The Office of the Comptroller of the Currency has revised its enforcement and supervisory manuals to align with the joint final rule issued on August 27, 2026, establishing definitive standards for bank supervision and enforcement. According to the final rule, the agencies have defined unsafe or unsound practices as practices, acts, or failures to act that are contrary to generally accepted standards of prudent operation and likely to materially harm the financial condition of a bank or present a material risk of loss to the Deposit Insurance Fund. The OCC released revised PPM 5310-3 and PPM 5400-11 manuals, replacing earlier versions and aligning supervisory practices with the final rule. The revised manuals are designed to keep the OCC's supervisory and enforcement practices consistent with the joint OCC-FDIC framework, with Comptroller Jonathan V. Gould stating that examiners and institutions must prioritize material financial risks and substantive violations over concerns related to policies, process, documentation, and other nonfinancial risks.
The revised enforcement framework establishes that enforcement responses should be proportionate and predictable, with examiners considering financial risk, legal violation and institution's size and complexity when deciding whether formal action is warranted. The tailoring principle links the type and pace of action to bank-specific financial risk factors such as capital structure, complexity, activities and asset size. Under the revised approach, the OCC may escalate to an enforcement action against a large or complex bank based on practices that would not trigger a similar response against a community bank, reflecting increased regulatory and supervisory expectations for larger institutions. The framework generally delays action under section 8 of the Federal Deposit Insurance Act until banks are given remediation opportunities, with examiners issuing MRAs only when practices meet the standard set out in the revised guidance and are tied to financial risk-related factors. The OCC also ends enforcement once substantial compliance is achieved, even if minor isolated requirements remain incomplete, and removes former Appendix C on persistent weaknesses.
The OCC publicly released its Matters Requiring Attention manual for the first time, requiring examiners to tailor MRAs using factors related to financial risk and limiting their issuance to conduct meeting new standards. According to the joint OCC-FDIC final rule, MRAs are supervisory directives requiring banks' boards and management to correct deficient practices, generally not public enforcement orders. The revised PPM 5400-11, "Matters Requiring Attention," directs that MRAs must be tailored based on financial risk-related factors and clarifies that the OCC will only issue an MRA for practices, acts, or failures to act that meet the listed standard. The final rule also establishes supervisory observations - informal communications about weaknesses that do not rise to the level of an MRA, allowing examiners to share expertise with management and boards while leaving implementation decisions to the banks. The revised manual sets procedures for OCC examiners, including how to handle violations of law or regulation, marking the first time PPM 5400-11 is being published publicly.
Under the final rule, the agencies may issue an MRA only for practices, acts, or failures to act that are contrary to generally accepted standards of prudent operation and could reasonably be expected to materially harm the financial condition of a bank or present a material risk of loss to the DIF under current or reasonably foreseeable conditions. The final rule creates a uniform standard for MRA issuance that narrows the scope of practices supporting enforcement actions while permitting proactive risk identification. The agencies may also issue MRAs for practices that have already caused material harm to the financial condition of a bank or constitute actual violations of banking or banking-related laws or regulations. The framework establishes two categories of violations: substantive violations that support enforcement actions and MRAs, and technical violations that do not support enforcement actions but may require remediation without dictating methods or demanding unrelated remediation. The revised manual also clarifies that noncompliance with safety and soundness standards established in 12 CFR 30 is not considered a violation of law for purposes of the manual or the OCC's enforcement authority under 12 USC 1818.
The changes apply to all OCC-supervised national banks, federal savings associations and federal branches, including federally supervised trust banks conducting digital-asset custody, stablecoin reserve management or blockchain settlement. According to reports, the revised framework does not grant banks new crypto powers and does not remove requirements involving capital, liquidity, cybersecurity, sanctions, anti-money-laundering controls or consumer protection. The final rule establishes that an unsafe or unsound practice would also include a practice, act, or failure to act that, if continued, is likely to negatively affect a bank's ability to avoid FDIC receivership and present a material risk of loss to the DIF as a result of the failure. The OCC remains committed to addressing the challenges for its regulated institutions of all sizes and has taken a series of actions to rightsize regulatory burden and tailor supervisory activities to deliver the Administration's vision of Parallel Prosperity for Main Street and Wall Street.
