OCC Bank Enforcement Actions, Matters Requiring Attention: Revised Policies and Procedures Manuals for Bank Enforcement Actions and Related Matters and Matters Requiring Attention

Summary

The Office of the Comptroller of the Currency (OCC) today released two revised Policies and Procedures Manuals (PPM).

• Revised PPM 5310-3 governs bank enforcement actions and related matters (Revised Enforcement Action PPM). It replaces the previous version of PPM 5310-3 issued on May 25, 2023.
• Revised PPM 5400-11 governs matters requiring attention (Revised MRA PPM). It replaces the previous version of PPM 5400-11 issued on February 27, 2026. The OCC has not previously published PPM 5400-11 publicly.

Rescission

This bulletin rescinds OCC Bulletin 2023-16, “Revised Policies and Procedures Manual for Bank Enforcement Actions and Related Matters,” issued on May 25, 2023.

Highlights

On August 27, 2026, the OCC and the Federal Deposit Insurance Corporation issued a joint final rule to define the term “unsafe or unsound practice” for purposes of section 8 of the Federal Deposit Insurance Act and revise the supervisory framework for the issuance of MRAs and other supervisory communications (final rule). The Revised Enforcement Action and MRA PPMs ensure the OCC’s supervisory and enforcement actions are consistent with the policies articulated in the agency’s final rule. It is critical that examiners and institutions prioritize material financial risks over concerns related to policies, process, documentation, and other nonfinancial risks, and that the agencies’ enforcement and supervision standards further that prioritization. Therefore, the OCC will generally not take enforcement action under section 8 of the Federal Deposit Insurance Act without first providing the bank an opportunity to remediate deficiencies through the supervisory process. Likewise, examiners will only issue an MRA for practices, acts, or failures to act that meet the standard in this PPM and must tailor MRAs based on financial risk-related factors.

The Revised Enforcement Action PPM also anchors the OCC’s enforcement framework to three guiding principles:

• Escalation: The OCC’s response is generally escalatory and provides banks an opportunity to remediate deficiencies, both before escalation to an enforcement action and before escalation to a more severe enforcement action. Notwithstanding this general approach, the OCC may take any legally supportable enforcement action, at any time, as circumstances warrant.
• Tailoring: The OCC tailors the type of enforcement action, the speed of escalation, and the contents of the corrective actions to the specific bank’s financial risk-related factors, including capital structure, complexity, activities, asset size, and any other financial risk-related factors. The OCC’s enforcement approach reflects the increased regulatory and supervisory expectations for large or complex banks.
• Focus: The OCC issues focused bank enforcement actions with corrective actions targeted to correct specific deficiencies.

Other significant revisions include:

• Establishing that the OCC will terminate a bank enforcement action when the bank has achieved “substantial compliance,” meaning that the bank has satisfied the essential requirements of the order, even if minor, isolated requirements have not been fully satisfied.
• Changing how the OCC determines when to institute and terminate individual minimum capital ratios.
• Deleting former Appendix C, “Actions Against Banks With Persistent Weaknesses.”

Background

Enforcement Action PPM

The final rule clarifies how the OCC will exercise its enforcement authority over banks, including how the OCC will tailor its use of unsafe or unsound practices based on risk factors specific to an institution. The Revised Enforcement Action PPM aligns with the framework in the final rule. The Revised Enforcement Action PPM grounds the OCC’s approach to enforcement actions in three primary principles: escalation, tailoring, and focus.

The Revised Enforcement Action PPM explains that the OCC’s response to deficiencies is generally escalatory and provides banks an opportunity to remediate deficiencies, both before escalation to an enforcement action and before escalation to a more severe enforcement action. An appropriate supervisory or enforcement response should focus on requiring the bank to take corrective action with the least degree of OCC intervention that is reasonably necessary for the bank to remediate the deficiency in a satisfactory and timely manner. The Revised Enforcement Action PPM also explains that the OCC tailors the type of enforcement action, the speed of escalation, and the contents of the accompanying corrective actions to the specific bank’s financial risk-related factors, including capital structure, complexity, activities, asset size, and other financial risk-related factors. The OCC’s enforcement approach reflects the increased regulatory and supervisory expectations for large or complex banks. For example, 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. Finally, the 2026 revision indicates that the OCC issues focused bank enforcement actions with corrective actions targeted to correct specific deficiencies. A bank enforcement action will only contain those corrective actions necessary to remediate the deficiencies.

The Revised Enforcement Action PPM states that the OCC does not consider noncompliance with safety and soundness standards established in 12 CFR 30 a violation of law for purposes of the PPM or of the OCC’s enforcement authority under 12 USC 1818.

MRA PPM

The final rule creates a uniform standard for the issuance of an MRA to supervised banks. Specifically, the final rule provides that the agencies may only issue an MRA for a practice, act, or failure to act, alone or together with one or more other practices, acts, or failures to act, that (1) (i) is contrary to generally accepted standards of prudent operation; and (ii) (A) if continued, could reasonably be expected to, under current or reasonably foreseeable conditions; (1) materially harm the financial condition of the bank; or (2) present a material risk of loss to the Deposit Insurance Fund; or (B) has already caused material harm to the financial condition of the bank; or (2) is an actual violation of a banking or banking-related law or regulation. The final rule clarifies how and when the agencies may communicate informal observations called “supervisory observations” for weaknesses that do not rise to the level of an MRA. The final rule also addresses “other violations,” which are violations for which the agencies do not take an enforcement action or issue an MRA.

The Revised MRA PPM has been updated to reflect the standards in the final rule. The Revised MRA PPM establishes guidance and procedures for OCC examiners to issue MRAs, including the handling of violations of law or regulation. When issuing an MRA that addresses a violation, the OCC intends to exercise its supervisory discretion to issue MRAs only in response to substantive violations. Examiners must tailor their issuance of MRAs based on the risks associated with a bank’s capital structure, complexity, activities, asset size, and any other financial risk-related factor that the agencies deem appropriate. Examiners must use objective facts and sound reasoning to determine whether they issue an MRA.

The Revised MRA PPM establishes guidance and procedures for OCC examiners to issue other violations and supervisory observations. Examiners are permitted to direct a bank to correct other violations but cannot prescribe how the bank must do so or require remediation steps unrelated to correction of the violation. Communication of a supervisory observation does not create a requirement or supervisory expectation that the supervisory observation will be presented to the bank’s board of directors or that the bank will take corrective action in response to the supervisory observation. Examiners may not require the submission of an action plan or track whether the bank responded to or addressed a supervisory observation.

The Revised MRA PPM also documents various other procedures related to the drafting, communication, validation, and documentation of MRAs.

Further Information

Please contact OCC Enforcement at (202) 649-6200 or the Office of the Chief National Bank Examiner at 202-649-5420.

Jennifer Crosthwaite
Acting Senior Deputy Comptroller for Large and Global Financial Institutions

Benjamin Eddy
Senior Deputy Comptroller for Regional and Midsize Financial Institutions

Stephen A. Lybarger
Acting Senior Deputy Comptroller for Community Bank Supervision

Adam J. Cohen
Senior Deputy Comptroller and Chief Counsel

Related Links

• PPM 5310-3, “Bank Enforcement Actions and Related Matters”
• PPM 5400-11, “Matters Requiring Attention”