GAO Evaluates OCC Oversight of Banks' Fair Lending Practices

In a new report, GAO evaluated the efficiency of the OCC's oversight of fair lending practices among OCC-supervised banks and made recommendations as to how the OCC can address potential deficiencies.

GAO reviewed OCC data and documents for 15 fair lending examinations and determined that the OCC examiners (i) did not "account for new statistical methods used to analyze redlining" and (ii) followed some procedures inconsistently. Further, GAO found that the OCC did not consider the impacts that changes to the examination process had on the efficacy of its evaluations. GAO also noted three examinations that concluded that the banks might have engaged in redlining.

GAO recommended that the OCC (i) take into account new types of analysis when updating the redlining examination procedures and (ii) establish time frames for executing its plan to track information on midsize and community bank fair lending examination outcomes.

The OCC responded that it planned to (i) "update the OCC examiner handbook applicable to redlining examinations and develop examiner training" and (ii) establish a centralized process and procedures to "collect and monitor information on fair lending activities, including examination selection decisions and examination outcomes."