OCC Announces Actions to Reduce Regulatory Burden for Community Banks

WASHINGTON—The Office of the Comptroller of the Currency (OCC) today announced guidance to banks and proposed rulemakings to reduce regulatory burden for community banks.

These actions build upon the OCC’s continued efforts to tailor its regulatory and supervisory frameworks to minimize burden for its regulated institutions and promote economic growth.

“Community banks have an outsized impact on lending and are vital to the strength of the U.S. economy. Today’s actions relieve these banks of regulatory burden and unproductive reporting requirements, so they are better positioned to support their communities and drive economic growth,” said Comptroller of the Currency Jonathan V. Gould. “The OCC will continue to tailor our risk-based supervision to focus on material financial risk.”

In two bulletins, the OCC clarified examination procedures for community banks. The OCC announced it is removing fixed examination requirements for community banks and instead tailoring the examination scope and frequency to be consistent with risk-based supervision. This approach reduces supervisory burden, maintains the value of the federal charter and preserves banks’ safety and soundness while ensuring regulatory oversight does not distract banks from serving their communities. The OCC also announced that it will only use the core assessment standards in the Community Bank Supervision booklet of the Comptroller’s Handbook to examine for retail nondeposit investment products.

In a separate bulletin, the OCC clarified its expectations that community banks should tailor model risk management practices commensurate with the bank’s risk exposures, its business activities, and the complexity and extent of its model use. In particular, the bulletin highlights that the OCC’s model risk management guidance does not impose prescriptive requirements, such as annual model validations. The OCC is also considering additional steps to enhance flexibility and reduce burden related to model risk management. This bulletin is just the first step in refining model risk management guidance for all of the OCC’s regulated institutions.

The OCC also requested comments on two proposed rules. The OCC proposed rescinding its Fair Housing Home Loan Data System regulation, removing largely duplicative data collection requirements for national banks. The proposal would eliminate regulatory burden for banks without having a material impact on the availability of data necessary for the OCC to conduct its fair housing-related supervisory activities. The OCC also proposed broadening eligibility for expedited or reduced licensing procedures to community banks. This proposal would reduce the burden for community banks and tailor requirements to the size and risk profile of an institution. These proposed changes are intended to facilitate an increase in corporate activities and transactions by community banks.

The OCC 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.

Related Links

• Bulletin 2025-24, “Examinations: Frequency and Scope”
• Bulletin 2025-25, “Retail Nondeposit Investment Products”
• Bulletin 2025-26, “Model Risk Management: Clarification for Community Banks”
• Bulletin 2025-27, “Rescission of 12 CFR 27, ‘Fair Housing Home Loan Data System’: Notice of Proposed Rulemaking”
  • Notice of Proposed Rulemaking, Fair Housing Home Loan Data System (PDF)
• Bulletin 2025-28, “Community Bank Licensing Amendments; Notice of Proposed Rulemaking”
  • Notice of Proposed Rulemaking, Community Bank Licensing Amendments (PDF)