Finserv Glossary

Conflict of Interest (Banking Industry)

What is the Conflict of Interest (Banking Industry)?

The Office of the Controller of the Currency (OCC) – www.occ.gov – is the government agency that  oversees laws relating to bank regulations, and offers definitive guidelines as follows:

Banks providing asset management services may encounter a variety of actual or potential conflicts of interest. Banks acting as fiduciaries must put the interests of account beneficiaries before the interests of the bank.

The OCC offers the following resources for banks, the most important of which is the Handbook. This booklet focuses on evaluating the risks and associated controls over conflicts of interest that may arise in asset management activities. Additionally, this booklet applies to the OCC's supervision of national banks and federal savings associations. References to national banks in this booklet also generally apply to federal branches and agencies of foreign banking organizations. Refer to 12 USC 3102(b) and the "Federal Branches and Agencies Supervision" booklet of the Comptroller's Handbook for more information.

https://www.occ.treas.gov/publications-and-resources/publications/comptrollers-handbook/files/conflicts-of-interest/index-conflicts-of-interest.html

Other useful OCC Bulletins are also available to ensure banks know and follow established rules and regulations.

OCC Bulletin 2015-3, "Conflicts of Interest: Revised Comptroller's Handbook Booklet and Rescissions" (January 14, 2015)

OCC Bulletin 2013-29, "Third-Party Relationships: Risk Management Guidance"(October 30, 2013)

OCC Bulletin 2010-37, "Fiduciary Activities of National Banks: Self-Deposit of Fiduciary Funds" (September 20, 2010)

OCC Bulletin 2010-24, "Incentive Compensation: Interagency Guidance on Sound Incentive Compensation Policies"(June 30, 2010)

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