Compliance officers at financial institutions are very familiar with MRAs and likely want to avoid them at all costs. So, what exactly is an MRA and why does it often cause alarm?
When it comes to vendor management and regulatory exams, MRA stands for “matter requiring attention” and means that the Office of the Comptroller of the Currency (OCC) has found deficiencies within a bank’s practices. In other words, you need to pay attention and act quickly!
An MRA is issued by a formal written communication to the board and may look like a detailed memo or a portion of a larger report, depending on the complexity and scope of the vendor management deficiency.
In addition to the deficiency, an MRA may detail the expectations and required timelines for acting. For example, it may state “within 90 days of the receipt of this, the board must formally approve a third-party risk management program” and provide future expectations for the next examination.
Keep in mind that MRAs are highly confidential, so don’t share the information with others.
Think of an MRA as a big warning sign that needs to be addressed immediately. If the MRA isn’t prioritized or is ignored altogether, you’ll likely be facing some serious consequences during the next exam. You should expect further discussion on how your organization addressed the concerns so make sure to document the remediating activity in your board-level minutes.
MRAs are generally very detailed and rigid, but it’s important to ask questions if you have any uncertainty on what needs to be done. Additionally, it’s helpful to review the regulatory guidance on the focus of MRAs which can be found in the OCC’s Bank Supervision Process, Comptroller’s Handbook.
To gain a better understanding of different types of MRAs, here’s a list of the top 5 categories noted in the OCC Semiannual Risk Perspective Spring 2021 report:
Receiving an MRA is probably something no one wants to face, but it’s important to address in a timely manner. Failing to correct MRAs can ultimately lead to enforcement actions so act quickly!