OCC and FDIC Finalize Rules Targeting Material Financial Risks in Banks
The OCC and FDIC issued final rules prioritizing supervision on material financial risks for banks.
Why it matters: Legal teams in banking must adapt to the new uniform standards to avoid enforcement risks. The rules clarify unsafe practices and streamline supervisory notices, ensuring sharper focus on financial stability.
- Final rule issued August 27, 2026, effective November 2, 2026, for all OCC- and FDIC-supervised banks.
- Defines 'unsafe or unsound practice' as actions likely to materially harm a bank's financial condition.
- Establishes uniform standards for issuing Matters Requiring Attention (MRAs) and communicating supervisory observations.
- Ends use of Matters Requiring Board Attention (MRBAs) and Supervisory Recommendations (SRs); outstanding ones will be redesignated or closed.
On August 27, 2026, the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) jointly finalized a key supervisory rule emphasizing material financial risks impacting banking institutions.
The rule sets a uniform definition of an "unsafe or unsound practice" as a practice, act, or failure to act that is contrary to generally accepted standards of prudent operation and is likely to materially harm a bank's financial condition or has already done so. This clarity adjusts enforcement actions under 12 U.S.C. 1818 and aligns supervisory activities across these agencies.
Importantly, the agencies also redefined standards around the issuance of Matters Requiring Attention (MRAs), aiming to focus on significant financial risks rather than procedural or documentation issues. Related legacy supervisory tools—Matters Requiring Board Attention (MRBAs) and Supervisory Recommendations (SRs)—will be phased out, with outstanding MRBAs and SRs reviewed to close or redesignate them as MRAs as applicable.
The Federal Reserve is not a party to this rule; however, it is adopting a similar approach by reassessing its own safety-and-soundness supervisory findings to close or downgrade items inconsistent with its evolving framework.
Legal and compliance professionals in banks and financial firms should prepare for implementation starting November 2, 2026, reviewing internal policies and risk management frameworks to comply with these updated regulatory expectations.
By the numbers:
- August 27, 2026 — Final rule issuance date
- November 2, 2026 — Effective date for the rule
- 36 — Number of comments received on the proposed rule