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GAO-24-107276 1 (2024-04-30)

handle is hein.gao/gaoqix0001 and id is 1 raw text is: U.S. GOVERNMENT ACCOUNTABILITY OFFICE 441 G St. N.W. Comptroller General Washington, DC 20548 of the United States April 30, 2024 The Honorable Michael J. Hsu Acting Comptroller of the Currency Office of the Comptroller of the Currency 400 7th St. SW Washington, D.C. 20219 Priority Open Recommendations: Office of the Comptroller of the Currency Dear Mr. Hsu: The purpose of this letter is to provide the overall status of the Office of the Comptroller of the Currency's (OCC) implementation of GAO's recommendations and to call your personal attention to open recommendations that should be given high priority.1 In November 2023, we reported that on a government-wide basis, 75 percent of our recommendations made 4 years ago were implemented.2 OCC's recommendation implementation rate was 70 percent. As of April 2024, OCC had nine open recommendations. Fully implementing these open recommendations could significantly improve OCC's efforts to supervise and examine the operations of its chartered banks. In our August 2023 letter, we noted that two of the open recommendations were priority recommendations. Since that time, OCC has not implemented these recommendations. We ask that you continue to direct your attention to these two priority recommendations, which are related to blockchain technology and financial technology (fintech). We are not adding any new priority recommendations this year. (See enclosure for the list of recommendations.) The two priority recommendations fall into the following areas: Blockchain technology. Volatility, bankruptcies, and instances of fraud in the crypto asset markets illustrate the harm consumers and investors may face without adequate protections. We recommended that OCC and other financial regulators jointly establish or adapt an existing formal coordination mechanism to identify and address blockchain-related risks. OCC neither agreed nor disagreed with the recommendation. In February 2024, OCC told us that the Financial Stability Oversight Council (FSOC) and its recently formalized Digital Assets Working Group provide coordination mechanisms to support the collective identification of risks posed by distributed ledger-based products and services. However, FSOC members have been 1Priority recommendations are those that we believe warrant priority attention from heads of key departments or agencies. They are highlighted because, upon implementation, they may significantly improve government operation-for example, by realizing large dollar savings; eliminating mismanagement, fraud, and abuse; or making progress toward addressing a high-risk or duplication issue. 2GAO, Performance and Accountability Report: Fiscal Year 2023, GAO-24-900483 (Washington, D.C.: Nov. 15, 2023). GAO-24-107276 OCC Priority Recommendations Page 1

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