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OCC Bulletin 2025-24 | October 6, 2025
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Chief Executive Officers of All National Banks, Federal Savings Associations, and Federal Branches and Agencies; Department and Division Heads; All Examining Personnel; and Other Interested Parties
Effective January 1, 2026, the Office of the Comptroller of the Currency (OCC) is updating its policies to eliminate mandatory examination activities not required by statute or regulation to reduce supervisory burden for community banks.1 OCC community bank examiners will continue to apply risk-based supervision, with a heightened focus on material financial risks. This approach will maintain the value of the federal charter and preserve banks’ safety and soundness while ensuring regulatory oversight does not unduly distract banks from serving their communities. The OCC will continue to review its examination processes and will update the relevant booklets of the Comptroller’s Handbook and other documents as soon as practicable.
This guidance is applicable to all community banks.
The OCC recognizes the vital role that community banks serve in meeting the needs of their communities. Most community banks are well capitalized and well managed, conduct business in a safe and sound manner, and engage in low-risk activities.
The OCC is required by statute and regulation to conduct a full scope, on site examination of every bank every 12 to 18 months, in what is referred to as the supervisory cycle.2 In implementing this requirement and fulfilling its mission in ensuring the safe and sound operation of banks under its supervision, the OCC has long strived to apply risk-based supervision in its examination of banks of all sizes.3 However, in practice, the OCC has continued to require certain examination activities with predefined scope and frequency set by OCC policy.
The OCC is reaffirming its commitment to risk-based supervision, and it will tailor its supervisory activities for community banks to each bank’s size, complexity, and risk profile. To align with risk-based supervision, effective January 1, 2026, the OCC is removing for community banks all requirements for examination activities set by OCC policy. Instead, in fulfilling its responsibility for conducting a full scope, on-site examination during each supervisory cycle, OCC examiners will tailor their examination of a community bank’s specific activities in light of its size, complexity, and risk profile, with heightened focus on material financial risks. Examiners will retain their discretion to conduct, as appropriate, supervisory activities beyond those required by statute, consistent with a bank’s size, complexity, risk profile, and the risks posed by the bank’s specific activities.
This change will reduce regulatory burden on community banks and simplify requests made by examiners. For example, OCC policy currently requires examiners to perform a fair lending risk assessment during every supervisory cycle and perform transaction testing for flood insurance coverage once during every three supervisory cycles.4 (Refer to the appendix to this bulletin for a table of OCC examination and activities set by policy.) By eliminating these requirements, examiners will no longer be required to collect information or perform these activities. Similarly, in examining a bank’s compliance with flood insurance requirements, examiners will determine whether there is a need to conduct transaction testing based on risk and will not, for example, conduct transaction testing solely for the sake of completing procedures required by OCC policy. When appropriate for a community bank’s activities and risk profile, examiners will conduct appropriate examination activities. This may include streamlined testing methods, more limited sampling, and reliance on bank-provided reports as appropriate for a community bank’s activities and size, complexity, and risk profile. As needed, examiners will also conduct follow up activities for matters requiring attention, violations of law, and enforcement actions at appropriate times.
The OCC is also reaffirming the importance of examiners relying on quarterly monitoring activities5 and bank-provided reports. As part of their quarterly monitoring, examiners will conduct off-site analyses focused on essential financial risk indicators. Examiners will discuss with bank management financial trends and changes in bank operations, risk management, and personnel. Examiners will focus on areas of significant actual or planned changes, including growth, to determine whether there are emerging or newly identified risks. Examiners will use this analysis and communication to better focus on actual risks facing the bank and reduce disruption during the required on-site examination.
Similarly, examiners will leverage a community bank’s audit, risk management, reporting and other functions when appropriate. Although examiners will need to determine the reliability of these functions, when reliance is appropriate, examiners will use these bank-provided reports to avoid unnecessary duplication and reduce the burden on banks.
The OCC is also reassessing its data-collection activities for community banks. For example, the OCC currently collects information from community banks such as the Money Laundering Risk System and the Interest Rate Risk Survey to assist in scoping examinations. The OCC is assessing its use of these tools and whether the data collected are necessary or could be collected in a less burdensome manner.
The OCC will continue to review its processes to identify additional opportunities to gain efficiencies and provide relief from regulatory burden. The OCC will communicate any further changes and update the booklets of the Comptroller’s Handbook and other documents as applicable.
Please contact the Office of the Chief National Bank Examiner at 202-649-5420.
James M. Gallagher Senior Deputy Comptroller and Chief National Bank Examiner
1 “Banks” refers to national banks, federal savings associations, covered savings associations, and federal branches and agencies of foreign banking organizations. OCC News Release 2025-89 (September 18, 2025) identifies “community banks” as institutions with up to $30 billion in assets.
2 Refer to 12 USC 1820(d), 12 CFR 4.6-4.7.
3 Refer to OCC News Release 1996-2. “OCC Formally Launches Supervision by Risk Program With Distribution of Large Bank Supervision Handbook.”
4 See Refer to the “Bank Supervision Process” booklet of the Comptroller’s Handbook at 19. The OCC is required to determine whether an insured bank is complying with the requirements of the national flood insurance program during each scheduled on-site examination. Refer to 12 USC 1820(i). The statute, does not, however, specify the manner in which the OCC determines a bank’s compliance.
5 Refer to the “Community Bank Supervision” booklet of the Comptroller’s Handbook at 9-10.
6 12 USC 1820(i) requires the OCC to determine during each scheduled on-site exam whether an insured bank is complying with the national flood insurance program.
7 12 USC 2903(a) requires the OCC, in connection with its examination of a bank subject to the CRA, to assess the bank’s record of meeting the credit needs of its entire community, including low- and moderate-income neighborhoods, consistent with safe and sound operations of the bank.
8 15 USC 78o-5 requires the OCC to conduct reasonable, periodic, special, or other examinations of the records of a bank that is a government securities dealer as the OCC deems necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of this chapter.
