities. “We get requests from state banks to attend these training programs. We’re very polite, but we tell them, ‘this is for national banks,’.” He added even state bank commissioners have requested the training. Additionally the OCC has a popular booklet, “Detecting Red Flags In Board Reports,”“Detecting Red Flags In Board Reports,” that is the single most requested document in their library of training material.

The OCC also offers telephone seminars, “which have their place in our training. The telephone seminars are a low cost way to serve our community. Attendance at those has been incredible, since 2000 we’ve had more than 30,000 attend.” The OCC also has exhibit booths at both national and state conventions to get the message out. “At one convention, a group of state banks came by our booth, saw our director training material and said, ‘We don’t have anything like this,’ and literally cleaned us out of everything, they took all of our booklets,’” Golembe recalled.

Two keys for the OCC in the director training programs he concluded “We constantly reemphasize that our examiners are a resource. They aren’t to be feared. They’re not out to play ‘gotcha.’ A safe, sound, profitable bank should be the goal of everyone involved and this is in everyone’s best interest.

We tell our banks, ‘Got a question? Call your portfolio manager, (the examiner in charge) and if you don’t get what you need from them, call their assistant deputy controller. We have the resources and offer an active examination program for our banks. We don’t conduct an exam and then come back in one year or 18 months later to do another exam. Every one of our banks gets a call from its ADC at least once a quarter, just to talk.

Sometimes it is to follow up on open items, or a new business they’re offering. ADCs will come out to them, sit down and talk,” he concluded.

About the Author

Linda McGlasson

Linda McGlasson

Managing Editor

Linda McGlasson is a seasoned writer and editor with 20 years of experience in writing for corporations, business publications and newspapers. She has worked in the Financial Services industry for more than 12 years. Most recently Linda headed information security awareness and training and the Computer Incident Response Team for Securities Industry Automation Corporation (SIAC), a subsidiary of the NYSE Group (NYX). As part of her role she developed infosec policy, developed new awareness testing and led the company's incident response team. In the last two years she's been involved with the Financial Services Information Sharing Analysis Center (FS-ISAC), editing its quarterly member newsletter and identifying speakers for member meetings.

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