U.S. banking agencies finalize rule to focus supervision on material financial risks

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U.S. banking supervision rule

Highlights

U.S. banking agencies finalized a rule standardizing supervision on material financial risks and compliance with banking laws, effective October 2025.
The rule establishes a common definition of 'unsafe or unsound practice' for enforcement under 12 U.S.C. § 1818 to provide clarity on supervisory standards.
Uniform procedures for issuing Matters Requiring Attention and communicating violations now apply only to institutions supervised by the FDIC and OCC.

Rule sets common supervision standards

As reported by the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency and the FDIC today issue a final rule that advances their effort to direct examiners and banks toward material financial risks and compliance with banking and banking-related laws and regulations.

The rule is consistent with the agencies' October 2025 proposal, with modifications intended to clarify how they exercise enforcement and supervisory authority. It establishes a uniform definition of "unsafe or unsound practice" for use in enforcement actions under 12 U.S.C. § 1818 and in supervisory activities.

The agencies say the definition is meant to provide greater clarity and certainty around enforcement and supervision standards. It also is designed to ensure examiners give priority to concerns tied to material financial risks, rather than to policies, processes, documentation and other nonfinancial risks.

Implications for banks and examinations

The final rule also creates uniform standards for when and how the agencies may issue Matters Requiring Attention, or MRAs, during the examination process. In addition, it sets out how supervisory observations and other violations of laws and regulations are to be communicated.

Regulators say the rule clarifies how the unsafe or unsound practices definition and the MRA standard are tailored according to risk factors specific to each institution. The measure explicitly limits its scope to institutions supervised by the two agencies, narrowing its application to their own supervisory perimeter.

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