OCC and FDIC Issue New Bank Supervision Standards

On September 1, 2026, the OCC and FDIC published a joint final rule that defines “unsafe or unsound practice” by regulation for purposes of Section 8 of the Federal Deposit Insurance Act and sets a uniform standard for when examiners may issue a matter requiring attention (MRA).

The final rule is substantially similar to the joint proposed rule published in October 2025 (see prior coverage here).  However, the final rule makes clear that it does not apply to institution-affiliated parties and instead only to institutions that are a national bank, Federal savings association, Federal branch or agency of a foreign bank, insured State nonmember bank, insured State licensed branch of a foreign bank, or an insured State savings association.

An “unsafe or unsound practice” is now defined as a practice, act, or failure to act that is contrary to generally accepted standards of prudent operation and that, if continued, is likely to materially harm the institution’s financial condition or present a material risk of loss to the Deposit Insurance Fund; or has already caused that harm. Under the final rule, harm to financial condition means losses or other negative impacts on capital, asset quality, earnings, liquidity, or sensitivity to market risk.

Further, the final rule sets a lower bar for issuing an MRA than for a finding of an “unsafe or unsound practice.”  An MRA may be issued where a practice, act, or failure to act that is contrary to generally accepted standards of prudent operation and that, if continued, could reasonably be expected under current or reasonably foreseeable conditions to cause the same type of harm described above; or if there is an actual violation of a banking or banking-related law or regulation. Concerns that do not meet the standard above may be communicated as supervisory observations, and actual violations the agencies opt to not pursue through an MRA may be addressed as “other violations” requiring remediation.

The final rule takes effect November 2, 2026.