The OCC has issued revised enforcement and supervision manuals and proposed changes to its violations framework, in connection with a joint rule with the FDIC.
According to the official press release, the changes were unveiled alongside a final rule on unsafe or unsound practices and MRAs, issued jointly with the Federal Deposit Insurance Corporation (FDIC).
As part of the update, the OCC has substantially revised two internal policies and procedures manuals (PPMs). The first, PPM 5310-3, covering bank enforcement actions and related matters, now places greater emphasis on material financial risks. It sets out three guiding principles for enforcement decisions: escalation, tailoring, and limiting corrective actions to those necessary to address specific deficiencies.
Under the revised approach, the OCC may pursue an enforcement action against a large or complex bank for practices that would not necessarily trigger the same response at a community bank, reflecting differentiated supervisory expectations based on institution size and complexity.
The second manual, PPM 5400-11, covering Matters Requiring Attention, has been made publicly available for the first time. According to the OCC, this is intended to improve transparency around its supervisory standards. The revised manual clarifies that MRAs will only be issued for practices, acts, or omissions that meet defined criteria, and requires that MRAs be tailored according to financial risk-related factors.
Proposed changes to the violations framework
Alongside the revised manuals, the OCC has published a notice of proposed rulemaking for public comment, aimed at codifying its supervisory framework for issuing MRAs in response to violations of laws or regulations. The proposal would introduce two categories of violations: substantive and technical. The distinction is designed to direct supervisory attention toward violations with the greatest impact on an institution or its customers, while providing a separate mechanism to address non-substantive violations outside the MRA process. Comments on the proposed rule are due 30 days after its publication in the Federal Register.
Wider regulatory context
The announcement forms part of a broader set of actions the OCC states it has taken to adjust regulatory burden and align supervisory activity with a risk-based approach. Previous measures cited by the agency include the removal of reputation risk from examinations, a shift toward risk-based supervision, targeted relief for community institutions, the elimination of duplicative data collection requirements, and updates to model risk management guidance to make it more proportionate to a bank's size and complexity. The OCC has also sought feedback on proposals to modernise the regulatory capital framework for banks of varying sizes.
Comptroller of the Currency Jonathan V. Gould, said the steps are intended to help ensure examiners and institutions prioritise material financial risks and substantive legal violations over concerns tied to policy, process, or documentation, and that supervisory and enforcement standards support that prioritisation on an ongoing basis.
For banks, the revised manuals and proposed rule may translate into more predictable enforcement outcomes and a narrower scope for MRAs, particularly for institutions whose past findings related largely to procedural rather than financial matters. The distinction between substantive and technical violations, if finalised, would also give banks a clearer basis for anticipating how specific findings are likely to be handled during examinations.
