# FDIC FIL-45-2025: Agencies Issue Proposal to Focus Supervision on Material Financial Risks

> Federal · Agency guidance · In force

URL: https://www.frixlaw.com/law-library/statutes/FDIC_FIL25045

## Section

- **Citation:** FDIC FIL-45-2025
- **Heading:** Agencies Issue Proposal to Focus Supervision on Material Financial Risks
- **Jurisdiction:** Federal
- **Kind:** Agency guidance
- **Status:** In force
- **Text as of:** August 14, 2026
- **Source:** Compiled text
- **Location:** FDIC Financial Institution Letters / Agencies Issue Proposal to Focus Supervision on Material Financial Risks

## Text

48835
Federal Register / Vol. 90, No. 208 / Thursday, October 30, 2025 / Proposed Rules
(c) The FDIC will not require, instruct,
or encourage an institution, or any
employee of an institution, to terminate
a contract with, discontinue doing
business with, sign a contract with,
initiate doing business with, modify the
terms under which it will do business
with a person or entity, or take any
action or refrain from taking any action
on the basis of the person’s or entity’s
political, social, cultural, or religious
views or beliefs, constitutionally
protected speech, or solely on the basis
of the person’s or entity’s involvement
in politically disfavored but lawful
business activities perceived to present
reputation risk.
(d) The prohibitions in paragraphs (a)
through (c) of this section only apply to
actions taken on the bases described in
paragraphs (a) through (c) of this
section, and the prohibition in
paragraph (c) of this section shall not
apply with respect to persons, entities,
or jurisdictions sanctioned by the Office
of Foreign Assets Control.
(e) Nothing in this section shall
restrict the FDIC’s authority to
implement, administer, and enforce the
provisions of subchapter II of chapter 53
of title 31, United States Code.
(f) The FDIC will not take any
supervisory action or other adverse
action against an institution, a group of
institutions, or the institution-affiliated
parties of any institution that is
designed to punish or discourage an
individual or group from engaging in
any lawful political, social, cultural, or
religious activities, constitutionally
protected speech, or, for political
reasons, lawful business activities that
the supervisor disagrees with or
disfavors.
(g) The following definitions apply in
this section:
Adverse action includes:
parties of any institution that is
designed to punish or discourage an
individual or group from engaging in
any lawful political, social, cultural, or
religious activities, constitutionally
protected speech, or, for political
reasons, lawful business activities that
the supervisor disagrees with or
disfavors.
(g) The following definitions apply in
this section:
Adverse action includes:
(i) Any negative feedback delivered by
or on behalf of the FDIC to the
supervised institution, including in a
report of examination or a formal or
informal enforcement action;
(ii) A downgrade, or contribution to a
downgrade, of any supervisory rating,
including, but not limited to:
(A) Any rating under the Uniform
Financial Institutions Rating System (or
any comparable rating system);
(B) Any rating under the Uniform
Interagency Consumer Compliance
Rating System;
(C) Any rating under the Uniform
Rating System for Information
Technology;
(D) Any rating under any other rating
system;
(iii) A denial of a filing pursuant to 12
CFR part 303 of the FDIC’s regulations;
(iv) Inclusion of a condition on a
deposit insurance application or other
approval;
(v) Imposition of additional approval
requirements;
(vi) Any other heightened
requirements on an activity or change;
(vii) Any adjustment of the
institution’s capital requirement; and
(viii) Any action that negatively
impacts the institution, or an
institution-affiliated party, or treats the
institution differently than similarly
situated peers.
Doing business with means:
(i) The bank providing any product or
service, including account services;
(ii) The bank contracting with a third
party for the third party to provide a
product or service;
(iii) The bank providing discounted or
free products or services to customers or
third parties, including charitable
activities;
(iv) The bank entering into,
maintaining, modifying, or terminating
an employment relationship; or
providing any product or
service, including account services;
(ii) The bank contracting with a third
party for the third party to provide a
product or service;
(iii) The bank providing discounted or
free products or services to customers or
third parties, including charitable
activities;
(iv) The bank entering into,
maintaining, modifying, or terminating
an employment relationship; or
(v) Any other similar business activity
that involves a bank client or a third
party.
Institution means an entity for which
the FDIC makes or will make
supervisory determinations or other
decisions, either solely or jointly.
Institution-affiliated party means the
same as in section 3 of the Federal
Deposit Insurance Act (12 U.S.C.
1813(u)).
Reputation risk means any risk,
regardless of how the risk is labeled by
the institution or regulators, that an
action or activity, or combination of
actions or activities, or lack of actions or
activities, of an institution could
negatively impact public perception of
the institution for reasons not clearly
and directly related to the financial
condition of the institution.
PART 364—STANDARDS FOR SAFETY
AND SOUNDNESS
■14. The authority citation for part 364
continues to read as follows:
Authority: 12 U.S.C. 1818 and
1819(a)(Tenth), 1831p–1; 15 U.S.C. 1681b,
1681s, 1681w, 6801(b), 6805(b)(1).
Appendix B to Part 364 [Amended]
■15. Amend appendix B to part 364,
supplement A, section III, Customer
Notice, by removing ‘‘Timely
notification of customers is important to
manage an institution’s reputation risk.
Effective’’ and adding in its place
‘‘Timely and effective’’.
Jonathan V. Gould,
Comptroller of the Currency. Federal Deposit
Insurance Corporation.
By order of the Board of Directors.
Dated at Washington, DC, on October 7,
2025.
Jennifer M. Jones,
Deputy Executive Secretary.
[FR Doc
y removing ‘‘Timely
notification of customers is important to
manage an institution’s reputation risk.
Effective’’ and adding in its place
‘‘Timely and effective’’.
Jonathan V. Gould,
Comptroller of the Currency. Federal Deposit
Insurance Corporation.
By order of the Board of Directors.
Dated at Washington, DC, on October 7,
2025.
Jennifer M. Jones,
Deputy Executive Secretary.
[FR Doc. 2025–19715 Filed 10–29–25; 8:45 am]
BILLING CODE 4810–33–6714–01–P
DEPARTMENT OF THE TREASURY
Office of the Comptroller of the
Currency
12 CFR Part 4
[Docket ID OCC–2025–0174]
RIN 1557–AF35
FEDERAL DEPOSIT INSURANCE
CORPORATION
12 CFR Part 305
RIN 3064–AG16
Unsafe or Unsound Practices, Matters
Requiring Attention
AGENCY: Office of the Comptroller of the
Currency, Treasury, and the Federal
Deposit Insurance Corporation.
ACTION: Notice of proposed rulemaking.
SUMMARY: The Office of the Comptroller
of the Currency (OCC) and the Federal
Deposit Insurance Corporation (FDIC)
propose to define the term ‘‘unsafe or
unsound practice’’ for purposes of
section 8 of the Federal Deposit
Insurance Act and to revise the
supervisory framework for the issuance
of matters requiring attention and other
supervisory communications.
DATES: Comments must be received on
or before December 29, 2025.
ADDRESSES: Comments should be
directed to the agencies as follows:
OCC: Commenters are encouraged to
submit comments through the Federal
eRulemaking Portal. Please use the title
‘‘Unsafe or Unsound Practices, Matters
Requiring Attention’’ to facilitate the
organization and distribution of the
comments. You may submit comments
by any of the following methods:
• Federal eRulemaking Portal—
Regulations.gov:
Go to https://regulations.gov/
ncies as follows:
OCC: Commenters are encouraged to
submit comments through the Federal
eRulemaking Portal. Please use the title
‘‘Unsafe or Unsound Practices, Matters
Requiring Attention’’ to facilitate the
organization and distribution of the
comments. You may submit comments
by any of the following methods:
• Federal eRulemaking Portal—
Regulations.gov:
Go to https://regulations.gov/. Enter
Docket ID ‘‘OCC–2025–0174’’ in the
Search Box and click ‘‘Search.’’ Public
comments can be submitted via the
‘‘Comment’’ box below the displayed
document information or by clicking on
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48836
Federal Register / Vol. 90, No. 208 / Thursday, October 30, 2025 / Proposed Rules
1 For purposes of this SUPPLEMENTARY
INFORMATION, the term ‘‘institution’’ refers to insured
depository institutions and any other institutions
subject to supervision or enforcement by the
agencies. The scope of the proposed rule is
discussed below.
2 A depository institution generally refers to an
insured depository institution as defined in 12
U.S.C. 1813(c)(2); any national banking association
chartered by the OCC, including an uninsured
association; or a branch or agency of a foreign bank.
Refer to specific provisions of 12 U.S.C. 1818
regarding their applicability to a specific
institution. See 12 U.S.C. 1818(b)(4)–(5).
3 See id. 1813(u).
4 Specifically, as discussed in more detail below,
the OCC has procedures for the communication of
matters requiring attention (MRAs). The FDIC
communicates matters requiring board attention
(MRBAs).
the document title and then clicking the
‘‘Comment’’ box on the top-left side of
the screen. For help with submitting
effective comments, please click on
‘‘Commenter’s Checklist.’’ For
assistance with the Regulations.gov site,
please call 1–866–498–2945 (toll free)
Monday–Friday, 9 a.m.–5 p.m
ers requiring attention (MRAs). The FDIC
communicates matters requiring board attention
(MRBAs).
the document title and then clicking the
‘‘Comment’’ box on the top-left side of
the screen. For help with submitting
effective comments, please click on
‘‘Commenter’s Checklist.’’ For
assistance with the Regulations.gov site,
please call 1–866–498–2945 (toll free)
Monday–Friday, 9 a.m.–5 p.m. EST, or
email regulationshelpdesk@gsa.gov.
• Mail: Chief Counsel’s Office,
Attention: Comment Processing, Office
of the Comptroller of the Currency, 400
7th Street SW, Suite 3E–218,
Washington, DC 20219.
• Hand Delivery/Courier: 400 7th
Street SW, Suite 3E–218, Washington,
DC 20219.
Instructions: You must include
‘‘OCC’’ as the agency name and Docket
ID ‘‘OCC–2025–0174’’ in your comment.
In general, the OCC will enter all
comments received into the docket and
publish the comments on the
Regulations.gov website without
change, including any business or
personal information provided such as
name and address information, email
addresses, or phone numbers.
Comments received, including
attachments and other supporting
materials, are part of the public record
and subject to public disclosure. Do not
include any information in your
comment or supporting materials that
you consider confidential or
inappropriate for public disclosure.
You may review comments and other
related materials that pertain to this
action by the following method:
• Viewing Comments Electronically—
Regulations.gov:
Go to https://regulations.gov/. Enter
Docket ID ‘‘OCC–2025–0174’’ in the
Search Box and click ‘‘Search.’’ Click on
the ‘‘Dockets’’ tab and then the
document’s title. After clicking the
document’s title, click the ‘‘Browse All
Comments’’ tab. Comments can be
viewed and filtered by clicking on the
‘‘Sort By’’ drop-down on the right side
of the screen or the ‘‘Refine Comments
Results’’ options on the left side of the
screen
er
Docket ID ‘‘OCC–2025–0174’’ in the
Search Box and click ‘‘Search.’’ Click on
the ‘‘Dockets’’ tab and then the
document’s title. After clicking the
document’s title, click the ‘‘Browse All
Comments’’ tab. Comments can be
viewed and filtered by clicking on the
‘‘Sort By’’ drop-down on the right side
of the screen or the ‘‘Refine Comments
Results’’ options on the left side of the
screen. Supporting materials can be
viewed by clicking on the ‘‘Browse
Documents’’ tab. Click on the ‘‘Sort By’’
drop-down on the right side of the
screen or the ‘‘Refine Results’’ options
on the left side of the screen checking
the ‘‘Supporting & Related Material’’
checkbox. For assistance with the
Regulations.gov site, please call 1–866–
498–2945 (toll free) Monday–Friday, 9
a.m.–5 p.m. EST, or email
regulationshelpdesk@gsa.gov.
The docket may be viewed after the
close of the comment period in the same
manner as during the comment period.
FDIC: You may submit comments to
the FDIC, identified by RIN 3064–AG16,
by any of the following methods:
• Agency Website: https://
www.fdic.gov/federal-register-
publications. Follow instructions for
submitting comments on the FDIC’s
website.
• Email: comments@FDIC.gov.
Include RIN 3064–AG16 in the subject
line of the message.
• Mail: Jennifer M. Jones, Deputy
Executive Secretary, Attention:
Comments—RIN 3064–AG16, Federal
Deposit Insurance Corporation, 550 17th
Street NW, Washington, DC 20429.
• Hand Delivery/Courier: Comments
may be hand-delivered to the guard
station at the rear of the 550 17th Street
NW building (located on F Street NW)
on business days between 7 a.m. and 5
p.m.
Public Inspection: Comments
received, including any personal
information provided, may be posted
without change to https://www.fdic.gov/
federal-register-publications.
Commenters should submit only
information they wish to make available
publicly
vered to the guard
station at the rear of the 550 17th Street
NW building (located on F Street NW)
on business days between 7 a.m. and 5
p.m.
Public Inspection: Comments
received, including any personal
information provided, may be posted
without change to https://www.fdic.gov/
federal-register-publications.
Commenters should submit only
information they wish to make available
publicly. The FDIC may review, redact,
or refrain from posting all or any portion
of any comment that it may deem to be
inappropriate for publication, such as
irrelevant or obscene material. The FDIC
may post only a single representative
example of identical or substantially
identical comments, and in such cases
will generally identify the number of
identical or substantially identical
comments represented by the posted
example. All comments that have been
redacted, as well as those that have not
been posted, that contain comments on
the merits of this notice will be retained
in the public comment file and will be
considered as required under all
applicable laws. All comments may be
accessible under the Freedom of
Information Act.
FOR FURTHER INFORMATION CONTACT:
OCC: Eden Gray, Assistant Director,
Allison Hester-Haddad, Special
Counsel, Marjorie Dieter, Counsel, Harry
Naftalowitz, Attorney, Chief Counsel’s
Office, 202–649–5490, Office of the
Comptroller of the Currency, 400 7th
Street SW, Washington, DC 20219. If
you are deaf, hard of hearing, or have a
speech disability, please dial 7–1–1 to
access telecommunications relay
services.
FDIC: Division of Risk Management
Supervision: Brittany Audia, Chief,
Exam Support Section, (703) 254–0801,
baudia@fdic.gov; Legal Division, Seth P.
Rosebrock, Assistant General Counsel,
f the
Comptroller of the Currency, 400 7th
Street SW, Washington, DC 20219. If
you are deaf, hard of hearing, or have a
speech disability, please dial 7–1–1 to
access telecommunications relay
services.
FDIC: Division of Risk Management
Supervision: Brittany Audia, Chief,
Exam Support Section, (703) 254–0801,
baudia@fdic.gov; Legal Division, Seth P.
Rosebrock, Assistant General Counsel,
(202) 898–6609, srosebrock@fdic.gov.
SUPPLEMENTARY INFORMATION:
I. Introduction
The OCC and the FDIC (collectively,
the agencies) exercise their enforcement
and supervision authority to ensure that
supervised institutions 1 refrain from
engaging in unsafe or unsound
practices. To that effect, the agencies
believe it is important to promote
greater clarity and certainty regarding
certain enforcement and supervision
standards by defining them by
regulation. Moreover, the agencies
believe it is critical that examiners and
institutions prioritize material financial
risks over concerns related to policies,
process, documentation, and other
nonfinancial risks and that their
enforcement and supervision standards
further that prioritization.
Specifically, pursuant to the
provisions of section 8 of the Federal
Deposit Insurance Act (FDI Act) (12
U.S.C. 1818), the agencies are
authorized to take enforcement actions
against depository institutions 2 and
institution-affiliated parties 3 that have
engaged in an ‘‘unsafe or unsound
practice.’’ As described in section II.A of
this SUPPLEMENTARY INFORMATION, the
agencies are proposing to define by
regulation the term ‘‘unsafe or unsound
practice’’ for purposes of section 8 of the
FDI Act. The proposed implementation
of the definition of ‘‘unsafe or unsound
practice’’ would apply to the agencies’
supervisory and enforcement activities
prospectively only. Moreover, it would
not apply to the agencies’ rulemaking
activities or authority
RMATION, the
agencies are proposing to define by
regulation the term ‘‘unsafe or unsound
practice’’ for purposes of section 8 of the
FDI Act. The proposed implementation
of the definition of ‘‘unsafe or unsound
practice’’ would apply to the agencies’
supervisory and enforcement activities
prospectively only. Moreover, it would
not apply to the agencies’ rulemaking
activities or authority.
In addition, the agencies are
proposing to establish uniform
standards for purposes of their
communication of certain supervisory
concerns. The agencies each
communicate deficiencies that rise to
the level of a matter that requires
attention from an institution’s board of
directors and management, but the
agencies have different standards for
when the agency may communicate
these deficiencies.4 As described in
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Federal Register / Vol. 90, No. 208 / Thursday, October 30, 2025 / Proposed Rules
5 See Groos Nat’l Bank v. OCC, 573 F.2d 889, 897
(5th Cir. 1978) (‘‘The phrase ‘unsafe or unsound
banking practice’ is widely used in the regulatory
statutes and in case law, and one of the purposes
of the banking acts is clearly to commit the
progressive definition and eradication of such
practices to the expertise of the appropriate
regulatory agencies.’’).
6 12 U.S.C. 1818(a)(2)–(3) (‘‘If the [FDIC] Board of
Directors determines that an insured depository
institution or the directors or trustees of an insured
depository institution have engaged or are engaging
in unsafe or unsound practices in conducting the
business of the depository institution . . . the
[FDIC] Board of Directors may issue an order
terminating the insured status of such depository
institution effective as of a date subsequent to such
finding.’’).
7 Id
insured depository
institution or the directors or trustees of an insured
depository institution have engaged or are engaging
in unsafe or unsound practices in conducting the
business of the depository institution . . . the
[FDIC] Board of Directors may issue an order
terminating the insured status of such depository
institution effective as of a date subsequent to such
finding.’’).
7 Id. 1818(b)(1) (‘‘If, in the opinion of the
appropriate Federal banking agency, any insured
depository institution, depository institution which
has insured deposits, or any institution-affiliated
party is engaging or has engaged, or the agency has
reasonable cause to believe that the depository
institution or any institution-affiliated party is
about to engage, in an unsafe or unsound practice
in conducting the business of such depository
institution . . . the agency may issue and serve
upon the depository institution or the institution-
affiliated party an order to cease and desist from
any such . . . practice.’’).
8 Id. 1818(c)(1) (‘‘Whenever the appropriate
Federal banking agency shall determine that . . .
the unsafe or unsound practice or practices . . . or
the continuation thereof, is likely to cause
insolvency or significant dissipation of assets or
earnings of the depository institution, or is likely
to weaken the condition of the depository
institution or otherwise prejudice the interests of its
depositors prior to the completion of the
proceedings conducted pursuant to paragraph (1) of
subsection (b) of this section, the agency may issue
a temporary order requiring the depository
institution or such party to cease and desist from
any such . . . practice and to take affirmative action
to prevent or remedy such insolvency, dissipation,
condition, or prejudice pending completion of such
proceedings.’’).
9 Id. 1818(e) (Subject to additional requirements,
‘‘[w]henever the appropriate Federal banking
agency determines that any institution-affiliated
party has, directly or indirectly
r such party to cease and desist from
any such . . . practice and to take affirmative action
to prevent or remedy such insolvency, dissipation,
condition, or prejudice pending completion of such
proceedings.’’).
9 Id. 1818(e) (Subject to additional requirements,
‘‘[w]henever the appropriate Federal banking
agency determines that any institution-affiliated
party has, directly or indirectly . . . engaged or
participated in any unsafe or unsound practice in
connection with any insured depository institution
or business institution . . . the appropriate Federal
banking agency may suspend such party from office
or prohibit such party from further participation in
any manner in the conduct of the affairs of the
depository institution . . . .’’).
10 Id. 1818(i) (‘‘[A]ny insured depository
institution which, and any institution-affiliated
party who . . . recklessly engages in an unsafe or
unsound practice in conducting the affairs of such
insured depository institution . . . which practice
is part of a pattern of misconduct; causes or is likely
to cause more than a minimal loss to such
depository institution; or results in pecuniary gain
or other benefit to such party, shall forfeit and pay
a civil penalty of not more than $25,000 for each
day during which such . . . practice . . . continues
. . . . [A]ny insured depository institution which,
and any institution-affiliated party who knowingly
. . . engages in any unsafe or unsound practice in
conducting the affairs of such depository
institution; . . . and knowingly or recklessly causes
a substantial loss to such depository institution or
a substantial pecuniary gain or other benefit to such
party by reason of such . . . practice . . . shall
forfeit and pay a civil penalty in an amount not to
exceed the applicable maximum amount
determined under subparagraph (D) for each day
during which such . . . practice . . . continues.’’).
11 See, e.g., 16 J.A. Simpson & E.S.C. Weiner,
Oxford English Dictionary 355–66 (2d ed
itution or
a substantial pecuniary gain or other benefit to such
party by reason of such . . . practice . . . shall
forfeit and pay a civil penalty in an amount not to
exceed the applicable maximum amount
determined under subparagraph (D) for each day
during which such . . . practice . . . continues.’’).
11 See, e.g., 16 J.A. Simpson & E.S.C. Weiner,
Oxford English Dictionary 355–66 (2d ed. 1989)
(safe); 19 id. at 180 (unsafe).
12 See, e.g., 16 id. at 50–52 (sound); 19 id. at 206
(unsound).
13 See, e.g., Gulf Fed. Sav. & Loan Assoc. of
Jefferson Parish v. Fed. Home Loan Bank Bd., 651
F.2d 259, 264 (5th Cir. 1981) (‘‘The authoritative
definition of an unsafe or unsound practice,
adopted in both Houses, was a memorandum
submitted by John Horne’’). Chairman Horne’s
articulation of what constitutes an unsafe or
unsound practice was read into the record in both
chambers of Congress. See 112 Cong. Rec. 25008,
26474 (1966) (remarks of Rep. Thomas W.L. Ashley
and Sen. Absalom W. Robertson).
14 112 Cong. Rec. 26474.
15 Id. at 24984 (remarks of Rep. Wright Patman).
16 See, e.g., Greene Cnty. Bank v. FDIC, 92 F.3d
633, 636 (8th Cir. 1996) (quoting First Nat’l Bank
of Eden, S.D. v. Dep’t of Treas., OCC, 568 F.2d 610,
Continued
section II.B of this SUPPLEMENTARY
INFORMATION, the agencies are proposing
to establish uniform standards for when
and how the agencies may communicate
matters requiring attention (MRAs) as
part of the supervision and examination
process, consistent with their
underlying statutory authorities. The
proposal also clarifies that the agencies
may communicate other nonbinding
suggestions to institutions orally or in
writing to enhance an institution’s
policies, practices, condition, or
operations as long as the
communication is not, and is not treated
by the agency in a manner similar to, an
MRA.
II. Description of the Proposed Rule
A
with their
underlying statutory authorities. The
proposal also clarifies that the agencies
may communicate other nonbinding
suggestions to institutions orally or in
writing to enhance an institution’s
policies, practices, condition, or
operations as long as the
communication is not, and is not treated
by the agency in a manner similar to, an
MRA.
II. Description of the Proposed Rule
A. Unsafe or Unsound Practices
Based on the agencies’ supervisory
experience and as a matter of policy, the
agencies propose implementing a
definition of ‘‘unsafe or unsound
practice’’ for purposes of section 8 of the
FDI Act that would focus on material
risks to the financial condition of an
institution and would generally require
that an imprudent practice, act, or
failure to act, if continued, would be
likely to materially harm the
institution’s financial condition. Taking
into account statutory text, legislative
history, and case law, the agencies
believe that the proposed regulatory
definition fits within the authority
Congress granted to the agencies to take
enforcement actions based on unsafe or
unsound practices under section 8 of
the FDI Act.5 The agencies believe this
change will provide greater consistency
for institutions and institution-affiliated
parties and appropriately focus
supervisory and institution resources on
the most critical financial risks to
institutions and the financial system.
The term ‘‘unsafe or unsound
practice’’ appears in section 8 of the FDI
Act for purposes of the agencies’
enforcement authority. The statute does
not define the term unsafe or unsound
practice. An unsafe or unsound practice
may serve as a ground for several types
of enforcement actions under provisions
of section 8 of the FDI Act
financial risks to
institutions and the financial system.
The term ‘‘unsafe or unsound
practice’’ appears in section 8 of the FDI
Act for purposes of the agencies’
enforcement authority. The statute does
not define the term unsafe or unsound
practice. An unsafe or unsound practice
may serve as a ground for several types
of enforcement actions under provisions
of section 8 of the FDI Act. These
include involuntary termination of
deposit insurance by the FDIC,6 a cease-
and-desist order,7 a temporary cease-
and-desist order,8 the removal and
prohibition of an institution-affiliated
party,9 or a Tier 2 or Tier 3 civil money
penalty.10 Most enforcement provisions
in section 8 of the FDI Act also include
other potential grounds, such as a
violation of law or a breach of fiduciary
duty, which are not affected by the
proposed regulatory definition.
The ordinary meaning of the term
‘‘unsafe,’’ as defined by the dictionaries
most commonly used at the time section
8 of the FDI Act was enacted, is a
sufficient degree of risk of sufficient
harm, injury, or damage to make a
situation not safe.11 They defined the
term ‘‘unsound’’ as a sufficient degree of
actual harm, injury, or damage to make
a thing not sound.12
In determining what may be
considered an unsafe or unsound
practice under section 8 of the FDI Act,
some courts have looked to a standard
articulated by John Horne, then
Chairman of the Federal Home Loan
Bank Board (FHLBB) (Horne Standard),
during congressional hearings related to
the Financial Institutions Supervisory
Act of 1966 (Act of 1966), which is the
source of the agencies cease-and-desist
authority in section 8(b) of the FDI
Act.13 Specifically, Chairman Horne
stated:
Generally speaking, an ‘‘unsafe or
unsound practice’’ embraces any action,
or lack of action, which is contrary to
generally accepted standards of prudent
operation, the possible consequences of
which, if continued, would be abnormal
risk or loss or damage to an institution,
its shareholder
cease-and-desist
authority in section 8(b) of the FDI
Act.13 Specifically, Chairman Horne
stated:
Generally speaking, an ‘‘unsafe or
unsound practice’’ embraces any action,
or lack of action, which is contrary to
generally accepted standards of prudent
operation, the possible consequences of
which, if continued, would be abnormal
risk or loss or damage to an institution,
its shareholders, or the agencies
administering the insurance funds.14
Representative Patman further
described the authority added in the Act
of 1966 as ‘‘aimed specifically at actions
impairing the safety or soundness of
. . . insured financial institutions’’ and
providing the agencies with ‘‘flexible
tools [that] relate strictly to the
insurance risk and to assure the public
. . . sound banking facilities.’’ 15
Courts reviewing cases brought by the
agencies have grappled with the
meaning of ‘‘unsafe or unsound
practice’’ in section 8 of the FDI Act and
have reached different conclusions as to
how to apply it. For example, some
courts have applied the Horne Standard
without further elaboration on what the
standard entails.16 Other courts have
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611 n.2 (8th Cir. 1978)); Doolittle v. NCUA, 992 F.2d
1531, 1538 (11th Cir. 1993) (quoting Nw. Nat’l
Bank, Fayetteville, Ark. v. Dep’t of Treas., 917 F.2d
1111, 1115 (8th Cir. 1990)) (construing the term
unsafe or unsound practice as applied to a credit
union).
17 Gulf Fed. Sav. & Loan Assoc. of Jefferson
Parish., 651 F.2d at 264.
18 Johnson v. OTS, 81 F.3d 195, 204 (D.C. Cir.
1996) (quoting Gulf Fed. Sav. & Loan Assoc. of
Jefferson Parish., 651 F.2d at 267).
19 In re Seidman, 37 F.3d 911, 928 (3d Cir. 1994);
see also id
f Treas., 917 F.2d
1111, 1115 (8th Cir. 1990)) (construing the term
unsafe or unsound practice as applied to a credit
union).
17 Gulf Fed. Sav. & Loan Assoc. of Jefferson
Parish., 651 F.2d at 264.
18 Johnson v. OTS, 81 F.3d 195, 204 (D.C. Cir.
1996) (quoting Gulf Fed. Sav. & Loan Assoc. of
Jefferson Parish., 651 F.2d at 267).
19 In re Seidman, 37 F.3d 911, 928 (3d Cir. 1994);
see also id. at 932 (stating that ‘‘[a]n unsafe or
unsound practice has two components: (1) an
imprudent act (2) that places an abnormal risk of
financial loss or damage on a banking institution’’).
20 Michael v. FDIC, 687 F.3d 337, 352 (7th Cir.
2012) (citing In re Seidman, 37 F.3d at 932).
21 Blanton v. OCC, 909 F.3d 1162, 1172 (D.C. Cir.
2018) (quoting Landry v. FDIC, 204 F.3d 1125, 1138
(D.C. Cir. 2000)).
22 In March 2023, several insured depository
institutions with total consolidated assets of $100
billion or more, including Silicon Valley Bank,
experienced significant withdrawals of uninsured
deposits in response to underlying material
weaknesses in their financial position and failed.
The agencies believe these failures highlight the
need for the agencies to allocate supervisory
resources with a focus on material financial risks.
23 In addition to enforcement actions under
section 8 of the FDI Act, the agencies identify
unsafe or unsound practices as supervisory findings
in other communications, including reports of
examination, supervisory letters, MRAs, and
informal enforcement actions. These identified
unsafe or unsound practices sometimes establish a
record for a later enforcement action under section
8 of the FDI Act. The agencies’ identification of an
unsafe or unsound practice is distinct from
standards for safety and soundness that the agencies
are required to issue pursuant to 12 U.S.C. 1831p–
1. See 12 CFR parts 30, 364.
24 See, e.g., Michael, 687 F.3d at 352 (citing Van
Dyke v. FRB, 876 F.2d 1377, 1380 (8th Cir. 1989));
Frontier State Bank Okla. City, Okla. v
action under section
8 of the FDI Act. The agencies’ identification of an
unsafe or unsound practice is distinct from
standards for safety and soundness that the agencies
are required to issue pursuant to 12 U.S.C. 1831p–
1. See 12 CFR parts 30, 364.
24 See, e.g., Michael, 687 F.3d at 352 (citing Van
Dyke v. FRB, 876 F.2d 1377, 1380 (8th Cir. 1989));
Frontier State Bank Okla. City, Okla. v. FDIC, 702
F.3d 588, 604 (10th Cir. 2012) (citing Simpson v.
OTS, 29 F.3d 1418, 1425 (9th Cir. 1994)); De la
Fuente v. FDIC, 332 F.3d 1208, 12222 (9th Cir.
2003) (citing Simpson, 29 F.3d at 1425).
25 Additionally, under the proposal, practices,
acts, or failures to act that have already caused
material harm to the financial condition of the
institution would not have to meet the ‘‘likely’’
standard, as there would be certainty with respect
to the harm.
explained that section 8 of the FDI Act
applies to practices that have a
‘‘reasonably direct effect on an
[institution]’s financial soundness’’ 17 or
‘‘threaten the financial integrity’’ of the
institution.18 Other courts have required
that unsafe or unsound practices cause
‘‘abnormal risk to the financial stability
of the . . . institution,’’ 19 ‘‘abnormal
risk of financial loss or damage,’’ 20 or
‘‘reasonably foreseeable undue risk.’’ 21
The lack of a Federal statutory
definition for the term ‘‘unsafe or
unsound practice’’ has resulted in
enforcement actions and supervisory
criticisms for concerns not related to
material financial risks. The agencies
believe that the proposed regulatory
definition faithfully reflects the intent of
the standard as enacted by Congress and
aligns with the interpretations of the
term unsafe or unsound practice within
section 8 of the FDI Act by most Federal
courts. The proposed regulatory
definition would also provide a
consistent nationwide standard to
provide greater clarity for institutions
and institution-affiliated parties
d regulatory
definition faithfully reflects the intent of
the standard as enacted by Congress and
aligns with the interpretations of the
term unsafe or unsound practice within
section 8 of the FDI Act by most Federal
courts. The proposed regulatory
definition would also provide a
consistent nationwide standard to
provide greater clarity for institutions
and institution-affiliated parties.
The agencies believe that the
proposed definition of the term unsafe
or unsound practice is also important to
appropriately focus institution and
examiner attention on practices that are
likely to materially harm an institution’s
financial condition, providing the
institution’s board of directors and
management additional flexibility to
enact day-to-day decisions based on
their business judgment and risk
tolerance. The proposed definition
reflects the agencies’ judgment and
experience that their supervisory
resources are best focused on practices
that are likely to materially harm an
institution’s financial condition, such as
risks that are more likely than other
risks to lead to material financial losses,
bank failures, and instability in the
banking system.22 For the same reasons,
the agencies believe that practices that
are likely to materially harm the
financial condition of an institution are
critical for an institution’s board of
directors and management to address.
In addition, lack of clarity regarding
the scope of the term unsafe or unsound
practice among examiners could lead to
inconsistent application of the terms in
communicating supervisory findings.23
The proposed definition of an unsafe or
unsound practice should ensure
consistency in identifying practices as
unsafe or unsound only where they are
likely to materially harm the financial
condition of an institution, are likely to
present a material risk of loss to the
Deposit Insurance Fund (DIF), or have
materially harmed the financial
condition of the institution
ervisory findings.23
The proposed definition of an unsafe or
unsound practice should ensure
consistency in identifying practices as
unsafe or unsound only where they are
likely to materially harm the financial
condition of an institution, are likely to
present a material risk of loss to the
Deposit Insurance Fund (DIF), or have
materially harmed the financial
condition of the institution. This
definition should focus institution and
examiner attention on core financial
risks facing an institution and otherwise
provide the institution’s board of
directors and management the flexibility
to enact decisions based on their
business judgment and risk tolerance.
Therefore, as explained further below,
in the proposed rule, the agencies
would define the term unsafe or
unsound practice to mean a practice,
act, or failure to act, alone or together
with one or more other practices, acts,
or failures to act, that (1) is contrary to
generally accepted standards of prudent
operation; and (2)(i) if continued, is
likely to (A) materially harm the
financial condition of the institution; or
(B) present a material risk of loss to the
DIF; or (ii) materially harmed the
financial condition of the institution.
Imprudent act. Consistent with the
Horne Standard, a practice, act, or
failure to act under the proposed
definition would have to be contrary to
generally accepted standards of prudent
operation to be considered an unsafe or
unsound practice.24 The agencies
acknowledge that an essential role of
institutions is to identify, measure,
incur, and manage risk. The agencies do
not intend to take enforcement actions
under section 8 of the FDI Act for
prudent operations that result in risk-
taking. A practice, act, or failure to act
could only be considered an unsafe or
unsound practice if it deviates from
generally accepted standards of prudent
operation (and otherwise meets the
proposed definition).
Likely
ify, measure,
incur, and manage risk. The agencies do
not intend to take enforcement actions
under section 8 of the FDI Act for
prudent operations that result in risk-
taking. A practice, act, or failure to act
could only be considered an unsafe or
unsound practice if it deviates from
generally accepted standards of prudent
operation (and otherwise meets the
proposed definition).
Likely. To qualify as an unsafe or
unsound practice under the proposed
definition, it also would have to be
likely—as opposed to, for example,
merely possible—that the practice, act,
or failure to act, if continued, would
materially harm the financial condition
of the institution or present a material
risk of loss to the DIF. The agencies
believe that including the term ‘‘if
continued’’ is important to allow for
identification of an unsafe or unsound
act or failure to act before it impacts an
institution’s financial condition.
However, the conduct must be
sufficiently proximate to a material
harm to an institution’s financial
condition to meet the proposed
definition.25 The agencies do not intend
to identify unsafe or unsound acts or
failures to act by extrapolating from
deficient conduct that could potentially
result in, alone or in combination with
other factors or events, material harm to
the financial condition of an institution
but is not likely to do so. Moreover, the
agencies considered, but did not
propose, more precisely defining the
requisite likelihood under the proposed
definition, such as through a minimum
percentage (e.g., 10%, 51%). Instead, the
agencies invite comment on whether a
minimum percentage likelihood or more
precise definition of ‘‘likely’’ is
appropriate.
Financial condition. An unsafe or
unsound practice would include a
practice, act, or failure to act that, if
continued, is likely to materially harm
the financial condition of an institution
nition, such as through a minimum
percentage (e.g., 10%, 51%). Instead, the
agencies invite comment on whether a
minimum percentage likelihood or more
precise definition of ‘‘likely’’ is
appropriate.
Financial condition. An unsafe or
unsound practice would include a
practice, act, or failure to act that, if
continued, is likely to materially harm
the financial condition of an institution.
The agencies believe that harm to
financial condition includes practices,
acts, or failures to act that are likely to
directly, clearly and predictably impact
an institution’s capital, asset quality,
earnings, liquidity, or sensitivity to
market risk.
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26 See Landry, 204 F.3d at 1138.
27 See Johnson v. OTS, 81 F.3d at 204.
28 See Gulf Fed. Sav. & Loan Assoc. of Jefferson
Parish, 651 F.2d at 264–65 (‘‘Approving
intervention under the [FHLBB]’s ‘‘loss of public
confidence’’ rationale would result in open-ended
supervision. . . . The Board’s rationale would
permit it to decide, not that the public has lost
confidence in Gulf Federal’s financial soundness,
but that the public may lose confidence in the
fairness of the association’s contracts with its
customers.’’).
29 See, e.g., id. at 259 (an institution with $75
million in assets did not engage in an unsafe or
unsound practice when it misrepresented the
calculation of interest rates on loans, which could
have resulted in an $80,000 loss to the institution—
a loss of far less than 1% of the institution’s total
assets)
confidence in the
fairness of the association’s contracts with its
customers.’’).
29 See, e.g., id. at 259 (an institution with $75
million in assets did not engage in an unsafe or
unsound practice when it misrepresented the
calculation of interest rates on loans, which could
have resulted in an $80,000 loss to the institution—
a loss of far less than 1% of the institution’s total
assets).
30 See, e.g., Blanton, 909 F.3d at 1172–73 (an
institution-affiliated party engaged in an unsafe or
unsound practice by permitting a customer to
overdraft more than $2 million over two months,
with outstanding overdrafts at one point totaling
nearly 65% of the institution’s Tier 1 capital, even
though the institution’s capital levels were critically
deficient).
31 12 U.S.C. 481, 1463, 1464, 1820, 1867, 3105(c),
5412(b).
32 See, e.g., Cuomo v. Clearing House Ass’n, 557
U.S. 519 (2009); United States v. Gaubert, 499 U.S.
315 (1991); United States v. Phila. Nat’l Bank, 374
U.S. 321 (1963).
Risk of Loss to the Deposit Insurance
Fund. An unsafe or unsound practice
would also include a practice, act, or
failure to act that, if continued, is likely
to negatively affect an institution’s
ability to avoid FDIC receivership and
present a material risk of loss to the DIF
as a result of the failure. For example,
the failure of an institution to
implement appropriate contingency
funding arrangements might not pose a
risk of material harm to the financial
condition of the institution, but could
impair the institution’s liquidity under
stress and thus present an increased risk
to the DIF. In other words, the proposed
definition would capture a practice, act,
or failure to act that materially increases
the probability that an institution would
fail and impose a material risk of loss to
the DIF.
Harm. The proposed standard focuses
on material harm to financial condition,
and the agencies generally interpret
harm to refer to financial losses
ent an increased risk
to the DIF. In other words, the proposed
definition would capture a practice, act,
or failure to act that materially increases
the probability that an institution would
fail and impose a material risk of loss to
the DIF.
Harm. The proposed standard focuses
on material harm to financial condition,
and the agencies generally interpret
harm to refer to financial losses.
Therefore, to be an unsafe or unsound
practice, a practice, act, or failure to act
generally must have either caused actual
material losses to the institution or must
be likely to cause material loss or other
negative financial impacts to the
institution.26 Conversely, that a
practice, act, or failure to act caused
actual but non-material financial losses
to the institution is insufficient to meet
the proposed standard.27
Nonfinancial risks impacting
financial condition. The agencies also
acknowledge that, in limited
circumstances, other practices, acts, or
failures to act may be captured because,
if continued, they are likely to cause
material harm to an institution’s
financial condition. For example, the
term unsafe or unsound practice could
include critical infrastructure or
cybersecurity deficiencies that are so
severe as to, if continued, be likely to
result in a material disruption to the
institution’s core operations that
prevent the institution, its
counterparties, and its customers from
conducting business operations and, in
turn, be likely to cause material harm to
the financial condition of the
institution. The standard would not
include risks to the institution’s
reputation unrelated to financial
condition.28
Material harm. Under the proposed
definition, to be considered an unsafe or
unsound practice, the likely harm to an
institution’s financial condition or risk
of loss to the DIF must also be material
turn, be likely to cause material harm to
the financial condition of the
institution. The standard would not
include risks to the institution’s
reputation unrelated to financial
condition.28
Material harm. Under the proposed
definition, to be considered an unsafe or
unsound practice, the likely harm to an
institution’s financial condition or risk
of loss to the DIF must also be material.
Risks of minor harm to an institution’s
financial condition, even if imminent,
would not rise to the level of an unsafe
or unsound practice.29 Instead, the
agencies will consider the likely harm to
an institution’s financial condition to be
material if it would materially impact
the institution’s capital, asset quality,
liquidity, earnings, or sensitivity to
market risk,30 or would materially
impact the risk that an institution fails
and causes a loss to the DIF. Going
forward, the agencies expect that it
would be rare for an institution to
exhibit unsafe or unsound practices, as
defined in the proposed rule, based
solely on the institution’s policies,
procedures, documentation or internal
controls, without significant weaknesses
in the institution’s financial condition
(i.e., weaknesses that caused material
harm to the financial condition of the
institution, or were likely to materially
harm the financial condition of the
institution or likely to present material
risk of loss to the DIF). The agencies
considered but did not propose to more
precisely define the materiality of harm
required under the proposed definition,
such as through measures of capital or
liquidity outflows. Instead, the agencies
invite comment on what, if any, more
precise measures of material harm are
appropriate.
Tailoring required. The proposal also
explains that the agencies will tailor
their supervisory and enforcement
actions under 12 U.S.C
more
precisely define the materiality of harm
required under the proposed definition,
such as through measures of capital or
liquidity outflows. Instead, the agencies
invite comment on what, if any, more
precise measures of material harm are
appropriate.
Tailoring required. The proposal also
explains that the agencies will tailor
their supervisory and enforcement
actions under 12 U.S.C. 1818 (as well as
their issuance of MRAs, as discussed
further below) based on the capital
structure, riskiness, complexity,
activities, asset size, and any financial
risk-related factor that the agencies
deem appropriate. This includes
tailoring with respect to the
requirements or expectations set forth in
such actions as well as whether, and the
extent to which, such actions are taken.
As such, the agencies expect that
finding an unsafe or unsound practice
would be a much higher bar for a
community bank than for a larger
institution when considered against the
overall operations of the institution. For
example, as applied to the threshold for
material harm, the agencies would not
expect that a particular projected
percentage decrease in capital or
liquidity that rises to the level of
materiality for the largest institutions
would necessarily also be material for
community banks. The agencies invite
comment on whether the agencies
should provide additional specificity.
Generally, because unsafe or unsound
practices by institution-affiliated parties
must, if continued, be likely to
materially harm the financial condition
of an institution, the same tailored
standard would, going forward, apply to
practices, acts, or failures to act by
institution-affiliated parties of the
institution
comment on whether the agencies
should provide additional specificity.
Generally, because unsafe or unsound
practices by institution-affiliated parties
must, if continued, be likely to
materially harm the financial condition
of an institution, the same tailored
standard would, going forward, apply to
practices, acts, or failures to act by
institution-affiliated parties of the
institution.
For these reasons, the agencies
propose to define the term unsafe or
unsound practice to mean a practice,
act, or failure to act, alone or together
with other practices, acts, or failures to
act, that (1) is contrary to generally
accepted standards of prudent
operation; and (2)(i) if continued, is
likely to (A) materially harm the
financial condition of an institution; or
(B) present a material risk of loss to the
DIF; or (ii) materially harmed the
financial condition of the institution.
B. Matters Requiring Attention
The agencies are proposing to
establish uniform standards for
examiners’ communication of MRAs.
Under the proposed rule, an examiner
would be permitted to issue an MRA to
address certain risks to the financial
condition of an institution and
violations of banking or banking-related
laws or regulations.
Through various statutory
examination and reporting authorities,
Congress has conferred upon the
agencies the authority to exercise
visitorial powers and examination
authorities with respect to supervised
institutions.31 The Supreme Court has
indicated support for a broad reading of
certain visitorial powers.32 Examination
and visitorial powers of the agencies
facilitate early identification of
supervisory concerns that may not rise
to a violation of law, unsafe or unsound
practice, or breach of fiduciary duty
under section 8 of the FDI Act. These
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ination
and visitorial powers of the agencies
facilitate early identification of
supervisory concerns that may not rise
to a violation of law, unsafe or unsound
practice, or breach of fiduciary duty
under section 8 of the FDI Act. These
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33 See 12 U.S.C. 481, 1463, 1820(b), 1867, 3105(c),
5412(b).
34 OCC, Comptroller’s Handbook, ‘‘Bank
Supervision Process’’ at 46 (March 2025).
35 Id. at 134.
36 Id. at 46.
37 Id. at 38.
38 OCC, Policies and Procedures Manual: PPM
5310–3, ‘‘Bank Enforcement Actions and Related
Matters’’ at 3 (May 25, 2022), available at https://
www.occ.gov/news-issuances/bulletins/2023/
bulletin-2023-16.html.
39 ‘‘Verification’’ is the process by which the OCC
confirms that an institution has implemented the
agreed upon corrective actions to address a
deficient practice described in an MRA.
‘‘Validation’’ is the process by which the OCC
confirms the effectiveness and sustainability of
corrective actions that an institution has
implemented.
40 The OCC must determine through examination
or review of audit reports and work papers that the
institution’s corrective actions are sustainable.
41 OCC, Comptroller’s Handbook, ‘‘Bank
Supervision Process’’ at 46.
42 See Statement of the FDIC Board of Directors
on the Development and Communication of
Supervisory Recommendations, available at https://
www.fdic.gov/about/governance/
recommendations.html.
43 See FDIC, Risk Management Manual of
Examination Policies, Report of Examination
Instructions (last updated April 2024), at 16.1–8.
44 For the FDIC, MRAs would replace MRBAs
vision Process’’ at 46.
42 See Statement of the FDIC Board of Directors
on the Development and Communication of
Supervisory Recommendations, available at https://
www.fdic.gov/about/governance/
recommendations.html.
43 See FDIC, Risk Management Manual of
Examination Policies, Report of Examination
Instructions (last updated April 2024), at 16.1–8.
44 For the FDIC, MRAs would replace MRBAs.
powers provide the agencies with
authority to issue MRAs and
supervisory ratings.33
The OCC’s current practice is to use
MRAs to communicate concerns about
an institution’s ‘‘deficient practices.’’ 34
A deficient practice is a practice, or lack
of practice, that (1) ‘‘deviates from
sound governance, internal control, or
risk management principles and has the
potential to adversely affect the bank’s
condition, including financial
performance or risk profile, if not
addressed,’’ or (2) ‘‘results in
substantive noncompliance with laws or
regulations, enforcement actions, or
conditions imposed in writing in
connection with the approval of any
applications or other requests by the
[institution].’’ 35 The purpose of an
MRA, unlike other forms of supervisory
communications, is to bring a deficient
practice to the attention of the
institution’s board of directors and
management to ensure they address the
deficiency. An MRA is not intended to
serve as a vehicle for examiners to
recommend best practices or
enhancements to already acceptable
standards. When the OCC
communicates an MRA to an institution,
it includes a corrective action stating
what management or the board of
directors must do to address the concern
and eliminate the cause.36 An
institution is expected to develop an
action plan to detail how it intends to
correct the root causes of deficiencies
rather than symptoms.37 Although an
institution has discretion to develop an
adequate action plan as it deems
appropriate, the OCC retains the
ultimate authority to determine the
method and timeframe for corrective
action
address the concern
and eliminate the cause.36 An
institution is expected to develop an
action plan to detail how it intends to
correct the root causes of deficiencies
rather than symptoms.37 Although an
institution has discretion to develop an
adequate action plan as it deems
appropriate, the OCC retains the
ultimate authority to determine the
method and timeframe for corrective
action. The actions that an institution’s
board of directors and management take
or agree to take in response to concerns
in MRAs are factors in the OCC’s
decision to pursue an enforcement
action and the severity of that action.38
The OCC tracks an institution’s
MRAs, including whether they are open,
closed, past due, or pending validation.
Current OCC policies require that MRAs
must remain open until an institution
has implemented, and examiners have
verified and validated that the
institution has consistently adhered to,
an effective corrective action.39
Validation requires the institution to
demonstrate the corrective action is
effective over a reasonable period,
which may vary and is based on the
sustainability of the corrected practice,
not the institution’s condition.40
For matters that do not warrant an
MRA, examiners may offer informal
recommendations to the board of
directors and management related to
potential policy enhancements or best
practices.41 Recommendations do not
require specific corrective action or
follow-up by examiners, and the OCC
does not include recommendations in
formal written communications to
institutions, such as a report of
examination.
The FDIC’s current practice is to issue
Supervisory Recommendations,
including Matters Requiring Board
Attention (MRBAs), as part of its
supervisory process to communicate
weaknesses in a bank’s operations,
governance, or risk management
practices.42 These supervisory tools are
designed to promote timely corrective
action and to strengthen institutions’
overall safety and soundness
ion.
The FDIC’s current practice is to issue
Supervisory Recommendations,
including Matters Requiring Board
Attention (MRBAs), as part of its
supervisory process to communicate
weaknesses in a bank’s operations,
governance, or risk management
practices.42 These supervisory tools are
designed to promote timely corrective
action and to strengthen institutions’
overall safety and soundness.
MRBAs are used to inform an
institution of the FDIC’s views about
changes needed in its practices,
operations, or financial condition to
help institutions prioritize their efforts
to address examiner concerns, identify
emerging problems, and correct
deficiencies before the institution’s
condition deteriorates.43 Boards of
directors are expected to oversee
management’s development and
implementation of corrective measures
and to ensure timely resolution of the
matters. The FDIC reviews the status of
MRBAs in subsequent examinations or
through offsite monitoring to ensure
progress and remediation. The FDIC
tracks and categorizes MRBAs to enable
the agency to analyze and identify
trends related to risk supervision
findings.
Other Supervisory Recommendations
are issued to highlight deficiencies or
weaknesses that warrant management’s
attention but do not rise to the level of
MRBAs. These recommendations are
intended to promote sound governance,
risk management, and operational
practices and, if left unaddressed, may
escalate into more significant
supervisory concerns. Although these
Supervisory Recommendations do not
carry the same weight as MRBAs,
management is expected to consider and
respond to them and to implement
corrective action as appropriate.
The agencies each apply their
different standards for MRAs and
MRBAs (collectively, matters requiring
correction) to require institutions to
align their conduct with supervisory
expectations
concerns. Although these
Supervisory Recommendations do not
carry the same weight as MRBAs,
management is expected to consider and
respond to them and to implement
corrective action as appropriate.
The agencies each apply their
different standards for MRAs and
MRBAs (collectively, matters requiring
correction) to require institutions to
align their conduct with supervisory
expectations. But a common
denominator of the agencies’ current
practices for supervisory criticisms is
that examiners frequently issue matters
requiring correction to communicate
deficiencies beyond those that are
central to, or in many cases that are
directly relevant to, an institution’s
financial condition. The agencies do not
currently require examiners to find that
a practice is likely, or reasonably can be
expected, to materially harm the
financial condition of the institution. In
practice, an institution must address the
practices described in a matter requiring
correction, regardless of whether the
institution’s board of directors and
management consider the examiner’s
concerns to be accurate or important
enough to prioritize. The agencies’
expansive definition and application of
matters requiring correction has resulted
in a proliferation of supervisory
criticisms for immaterial procedural,
documentation, or other deficiencies
that distract management from
conducting business and that do not
clearly improve the financial condition
of institutions. In addition, in the
agencies’ supervisory experience, failure
to correct a deficient practice
communicated in a matter requiring
correction often eventually results in an
enforcement action
y
criticisms for immaterial procedural,
documentation, or other deficiencies
that distract management from
conducting business and that do not
clearly improve the financial condition
of institutions. In addition, in the
agencies’ supervisory experience, failure
to correct a deficient practice
communicated in a matter requiring
correction often eventually results in an
enforcement action.
To ensure supervision efforts are
appropriately focused on material
financial risks and increase consistency
in supervisory criticisms, the agencies
are issuing this joint proposal regarding
their standard for issuing matters
requiring correction, which would be in
the form of MRAs.44
The proposed rule would provide that
the agencies may only issue an MRA for
a practice, act, or failure to act, alone or
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Federal Register / Vol. 90, No. 208 / Thursday, October 30, 2025 / Proposed Rules
45 Banking and consumer financial protection
laws include the enumerated consumer laws under
the Consumer Financial Protection Act, 12 U.S.C.
5481(12), only with respect to institutions for which
the agencies have supervisory or enforcement
authority under such laws under 12 U.S.C. 5515–
5516.
46 Supervisory observations are separate and
distinct from requirements that the agencies impose
in connection with an application, notice, or other
request, including through a condition imposed in
writing under 12 U.S.C. 1818.
together with one or more other
practices, acts, or failures to act, that
s have supervisory or enforcement
authority under such laws under 12 U.S.C. 5515–
5516.
46 Supervisory observations are separate and
distinct from requirements that the agencies impose
in connection with an application, notice, or other
request, including through a condition imposed in
writing under 12 U.S.C. 1818.
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
institution; or (2) present a material risk
of loss to the DIF; or (B) has already
caused material harm to the financial
condition of the institution; or (2) is an
actual violation of a banking or banking-
related law or regulation.
Under the proposed rule, the phrases
‘‘materially harm the financial condition
of an institution,’’ ‘‘materially harmed
the financial condition of an
institution,’’ and ‘‘material risk of loss to
the Deposit Insurance Fund’’ would
have the same meaning for MRAs as
they would have for the proposed
definition of unsafe or unsound
practice. The proposed MRA standard
would accordingly focus supervisory
and institution resources on material
financial risks. Similar to the proposed
definition of an unsafe or unsound
practice, practices, acts, or failures to act
that are captured by the proposed MRA
standard would, in the vast majority of
cases, relate directly to risks of material
harm to the financial condition of an
institution or violations of certain laws
and regulations. Material financial risks
will, in the vast majority of cases, relate
directly, clearly and predictably to an
institution’s capital, asset quality,
earnings, liquidity, or sensitivity to
market risk
roposed MRA
standard would, in the vast majority of
cases, relate directly to risks of material
harm to the financial condition of an
institution or violations of certain laws
and regulations. Material financial risks
will, in the vast majority of cases, relate
directly, clearly and predictably to an
institution’s capital, asset quality,
earnings, liquidity, or sensitivity to
market risk. Additionally, the proposed
standard for an MRA, like the proposed
definition of an unsafe or unsound
practice, would cover a practice, act, or
failure to act that, ‘‘if continued,’’ has
the potential to materially harm the
financial condition of an institution.
As proposed, examiners could
communicate an MRA for a practice,
act, or failure to act that, if continued,
could reasonably be expected to, under
current or reasonably foreseeable
conditions, (A) materially harm the
financial condition of an institution or
(B) present a material risk of loss to the
DIF. The agencies intend for the ‘‘could
reasonably be expected to, under
current or reasonably foreseeable
conditions’’ element in the proposed
MRA standard to present a lower bar
than does the ‘‘likely’’ element in the
proposed unsafe or unsound practice
standard.
To determine whether a practice, act,
or failure to act, if continued, could
reasonably be expected to, under
current or reasonably foreseeable
conditions, materially harm the
financial condition of an institution, the
proposed rule relies on examiners’
judgments, based on objective facts and
sound reasoning. The proposal would
not permit examiners to issue MRAs
based on potential future conditions
that are possible but not reasonably
foreseeable. Nonetheless, ‘‘reasonably
foreseeable’’ does not necessarily mean
the most likely future outcome and
could include a range of possible
outcomes
itution, the
proposed rule relies on examiners’
judgments, based on objective facts and
sound reasoning. The proposal would
not permit examiners to issue MRAs
based on potential future conditions
that are possible but not reasonably
foreseeable. Nonetheless, ‘‘reasonably
foreseeable’’ does not necessarily mean
the most likely future outcome and
could include a range of possible
outcomes. For example, in late 2022, the
agencies could have considered it
‘‘reasonably foreseeable’’ that the federal
funds rate and other market interest
rates would rise considerably, and an
institution’s vulnerability to a
significant rise in interest rates could
have been grounds for an MRA.
However, the proposal would not
permit examiners to issue MRAs that
purport to meet the proposed MRA
standard as a pretext to force an
institution to comply with an
examiner’s managerial judgment instead
of the judgment of the institution’s own
management, in the absence of a
reasonable expectation of material harm
to the financial condition of the
institution.
Under the proposed MRA standard,
violations of banking or banking-related
laws and regulations must be actual
violations of a discrete set of federal and
state law or regulation—those related to
banking. This would generally include
banking and consumer financial
protection laws, but would not include
laws and regulations outside of the
banking and consumer finance context,
such as tax laws.45 Moreover, the
agencies would not issue an MRA solely
to address an institution’s policies,
procedures, or internal controls, unless
those policies, procedures, or internal
controls otherwise satisfied the
regulatory standard for an MRA, even if
those policies, procedures, or internal
controls could lead to a violation of law
or regulation
and consumer finance context,
such as tax laws.45 Moreover, the
agencies would not issue an MRA solely
to address an institution’s policies,
procedures, or internal controls, unless
those policies, procedures, or internal
controls otherwise satisfied the
regulatory standard for an MRA, even if
those policies, procedures, or internal
controls could lead to a violation of law
or regulation. Accordingly, under the
proposed rule, examiners could issue an
MRA for a practice, act, or failure to act
related to a violation of law or
regulation only if (1) the examiner
identified actual violations of a banking
or banking-related law or regulation (as
opposed to, for example, bank policies,
procedures, or programs that could lead
to violations of such laws or regulations)
or (2) the practice, act, or failure to act
meets the MRA standard in the
proposed rule relating to material
financial harm.
As discussed above, the agencies will
tailor their issuance of MRAs based on
the capital structure, riskiness,
complexity, activities, asset size, and
any financial risk-related factor that the
agencies deem appropriate. This
includes tailoring with respect to the
requirements or expectations set forth in
such actions as well as whether, and the
extent to which, such actions are taken.
The agencies also recognize that a
more targeted use of MRAs, as proposed
in this rule, may benefit from
complementary changes to the agencies’
MRA verification and validation
procedures to ensure MRAs are lifted as
soon as practicable after the institution
completes corrective actions. The
agencies note that, under current
practices, MRAs are often kept
outstanding for a prolonged period of
time after an institution has fully
completed its remediation of the
underlying practice, act, or failure to act
because examiners seek to see
demonstrated sustainability of the
remediation before an MRA is closed
on as practicable after the institution
completes corrective actions. The
agencies note that, under current
practices, MRAs are often kept
outstanding for a prolonged period of
time after an institution has fully
completed its remediation of the
underlying practice, act, or failure to act
because examiners seek to see
demonstrated sustainability of the
remediation before an MRA is closed.
This practice has the potential to
distract an institution’s board of
directors and management, as well as
examiners, by inflating the number of
MRAs based on practices, acts, or
failures to act that have already been
remediated. The agencies invite
comment on ways in which the agencies
can improve their respective MRA
verification and validation policies and
procedures.
Informal Supervisory Communications
For concerns that do not rise to the
level of an MRA, agency examiners may
informally provide non-binding
suggestions to enhance an institution’s
policies, practices, condition, or
operations.46 The OCC refers to these
communications as ‘‘supervisory
observations.’’ For example, examiners
could offer suggestions on ways to
enhance an institution’s external audit
practices, succession planning, or risk
management processes. Given that these
supervisory communications are not
binding, the agencies would not be
permitted to require an institution to
submit an action plan to incorporate
examiners’ supervisory observations.
Examiners would not be permitted, and
the institution would not be required, to
track the institution’s adoption or
implementation of examiner
suggestions. Although examiners would
be permitted to informally make such
supervisory communications to the
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not be permitted, and
the institution would not be required, to
track the institution’s adoption or
implementation of examiner
suggestions. Although examiners would
be permitted to informally make such
supervisory communications to the
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Federal Register / Vol. 90, No. 208 / Thursday, October 30, 2025 / Proposed Rules
47 This refers to an institution’s composite rating
under the Uniform Financial Institution Rating
System (UFIRS). Currently, the UFIRS incorporates
six individual component ratings: capital, asset
quality, management, earnings, liquidity, and
sensitivity to market risk. The UFIRS also
incorporates a composite rating, which functions as
an overall assessment of the financial institution.
The composite rating generally bears a close
relationship to the component ratings assigned, but
the composite rating is not derived by computing
an arithmetic average of the component ratings. For
federal branches and agencies of foreign banks, this
refers to the institution’s composite rating under the
rating system applicable to federal branches and
agencies of foreign banks.
48 The agencies would not necessarily expect to
issue a new MRA or take an additional enforcement
action before further downgrades in an institution’s
composite rating unless the additional downgrade
was based on new concerns or there is further
deterioration in the institution’s condition.
49 OCC, Comptroller’s Handbook, ‘‘Bank
Supervision Process’’ at 71.
50 For example, a less-than-satisfactory composite
rating may limit an institution’s ability to engage in
interstate mergers, establish a de novo interstate
branch, or control or hold an interest in certain
subsidiaries. See 12 U.S.C. 24a, 36(g), 1831u,
1843(m)
here is further
deterioration in the institution’s condition.
49 OCC, Comptroller’s Handbook, ‘‘Bank
Supervision Process’’ at 71.
50 For example, a less-than-satisfactory composite
rating may limit an institution’s ability to engage in
interstate mergers, establish a de novo interstate
branch, or control or hold an interest in certain
subsidiaries. See 12 U.S.C. 24a, 36(g), 1831u,
1843(m).
institution’s board of directors, the
institution’s management would not be
required to present the supervisory
communications to the institution’s
board of directors. In addition, the
agencies would not be permitted to
criticize an institution for declining to
remediate a concern or weakness
identified by such a supervisory
communication or to escalate the
communication into an MRA on the sole
basis of an institution’s lack of adoption
of an examiner’s suggestion offered in
multiple examination cycles. If an
institution’s condition deteriorates
following a supervisory communication,
the circumstances underlying the
supervisory communication could later
be the basis for an MRA or enforcement
action, but only if the criteria for an
MRA or enforcement action under the
proposal are satisfied, and not solely on
the basis of failing to respond to the
supervisory communication. This
framework would allow examiners to
share their expertise with management
and the board of directors about
potential enhancements while leaving
decisions regarding the implementation
of any enhancements to the institution.
In addition, the agencies would also
be permitted to include supervisory
communications in a report of
examination to explain changes in
ratings
ry communication. This
framework would allow examiners to
share their expertise with management
and the board of directors about
potential enhancements while leaving
decisions regarding the implementation
of any enhancements to the institution.
In addition, the agencies would also
be permitted to include supervisory
communications in a report of
examination to explain changes in
ratings. For example, if a bank is
downgraded from a ‘‘1’’ to a ‘‘2’’ in a
particular CAMELS component, the
agency may explain this downgrade,
and such an explanation would
constitute a ‘‘supervisory
communication.’’ As noted above, such
an explanation would not impose any
binding requirement on an institution to
remediate any weakness identified, and
the agency could not further downgrade
the institution solely on the basis of
failing to remediate such a weakness.
C. Composite Ratings Downgrades
The agencies believe that the changes
to the standards for unsafe or unsound
practices and MRAs in the proposed
rule are important to prioritize material
financial risks and compliance with
banking and banking-related laws and
regulations. In furtherance of the
agencies’ goal to prioritize attention on
material financial risks and legal
compliance, the agencies also expect
that any downgrade in an institution’s
composite supervisory rating to less-
than-satisfactory 47 would only occur in
circumstances in which the institution
receives an MRA that meets the
standard outlined in the proposed rule
or an enforcement action pursuant to
the agencies’ enforcement authority,
including an enforcement action based
on an unsafe or unsound practice as
defined in the proposed rule.48 In the
case of an insured depository
institution, a composite rating of ‘‘3’’ in
the CAMELS rating systems is generally
considered ‘‘less-than-satisfactory.’’ 49 A
downgrade to a less-than-satisfactory
composite supervisory rating can have
significant regulatory and statutory
consequences for an institution.50 By
connecting t
unsafe or unsound practice as
defined in the proposed rule.48 In the
case of an insured depository
institution, a composite rating of ‘‘3’’ in
the CAMELS rating systems is generally
considered ‘‘less-than-satisfactory.’’ 49 A
downgrade to a less-than-satisfactory
composite supervisory rating can have
significant regulatory and statutory
consequences for an institution.50 By
connecting the assignment of a less-
than-satisfactory composite rating to the
issuance of MRAs and enforcement
actions, the agencies would generally
ensure a less-than-satisfactory
composite rating is tied to a potential
material harm to the institution’s
financial condition, potential material
risk of loss to the DIF, actual material
harm to the institution’s financial
condition, or actual violations of certain
laws and regulations. Although section
8 of the FDI Act provides for grounds for
an enforcement action based on a
violation of law, the agencies expect
that they would not downgrade an
institution’s composite rating to less-
than-satisfactory based only on a
violation of law, unless such practice,
act, or failure to act that results in the
violation of law also is likely to cause
material harm to the financial condition
of the institution, is likely to present a
material risk of loss to the DIF, or has
caused material harm to the institution’s
financial condition, as the agencies
propose under the unsafe or unsound
practice definition.
III
violation of law, unless such practice,
act, or failure to act that results in the
violation of law also is likely to cause
material harm to the financial condition
of the institution, is likely to present a
material risk of loss to the DIF, or has
caused material harm to the institution’s
financial condition, as the agencies
propose under the unsafe or unsound
practice definition.
III. Request for Comments
The agencies request feedback on all
aspects of the proposed rule, including:
Question 1: What effect would the
proposed rule have on the agencies’
ability to address misconduct by
institutions under their enforcement
and supervisory authority? What effect
would the proposed rule have on the
agencies’ ability to address misconduct
by institution-affiliated parties under
their enforcement and supervisory
authority?
Question 2: Does the proposed
definition of unsafe or unsound practice
appropriately capture the types of
objectionable practices, acts, or failures
to act that should be captured? Please
explain.
Question 3: Does the proposed
definition of unsafe or unsound practice
provide the agencies with adequate
authority to proactively address risks
that could cause a precipitous decline
in an institution’s financial condition,
such as a liquidity event or a
cybersecurity incident?
Question 4: Other than ‘‘material,’’
are there terms that the agencies should
consider to specify the magnitude of the
risk required for a practice, act, or
failure to act, to be considered an
unsafe or unsound practice, e.g.,
‘‘abnormal,’’ ‘‘significant,’’ or ‘‘undue’’?
Question 5: Is ‘‘likely’’ the appropriate
standard to specify the probability of
risk required for a practice, act, or
failure to act, to be considered an
unsafe or unsound practice? Is another
term more appropriate, e.g., ‘‘reasonably
foreseeable,’’ ‘‘could reasonably,’’
‘‘imminent,’’ ‘‘abnormal probability’’?
Should the agencies specify a minimum
percentage of likelihood? If so, what
would be an appropriate m
’ the appropriate
standard to specify the probability of
risk required for a practice, act, or
failure to act, to be considered an
unsafe or unsound practice? Is another
term more appropriate, e.g., ‘‘reasonably
foreseeable,’’ ‘‘could reasonably,’’
‘‘imminent,’’ ‘‘abnormal probability’’?
Should the agencies specify a minimum
percentage of likelihood? If so, what
would be an appropriate minimum
percentage of likelihood? Should the
agencies consider a standard that does
not imply an assessment of a forward-
looking probability?
Question 6: Should the agencies
consider specifying one or more
quantitative measurements to define or
exemplify ‘‘material harm’’ to the
financial condition of the institution?
Question 7: Should the agencies
define ‘‘materially’’ in the regulation? If
so, how?
Question 8: Should the agencies
define harm to the financial condition
of an institution in the regulation? If so,
how? Should this include specific
indicators or thresholds, or adverse
effects to capital, liquidity, or earnings?
Question 9: Section 8 of the FDI Act
uses the term ‘‘unsafe or unsound
practice’’ numerous times and in
different contexts. Should the proposed
definition of unsafe or unsound practice
apply to all uses of the term within
section 8 of the FDI Act? If not, what
provisions should be excluded? Should
the agencies have a uniform definition
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in
different contexts. Should the proposed
definition of unsafe or unsound practice
apply to all uses of the term within
section 8 of the FDI Act? If not, what
provisions should be excluded? Should
the agencies have a uniform definition
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Federal Register / Vol. 90, No. 208 / Thursday, October 30, 2025 / Proposed Rules
for purposes of section 8, as proposed,
or should there be nuances depending
on the context?
Question 10: Should the proposed
definition of unsafe or unsound practice
apply to other uses of the term or
references to section 8 of the FDI Act
within Title 12 of the CFR? If so, what
provisions should be included? What, if
any, effect would the proposed
definition have on the agencies’ ability
to engage in rulemaking?
Question 11: Should the proposed
definition of unsafe or unsound practice
apply to uses of the term beyond section
8 of the FDI Act? If yes, what provisions
should be included? For example:
—Tier 2 and Tier 3 Civil Money Penalty
provisions (12 U.S.C. 93, 504, 1817,
1972).
—Capital standards in 12 U.S.C.
1464(t).
—Definition of institution-affiliated
party in 12 U.S.C. 1813(u).
—Grounds for appointing a conservator
or receiver in 12 U.S.C. 1821(c)(5).
Question 12: Is the agencies’ use of
the term ‘‘generally accepted standards
of prudent operations,’’ as described in
this proposal, appropriate for making
safety and soundness determinations?
Are there are other terms the agencies
should consider using instead?
Question 13: Other than ‘‘could
reasonably be expected,’’ are there
terms that the agencies should consider
to specify the probability of risk
required for a practice, act, or failure to
act, to be communicated as an MRA,
e.g., ‘‘could possibly,’’ ‘‘could
foreseeably,’’ ‘‘would’’? Is this standard
sufficiently distinct from the likelihood
requirement for unsafe or unsound
pr
ng instead?
Question 13: Other than ‘‘could
reasonably be expected,’’ are there
terms that the agencies should consider
to specify the probability of risk
required for a practice, act, or failure to
act, to be communicated as an MRA,
e.g., ‘‘could possibly,’’ ‘‘could
foreseeably,’’ ‘‘would’’? Is this standard
sufficiently distinct from the likelihood
requirement for unsafe or unsound
practices so as to convey a lower bar?
Question 14: The proposal would
allow the agencies to issue MRAs based
on ‘‘reasonably foreseeable conditions.’’
Is ‘‘reasonably foreseeable’’ the right
standard? As an example, at what point
in Silicon Valley Bank’s timeline would
an MRA for weaknesses in interest rate
risk management have been (1)
appropriate and (2) permissible under
the proposal? If another standard would
be more appropriate, please explain.
Question 15: If the agencies adopt the
proposed standard for the issuance of
an MRA, how should the agencies
determine when to close an MRA?
Should the agencies provide additional
clarity in a final rule? Are there unique
verification and validation concerns
associated with the proposed standard
that the agencies should consider?
Should verification and validation
procedures be tailored for different
types of institutions, considering factors
like the sophistication of an institution
and the frequency of examinations?
Should there be a limit (e.g., one or two
quarters; one examination cycle) to the
duration that an MRA may remain open
after an institution corrects the practice
resulting in the MRA? If an MRA is not
remediated for a certain period of time,
what steps should the agencies take?
Question 16: Should the proposal
provide any clarity around timeframes
for remediating MRAs? If so, should
small institutions (and those with
limited resources) be provided with
longer timeframes to address MRAs?
Should institutions with more severe
vulnerabilities (such as 5-rated
institutions) be provided shorter
timeframes?
Question 17: Should
,
what steps should the agencies take?
Question 16: Should the proposal
provide any clarity around timeframes
for remediating MRAs? If so, should
small institutions (and those with
limited resources) be provided with
longer timeframes to address MRAs?
Should institutions with more severe
vulnerabilities (such as 5-rated
institutions) be provided shorter
timeframes?
Question 17: Should the proposed
standard for issuing MRAs also apply to
issuing violations of law? Why or why
not? If a different standard should
apply, please describe the standard and
explain why. If the agencies did not use
MRAs for violations of law, how should
the agencies approach violations of law?
Question 18: Under the proposal, the
agencies could cite violations of banking
and banking-regulated laws or
regulations as MRAs. Is ‘‘banking and
banking-related’’ the right universe?
Should the agencies provide additional
clarity on what constitutes banking and
banking-related laws? If so, what should
be included? Should the agencies limit
the scope of banking and banking-
related laws to federal banking and
banking-related law? Why or why not?
Question 19: Should the agencies
provide additional clarity on the
interplay between MRAs and CAMELS
ratings? If so, how?
Question 20: Should the agencies
require any downgrade to a CAMELS
composite rating of 3 or below to be
accompanied by an MRA or
enforcement action? Are there instances
in which, for example, general economic
conditions or idiosyncratic risk factors
could cause financial deterioration
without evidence of objectionable
practices, acts, or failures to act? Could
such a provision incentivize issuing
more MRAs? Please explain
quire any downgrade to a CAMELS
composite rating of 3 or below to be
accompanied by an MRA or
enforcement action? Are there instances
in which, for example, general economic
conditions or idiosyncratic risk factors
could cause financial deterioration
without evidence of objectionable
practices, acts, or failures to act? Could
such a provision incentivize issuing
more MRAs? Please explain.
Question 21: To what extent should
the agencies use MRAs to address banks
that are vulnerable to potential
economic or other shocks? For example,
before the Federal Reserve began raising
interest rates in 2022, or shortly after it
began raising interest rates, at what
point, if any, would it have been
appropriate for a banking agency to
issue MRAs to institutions that were
vulnerable to a rise in interest rates?
Does the proposal appropriately allow
MRAs in such cases, if applicable?
Under the proposal, are there other
supervisory tools to address such risks?
Question 22: How should the agencies
tailor the framework for community
banks? For example, should there be
different standards for institutions of
different sizes and complexity? Please
explain.
Question 23: Should the proposal tie
material harm to the financial condition
of an institution more specifically to the
impact of a practice, act or failure to act
on the institution’s capital? Should
there be a higher standard for large
banking organizations compared to all
other banking organizations? Should the
potential or actual harm to an
institution’s financial condition be tied
to the capital standards in the prompt
correction action framework set forth in
12 U.S.C
itution more specifically to the
impact of a practice, act or failure to act
on the institution’s capital? Should
there be a higher standard for large
banking organizations compared to all
other banking organizations? Should the
potential or actual harm to an
institution’s financial condition be tied
to the capital standards in the prompt
correction action framework set forth in
12 U.S.C. 1831o?
Question 24: Should the proposed
regulation tie material harm to the
financial condition of an institution
more specifically to the impact of a
practice, act or failure to act on the
institution’s liquidity? Should there be a
threshold for a liquidity event, such as
an outflow of a hypothetical percentage
of an institution’s short-term deposits or
other short-term liabilities over a
defined period?
Question 25: How should the
proposed regulation interact with the
Interagency Guidelines Establishing
Safety and Soundness Standards
promulgated under 12 U.S.C. 1831p–1
(e.g., 12 CFR part 30) (Safety and
Soundness Standards)? Should the
agencies similarly revise the Safety and
Soundness Standards in a manner
consistent with the proposed regulation?
Should a violation of the Safety and
Soundness standards be considered a
violation of banking or banking-related
law or regulation for purposes of the
proposed regulation?
Question 26: What additional steps
should the agencies consider to reform
supervision, consistent with the goals of
the proposal? The agencies have an
extensive supervisory framework
including examination manuals,
regulations, guidance, and internal
procedures governing how banks are
supervised. What modifications to these
various documents are warranted? How
should the agencies sequence these
actions?
IV
ditional steps
should the agencies consider to reform
supervision, consistent with the goals of
the proposal? The agencies have an
extensive supervisory framework
including examination manuals,
regulations, guidance, and internal
procedures governing how banks are
supervised. What modifications to these
various documents are warranted? How
should the agencies sequence these
actions?
IV. Expected Effects
As previously discussed, the agencies
propose to revise the framework for
communicating MRAs to supervised
insured depository institutions (IDIs) to
focus on practices, acts, or failures to act
that, if continued, could reasonably be
expected to, under current or reasonably
foreseeable conditions, (A) materially
harm the financial condition of an
institution or (B) present a material risk
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51 44 U.S.C. 3501–3521.
52 Id.
53 Based on data accessed using the OCC’s
Financial Institutions Data Retrieval System on
September 8, 2025.
of loss to the DIF, or violations of a
banking or banking-related law or
regulation. The proposal would provide
a consistent nationwide standard for the
issuance of MRAs to promote greater
clarity for IDIs and IDI-affiliated parties.
This analysis utilizes all regulations
and guidance applicable to IDIs
supervised by the agencies, as well as
information on the financial condition
of supervised IDIs as of the quarter
ending June 30, 2025, as the baseline to
which the effects of the proposed rule
are estimated.
Scope
The proposal, if adopted, would not
impose any obligations on supervised
IDIs, and supervised IDIs would not
need to take any action in response to
this rule
icable to IDIs
supervised by the agencies, as well as
information on the financial condition
of supervised IDIs as of the quarter
ending June 30, 2025, as the baseline to
which the effects of the proposed rule
are estimated.
Scope
The proposal, if adopted, would not
impose any obligations on supervised
IDIs, and supervised IDIs would not
need to take any action in response to
this rule. The proposal, if adopted,
would require the agencies to revise
their current practices regarding the
identification and communication of
examination findings. Therefore, the
agencies would be the only entities
directly affected by the proposal.
The proposal would indirectly affect
supervised IDIs through examinations
and reports of examination (ROEs)
conducted by the agencies. All IDIs
subject to examinations by the agencies
as of June 30, 2025 could be indirectly
affected proposal. Only a subset of IDIs
are examined every year, therefore the
proposed rule could indirectly affect a
subset of supervised IDIs each year.
Costs and Benefits
The following sections discuss
qualitatively some indirect benefits and
indirect costs of the proposal.
Indirect Benefits to IDIs
The proposal, if adopted, would pose
two types of indirect benefits to
supervised IDIs: (1) reductions in, or
more efficient use of, costs to comply
with findings from ROEs, and (2)
possible increases in proceeds from the
provision of banking products and
services. By raising the standard against
which an IDI’s action, or inaction, is
assessed to be eligible for an MRA, IDIs
may experience lower volumes of
examination findings, particularly
MRAs. Further, by potentially reducing
the number of examination findings not
related to material risks to the financial
condition of the IDI, the proposed rule
may enable IDIs that do receive MRAs
to more effectively address those risks
ainst
which an IDI’s action, or inaction, is
assessed to be eligible for an MRA, IDIs
may experience lower volumes of
examination findings, particularly
MRAs. Further, by potentially reducing
the number of examination findings not
related to material risks to the financial
condition of the IDI, the proposed rule
may enable IDIs that do receive MRAs
to more effectively address those risks.
Finally, by enacting a consistent
definition of conditions that merit the
use of MRAs across the agencies, the
proposed rule may improve clarity and
reduce uncertainty of ROE findings,
relative to the baseline. Such reductions
in findings and increases in clarity may
reduce compliance costs or increase the
efficiency with which compliance costs
are expended by IDIs to respond to ROE
findings. The agencies do not have the
information necessary to quantify such
potential indirect benefits.
Negative feedback from regulators
during the examination process may
discourage IDIs from taking part in
activity and could result in reduced
provision of banking products and
services. To the extent that matters
requiring the attention of an
institution’s board of directors and
management are currently identified
and used in a way that raises potential
chilling effects, the proposal could
result in fewer such effects relative to
the baseline. A reduction in chilling
effects could enable IDIs to provide
financial products and services to
entities that they would not have
otherwise. The FDIC does not have the
data necessary to quantify this potential
benefit.
Indirect Costs to IDIs
If adopted the proposed rule may
reduce the volume of examination
findings communicated to IDIs and this
could pose certain indirect costs. To the
extent that the proposed rule, if
adopted, delayed the identification of
material risks to the financial condition
of an IDI, such entities could incur
higher costs to resolve such issues,
associated losses, and in extreme cases,
failure
IDIs
If adopted the proposed rule may
reduce the volume of examination
findings communicated to IDIs and this
could pose certain indirect costs. To the
extent that the proposed rule, if
adopted, delayed the identification of
material risks to the financial condition
of an IDI, such entities could incur
higher costs to resolve such issues,
associated losses, and in extreme cases,
failure. However, as previously
discussed, the agencies believe that
proposed definition of unsafe or
unsound practice better prioritizes the
identification and communication of
such risks. Therefore, the agencies
believe that such costs are unlikely to be
substantial. Moreover, it is also possible
that under the proposal risks to IDIs and
risks of IDI failures could decrease
significantly, because under the
proposal IDI management and
examiners would prioritize the
identification and remediation of issues
that could result in material financial
loss to IDIs.
V. Alternatives Considered
The agencies considered leaving the
current regulatory framework
unchanged. However, as previously
discussed, the current methods for
communicating certain supervisory
examination findings can promote
confusion or not appropriately focus
supervisory and institution resources on
the most critical financial risks to
institutions and the financial system.
Therefore, the agencies believe that the
proposal is more appropriate.
VI. Regulatory Analyses
Paperwork Reduction Act
The Paperwork Reduction Act of
1995 51 (PRA) states that no agency may
conduct or sponsor, nor is the
respondent required to respond to, an
information collection unless it displays
a currently valid Office of Management
and Budget (OMB) control number. The
agencies have reviewed this proposed
rule and determined that it does not
create any information collection or
revise any existing collection of
information. Accordingly, no PRA
submissions to OMB will be made with
respect to this proposed rule
required to respond to, an
information collection unless it displays
a currently valid Office of Management
and Budget (OMB) control number. The
agencies have reviewed this proposed
rule and determined that it does not
create any information collection or
revise any existing collection of
information. Accordingly, no PRA
submissions to OMB will be made with
respect to this proposed rule.
Regulatory Flexibility Act
The Regulatory Flexibility Act 52
(RFA) requires an agency to consider the
impact of its proposed rules on small
entities. In connection with a proposed
rule, the RFA generally requires an
agency to prepare an Initial Regulatory
Flexibility Analysis (IRFA) describing
the impact of the rule on small entities,
unless the head of the agency certifies
that the proposed rule will not have a
significant economic impact on a
substantial number of small entities and
publishes such certification along with
a statement providing the factual basis
for such certification in the Federal
Register. An IRFA must contain: (1) a
description of the reasons why action by
the agency is being considered; (2) a
succinct statement of the objectives of,
and legal basis for, the proposed rule;
(3) a description of and, where feasible,
an estimate of the number of small
entities to which the proposed rule will
apply; (4) a description of the projected
reporting, recordkeeping, and other
compliance requirements of the
proposed rule, including an estimate of
the classes of small entities that will be
subject to the requirements and the type
of professional skills necessary for
preparation of the report or record; (5)
an identification, to the extent
practicable, of all relevant Federal rules
that may duplicate, overlap with, or
conflict with the proposed rule; and (6)
a description of any significant
alternatives to the proposed rule that
accomplish its stated objectives.
1
will be
subject to the requirements and the type
of professional skills necessary for
preparation of the report or record; (5)
an identification, to the extent
practicable, of all relevant Federal rules
that may duplicate, overlap with, or
conflict with the proposed rule; and (6)
a description of any significant
alternatives to the proposed rule that
accomplish its stated objectives.
1. OCC
The OCC currently supervises 1,012
institutions (commercial banks, trust
companies, Federal savings
associations, and branches or agencies
of foreign banks),53 of which
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54 The OCC bases its estimate of the number of
small entities on the Small Business
Administration’s size thresholds for commercial
banks and savings institutions, and trust
companies, which are $850 million and $47
million, respectively. Consistent with the General
Principles of Affiliation, 13 CFR 121.103(a), the
OCC counted the assets of affiliated financial
institutions when determining if it should classify
an OCC-supervised institution as a small entity. The
OCC used average quarterly assets in December 31,
2024 to determine size because a ‘‘financial
institution’s assets are determined by averaging the
assets reported on its four quarterly financial
statements for the preceding year.’’ See footnote 8
of the U.S. Small Business Administration’s Table
of Size Standards.
55 SBA defines a small banking organization as
having $850 million or less in assets, where an
organization’s ‘‘assets are determined by averaging
the assets reported on its four quarterly financial
statements for the preceding year.’’ See 13 CFR
121.201 (as amended by 87 FR 69118, effective
December 19, 2022)
footnote 8
of the U.S. Small Business Administration’s Table
of Size Standards.
55 SBA defines a small banking organization as
having $850 million or less in assets, where an
organization’s ‘‘assets are determined by averaging
the assets reported on its four quarterly financial
statements for the preceding year.’’ See 13 CFR
121.201 (as amended by 87 FR 69118, effective
December 19, 2022). In its determination, the ‘‘SBA
counts the receipts, employees, or other measure of
size of the concern whose size is at issue and all
of its domestic and foreign affiliates.’’ See 13 CFR
121.103. Following these regulations, the FDIC uses
an insured depository institution’s affiliated and
acquired assets, averaged over the preceding four
quarters, to determine whether the insured
depository institution is ‘‘small’’ for the purposes of
the RFA.
56 5 U.S.C. 603(b)(4).
57 See, e.g., Calcutt v. FDIC, 37 F.4th 293, 325 (6th
Cir. 2022), rev’d on other grounds, 598 U.S. 623
(2023) (citing Seidman, 37 F.3d at 926–27)
(‘‘[Twelve U.S.C. 1818] does not define an ‘unsafe
or unsound practice,’ and the term is interpreted
flexibly.’’); id. at 353–57 (Murphy, J., dissenting)
(discussing circuit split and reliance on legislative
history as opposed to plain text); see also Greene
Cnty. Bank, 92 F.3d at 636.
58 A depository institution generally refers to an
insured depository institution as defined in 12
U.S.C. 1813(c)(2); any national banking association
chartered by the OCC, including an uninsured
association; or a branch or agency of a foreign bank.
Refer to specific provisions of 12 U.S.C. 1818
regarding their applicability to a specific
institution. See 12 U.S.C. 1818(b)(4)–(5).
59 See id. 1813(u).
60 FDIC Call Report Data, June 30, 2025
insured depository institution as defined in 12
U.S.C. 1813(c)(2); any national banking association
chartered by the OCC, including an uninsured
association; or a branch or agency of a foreign bank.
Refer to specific provisions of 12 U.S.C. 1818
regarding their applicability to a specific
institution. See 12 U.S.C. 1818(b)(4)–(5).
59 See id. 1813(u).
60 FDIC Call Report Data, June 30, 2025.
approximately 609 are small entities
under the RFA.54
In general, the OCC classifies the
economic impact on an individual small
entity as significant if the total
estimated impact in one year is greater
than 5 percent of the small entity’s total
annual salaries and benefits or greater
than 2.5 percent of the small entity’s
total non-interest expense. Furthermore,
the OCC considers 5 percent or more of
OCC-supervised small entities to be a
substantial number, and at present, 30
OCC-supervised small entities would
constitute a substantial number.
Therefore, since the proposed rule
would affect all OCC-supervised
institutions, a substantial number of
OCC-supervised small entities would be
impacted.
This proposed rulemaking imposes no
new mandates, and thus no direct costs,
on affected OCC-supervised institutions.
Therefore, the proposed rule would not
have a significant economic impact on
a substantial number of small entities.
2. FDIC
Generally, the FDIC considers a
significant economic impact to be a
quantified effect in excess of 5 percent
of total annual salaries and benefits or
2.5 percent of total noninterest
expenses. The FDIC believes that effects
in excess of one or more of these
thresholds typically represent
significant economic impacts for FDIC-
insured institutions.
The FDIC believes that the proposed
rule will not have a significant
economic impact on a substantial
number of small entities 55 because the
proposed rule will not pose reporting,
recordkeeping and other compliance
requirements 56 on small, FDIC-
supervised IDIs
in excess of one or more of these
thresholds typically represent
significant economic impacts for FDIC-
insured institutions.
The FDIC believes that the proposed
rule will not have a significant
economic impact on a substantial
number of small entities 55 because the
proposed rule will not pose reporting,
recordkeeping and other compliance
requirements 56 on small, FDIC-
supervised IDIs. However, the proposed
rule could present significant indirect
benefits to small, FDIC-supervised IDIs.
Therefore, the FDIC is presenting an
Initial Regulatory Flexibility Act
Analysis in this section.
Reasons Why This Action Is Being
Considered
The lack of a consistent nationwide
standard about the scope of the term
unsafe or unsound practice, as
interpreted by the courts, has caused
uncertainty for institutions and
institution-affiliated parties.57 The
proposed regulatory definition would
provide a consistent nationwide
standard to reduce burden and provide
greater clarity for institutions and
institution-affiliated parties.
Policy Objectives
The policy objectives are to promote
greater clarity and certainty regarding
enforcement and supervision standards
so that examiners and IDIs prioritize
material financial risks to IDIs and avoid
unnecessary regulatory burden.
Legal Basis
Pursuant to the provisions of section
8 of the FDI Act (12 U.S.C. 1818), the
FDIC is authorized to take enforcement
actions against depository institutions,58
and institution-affiliated parties 59 that
have engaged in an ‘‘unsafe or unsound
practice.’’ Under this authority, the
FDIC is proposing to define by
regulation the term ‘‘unsafe or unsound
practice’’ for purposes of section 8 of the
FDI Act. For a more detailed discussion
of the proposed rule’s legal basis please
refer to section A. Unsafe or Unsound
Practices, within Section II of the
preamble
tution-affiliated parties 59 that
have engaged in an ‘‘unsafe or unsound
practice.’’ Under this authority, the
FDIC is proposing to define by
regulation the term ‘‘unsafe or unsound
practice’’ for purposes of section 8 of the
FDI Act. For a more detailed discussion
of the proposed rule’s legal basis please
refer to section A. Unsafe or Unsound
Practices, within Section II of the
preamble.
Description of the Rule
The agencies propose implementing a
definition of unsafe or unsound practice
for purposes of section 8 of the FDI Act
that would focus on material risks to the
financial condition of an IDI and require
the likelihood that an imprudent
practice, act, or omission, if continued,
would pose a material risk to the IDI’s
financial condition. The agencies are
also proposing to establish uniform
standards for examiners’
communication of MRAs. Under the
proposed rule, an examiner would be
permitted to issue an MRA to address
certain risks to the financial condition
of an institution. For a more detailed
description of the proposal please refer
to section A. Unsafe or Unsound
Practices, within Section II of the
preamble.
Small Entities Affected
The proposal, if adopted, would not
impose any obligations on small, FDIC-
supervised entities, and supervised
entities would not need to take any
action in response to this rule. The
proposal, if adopted, would require the
FDIC to revise their current practices
regarding the communication of IDI
examination findings. Therefore, the
FDIC would be the only entity directly
affected by the proposal.
The proposal would indirectly affect
small, FDIC-supervised IDIs through
examinations and reports of
examinations conducted by the
agencies
ion in response to this rule. The
proposal, if adopted, would require the
FDIC to revise their current practices
regarding the communication of IDI
examination findings. Therefore, the
FDIC would be the only entity directly
affected by the proposal.
The proposal would indirectly affect
small, FDIC-supervised IDIs through
examinations and reports of
examinations conducted by the
agencies. As of the quarter ending June
30, 2025, the FDIC supervised 2,808
IDIs, of which 2,085 are small entities
for the purposes of the RFA.60 Only a
subset of small, FDIC-supervised IDIs
are examined every year, therefore the
proposed rule could indirectly affect a
subset of small, FDIC-supervised IDIs
each year.
Cost and Benefits
To estimate the expected effects of the
proposal, this analysis considers all
relevant regulations and guidance
applicable to these institutions, as well
as information on the financial
condition of all IDIs as of the quarter
ending June 30, 2025.
The proposal, if adopted, would pose
two types of indirect benefits to small,
FDIC-supervised IDIs: (1) reductions in,
or more efficient use of, costs to comply
with findings from ROEs, and (2)
possible increases in proceeds from the
provision of banking products and
services. By raising the standard against
which an IDI’s action, or inaction, is
assessed to be eligible for an MRA, IDIs
may experience lower volumes of
examination findings, particularly
MRAs. Further, by potentially reducing
the number of examination findings not
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ard against
which an IDI’s action, or inaction, is
assessed to be eligible for an MRA, IDIs
may experience lower volumes of
examination findings, particularly
MRAs. Further, by potentially reducing
the number of examination findings not
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61 FDIC Call Report Data, June 30, 2025.
62 2 U.S.C. 1531 et seq.
63 Id. 1532.
related to material risks to the financial
condition of the IDI, the proposed rule
may enable IDIs that do receive MRAs
to more effectively address those risks.
Finally, by enacting a consistent
definition of conditions that merit the
use of MRAs across agencies the
proposed rule may improve clarity and
reduce uncertainty of ROE findings,
relative to the baseline. Such reductions
in findings and increases in clarity may
reduce compliance costs or increase the
efficiency with which compliance costs
are expended by IDIs to respond to ROE
findings. The agencies do not have the
information necessary to quantify such
potential indirect benefits.
Negative feedback from regulators
during the examination process may
discourage IDIs from taking part in
activity and could result in reduced
provision of banking products and
services. To the extent that matters
requiring the attention of an
institution’s board of directors and
management are currently identified
and used in a way that raises potential
chilling effects by, the proposal could
result in fewer such effects relative to
the baseline. A reduction in chilling
effects could enable IDIs to provide
financial products and services to
entities that they would not have
otherwise. The FDIC does not have the
data necessary to quantify this potential
benefit
management are currently identified
and used in a way that raises potential
chilling effects by, the proposal could
result in fewer such effects relative to
the baseline. A reduction in chilling
effects could enable IDIs to provide
financial products and services to
entities that they would not have
otherwise. The FDIC does not have the
data necessary to quantify this potential
benefit. Moreover, it is also possible that
under the proposal risks to small, FDIC-
supervised IDIs and risks of IDI failures
could decrease significantly, because
under the proposal IDI management and
examiners would prioritize the
identification and remediation of issues
that could result in material financial
loss to IDIs.
FDIC cannot quantitatively estimate
the indirect effects that small, FDIC-
supervised IDIs are likely to incur if the
proposed rule were adopted. However,
in the four quarters ending June 30th,
2025, 5 percent of total annual salaries
and benefits or 2.5 percent of total
noninterest expenses amounts to
$139,850 and $124,175, respectively, for
the median small, FDIC-supervised
institution.61 The indirect benefits that
a small, FDIC-supervised institution
could realize as a result of the proposed
rule would depend on changes in the
volume of findings of examination and
the compliance costs to address those
examination findings, relative to the
baseline. The proposed rule would
establish a definition of unsafe or
unsound practice that would result in
issuances of MRAs only where a
practice, act, or failure to act that, if
continued, could reasonably be
expected to, under current or reasonably
foreseeable conditions, materially harm
the financial condition of an institution.
The FDIC believes that it is plausible
that the proposed rule, if adopted, could
pose indirect benefits to FDIC-
supervised IDIs that exceed $139,850
and $124,175 a year for a substantial
number of small, FDIC-supervised IDIs
that, if
continued, could reasonably be
expected to, under current or reasonably
foreseeable conditions, materially harm
the financial condition of an institution.
The FDIC believes that it is plausible
that the proposed rule, if adopted, could
pose indirect benefits to FDIC-
supervised IDIs that exceed $139,850
and $124,175 a year for a substantial
number of small, FDIC-supervised IDIs.
The FDIC invites comments on all
aspects of the supporting information
provided in this RFA section, and in
particular, whether the proposed rule
would have any significant effects on
small entities that the FDIC has not
identified?
OCC Unfunded Mandates Reform Act
The OCC has analyzed the proposed
rule under the factors in the Unfunded
Mandates Reform Act of 1995
(UMRA).62 Under this analysis, the OCC
considered whether the proposed rule
includes a Federal mandate that may
result in the expenditure by State, local,
and tribal governments, in the aggregate,
or by the private sector, of $100 million
or more in any one year ($187 million
as adjusted annually for inflation).
Pursuant to section 202 of the UMRA,63
if a proposed rule meets this UMRA
threshold, the OCC would need to
prepare a written statement that
includes, among other things, a cost-
benefit analysis of the proposal. The
UMRA does not apply to regulations
that incorporate requirements
specifically set forth in law.
This proposed rulemaking imposes no
new mandates—and thus no direct
costs—on affected OCC-supervised
institutions. The OCC, therefore,
concludes that the proposed rule would
not result in an expenditure of $187
million or more annually by state, local,
and tribal governments, or by the
private sector. Accordingly, the OCC has
not prepared the written statement
described in section 202 of the UMRA.
Riegle Community Development and
Regulatory Improvement Act of 1994
Pursuant to section 302(a) of the
Riegle Community Development and
Regulatory Improvement Act of 1994, 12
U.S.C
expenditure of $187
million or more annually by state, local,
and tribal governments, or by the
private sector. Accordingly, the OCC has
not prepared the written statement
described in section 202 of the UMRA.
Riegle Community Development and
Regulatory Improvement Act of 1994
Pursuant to section 302(a) of the
Riegle Community Development and
Regulatory Improvement Act of 1994, 12
U.S.C. 4802(a), in determining the
effective date and administrative
compliance requirements for new
regulations that impose additional
reporting, disclosure, or other
requirements on insured depository
institutions, the agencies will consider,
consistent with principles of safety and
soundness and the public interest: (1)
any administrative burdens that the
proposed rule would place on
depository institutions, including small
depository institutions and customers of
depository institutions; and (2) the
benefits of the proposed rule. The
agencies request comment on any
administrative burdens that the
proposed rule would place on
depository institutions, including small
depository institutions, and their
customers, and the benefits of the
proposed rule that the agencies should
consider in determining the effective
date and administrative compliance
requirements for a final rule.
Providing Accountability Through
Transparency Act of 2023
The Providing Accountability
Through Transparency Act of 2023, 12
U.S.C. 553(b)(4), requires that a notice of
proposed rulemaking include the
internet address of a summary of not
more than 100 words in length of a
proposed rule, in plain language, that
shall be posted on the internet website
www.regulations.gov.
The Office of the Comptroller of the
Currency and the Federal Deposit
Insurance Corporation propose to define
the term ‘‘unsafe or unsound practice’’
for purposes of 12 U.S.C. 1818 and to
revise the supervisory framework for the
issuance of Matters Requiring Attention
and other supervisory communications
in plain language, that
shall be posted on the internet website
www.regulations.gov.
The Office of the Comptroller of the
Currency and the Federal Deposit
Insurance Corporation propose to define
the term ‘‘unsafe or unsound practice’’
for purposes of 12 U.S.C. 1818 and to
revise the supervisory framework for the
issuance of Matters Requiring Attention
and other supervisory communications.
The proposal and the required
summary can be found at https://
www.regulations.gov by searching for
Docket ID OCC–2025–0174 and https://
occ.gov/topics/laws-and-regulations/
occ-regulations/proposed-issuances/
index-proposed-issuances.html.
Executive Order 12866
Executive Order 12866, titled
‘‘Regulatory Planning and Review,’’ as
amended, requires the Office of
Information and Regulatory Affairs
(OIRA), Office of Management and
Budget to determine whether a
proposed rule is a ‘‘significant
regulatory action’’ prior to the
disclosure of the proposed rule to the
public. If OIRA finds the proposed rule
to be a ‘‘significant regulatory action,’’
Executive Order 12866 requires the
agencies to conduct a cost-benefit
analysis of the proposed rule. Executive
Order 12866 defines ‘‘significant
regulatory action’’ to mean a regulatory
action that is likely to (1) have an
annual effect on the economy of $100
million or more or adversely affect in a
material way the economy, a sector of
the economy, productivity, competition,
jobs, the environment, public health or
safety, or State, local, or tribal
governments or communities; (2) create
a serious inconsistency or otherwise
interfere with an action taken or
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a sector of
the economy, productivity, competition,
jobs, t

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## Nearby sections

- [FDIC FIL-1-2002 FOREIGN ASSETS CONTROL ACT](https://www.frixlaw.com/law-library/statutes/FDIC_FIL02001.md)
- [FDIC FIL-1-2010 Employee Compensation Advance Notice of Proposed Rulemaking](https://www.frixlaw.com/law-library/statutes/FDIC_FIL10001.md)
- [FDIC FIL-1-2015 DEPOSITORY INSTITUTION REPORTS](https://www.frixlaw.com/law-library/statutes/FDIC_FIL15001.md)
- [FDIC FIL-1-2018 DEPOSITORY INSTITUTION REPORTS](https://www.frixlaw.com/law-library/statutes/FDIC_FIL18001.md)
- [FDIC FIL-1-2024 Consolidated Reports of Condition and Income for Fourth Quarter 2023](https://www.frixlaw.com/law-library/statutes/FDIC_FIL24001.md)
- [FDIC FIL-2-2019 DEPOSITORY INSTITUTION REPORTS](https://www.frixlaw.com/law-library/statutes/FDIC_FIL19002.md)
- [FDIC FIL-2-2020 Consolidated Reports of Condition and Income for Fourth Quarter 2019](https://www.frixlaw.com/law-library/statutes/FDIC_FIL20002.md)
- [FDIC FIL-3-2017 Community Banking Conference 2016 Highlights](https://www.frixlaw.com/law-library/statutes/FDIC_FIL17003.md)
- [FDIC FIL-4-2015 The FDIC Launches Web Page to Support Marketing of Failing Financial Institutions](https://www.frixlaw.com/law-library/statutes/FDIC_FIL15004.md)
- [FDIC FIL-4-2018 Revisions to the Consolidated Reports of Condition and Income (Call Report) for March and June 2018](https://www.frixlaw.com/law-library/statutes/FDIC_FIL18004.md)
- [FDIC FIL-4-2019 Banker Webinar: Update on the Standardized Export of Imaged Loan Documents Initiative](https://www.frixlaw.com/law-library/statutes/FDIC_FIL19004.md)
- [FDIC FIL-4-2021 Revised Guidelines for Appeals of Material Supervisory Determinations](https://www.frixlaw.com/law-library/statutes/FDIC_FIL21004.md)
- [FDIC FIL-4-2023 Guidance to Help Financial Institutions and Facilitate Recovery in Areas of California Affected by Severe Winter Storms, Flooding, Landslides and Mudslides](https://www.frixlaw.com/law-library/statutes/FDIC_FIL23004.md)
- [FDIC FIL-4-2025 FDIC Statement of Policy on Bank Merger Transactions](https://www.frixlaw.com/law-library/statutes/FDIC_FIL25004.md)

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Source: Frix Law Library, https://www.frixlaw.com/law-library/statutes/FDIC_FIL25045. Check the current official text before relying on it. Not legal advice.