OCC announces regulatory relief for community banks

The OCC announced several ICBA-supported efforts to reduce regulatory burden for community banks.

Details: The OCC’s announcement includes several key reforms:

• Bulletin 2025-24, “Examinations: Frequency and Scope”: Elimination of fixed examination requirements in favor of a risk-based approach, ensuring that supervisory expectations align with actual institutional risk.

• Bulletin 2025-25, “Retail Nondeposit Investment Products”: Using the core assessment standards in the Community Bank Supervision booklet of the Comptroller’s Handbook to streamline the examination process for these products.

• Bulletin 2025-26, “Model Risk Management: Clarification for Community Banks”: Clarification that model validation requirements do not require community banks to perform annual model validations.

• Bulletin 2025-28, “Community Bank Licensing Amendments”: A proposed rule to automatically deem community banks with less than $30 billion in total assets as “covered institutions” in relation to licensing requirements, expediting licensing processes such as branch applications.

• Bulletin 2025-27, “Rescission of 12 CFR 27”: A proposed rule to eliminate legacy fair housing data-collection systems.

Outlook: The OCC also said it will continue to prioritize reforms targeted to community banks ahead of broader reforms for the industry. Ongoing work includes adjusting the community bank leverage ratio framework and a simplified strategic plan process for community banks to comply with the Community Reinvestment Act, the agency said.

ICBA View: In a national news release, ICBA President and CEO Rebeca Romero Rainey commended the OCC for taking meaningful steps to reduce unnecessary regulatory burdens on community banks. “Today’s actions are a great first step and reflect a thoughtful and proportionate approach to regulation and supervision that recognizes the unique role community banks serve in supporting local economies,” she said.

Key Priorities: The OCC announcement aligns with ICBA’s “Repair, Reform, and Thrive” plan and open letter to the 119th Congress.

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