The Office of the Comptroller of the Currency revised its bank supervision and enforcement framework on Aug. 27, directing examiners to focus on material financial risks and substantive violations rather than minor procedural deficiencies.
Summary
- OCC revised two supervisory manuals to prioritize material financial risks and substantive legal violations consistently.
- The agency publicly released its Matters Requiring Attention manual for the first time Thursday afternoon.
- Proposed rules divide legal violations into substantive and technical categories based on potential customer harm.
- Technical violations could require correction without enforcement actions, MRAs, or regulator-prescribed remediation methods for banks.
- Comments are due thirty days after the proposal’s official publication in the Federal Register notice.
The OCC released two updated policy manuals alongside a joint final rule with the Federal Deposit Insurance Corporation. It also proposed a separate rule dividing violations of banking laws into “substantive” and “technical” categories.
The manuals establish current OCC policy, while the legal-violation framework remains a proposal. Its provisions will not become binding unless the OCC completes the federal rulemaking process.
OCC supervision will focus on material financial risks
The revised enforcement manual establishes three principles: escalation, tailoring and limiting corrective actions to measures needed to resolve a specific deficiency.
The OCC said enforcement responses should be proportionate and predictable. Examiners must consider the financial risk, legal violation and institution’s size and complexity when deciding whether formal action is warranted.
This framework does not require identical treatment for every bank. A practice at a large or complex institution may trigger an enforcement action even when similar conduct at a community bank would not.
The OCC said larger institutions face greater supervisory expectations because their operations and failures could present broader financial risks. That approach still requires examiners to connect the response to a specific deficiency.
Comptroller Jonathan Gould described the changes as a return to “risk-based supervision.” His claim that this approach will improve consistency is a policy objective whose results will depend on examiner implementation.
Matters Requiring Attention receive narrower standards
A Matter Requiring Attention, or MRA, is a supervisory directive requiring a bank’s board and management to correct a deficient practice. MRAs are generally not public enforcement orders.
The OCC publicly released its dedicated MRA manual for the first time. The document requires examiners to tailor MRAs using factors related to financial risk and limits their issuance to conduct meeting the new standard.
The joint OCC-FDIC final rule defines an unsafe or unsound practice around conduct that creates material financial risk. It also revises when supervisors may issue MRAs involving safety, soundness and legal compliance.
The rule is meant to reduce MRAs based primarily on policies, paperwork or internal processes when those shortcomings do not create material financial risk. It does not prevent action when weak controls produce meaningful harm or legal violations.
Proposed OCC rule creates two violation categories
Under the proposal, the OCC could issue an MRA for a legal or regulatory breach only when it qualifies as substantive.
A violation would be substantive when its nature, duration, frequency or severity could meaningfully affect the bank or its customers. At least one of five criteria must apply.
Those criteria cover systemic patterns, more-than-minimal financial effects, inaccurate books and records, customer harm or restitution, and insider misconduct or self-dealing.
A technical violation would not support an enforcement action or MRA. Examiners could require the bank to correct it, but could not dictate the method or demand unrelated remediation.
This does not mean technical violations may be ignored. Banks would still need to comply with applicable law and correct identified problems.
Comments are due 30 days after the notice appears in the Federal Register. Because publication had not established a calendar date when the OCC announced the proposal, the agency provided no fixed deadline.
Crypto banks fall under the same supervisory framework
The changes apply to all OCC-supervised national banks, federal savings associations and federal branches. That includes federally supervised trust banks conducting digital-asset custody, stablecoin reserve management or blockchain settlement.
As crypto.news previously reported, the OCC has returned permitted digital-asset banking activities to its standard supervisory channels after withdrawing several special restrictions and reputation-risk references.
The revised framework does not grant banks new crypto powers. It also does not remove requirements involving capital, liquidity, cybersecurity, sanctions, anti-money-laundering controls or consumer protection.
Its relevance lies in how examiners classify deficiencies at crypto-focused institutions. A minor documentation error could receive technical treatment, while custody failures, inaccurate records, customer losses or systemic compliance problems could remain substantive.
In related coverage, Circle received final approval to establish a federally supervised digital-asset trust bank. Other crypto companies are progressing through conditional charter applications.
Banks, industry groups and consumer advocates can now comment on whether the proposed distinction provides useful consistency or restricts supervisory intervention too sharply.
