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Comment Period: Unsafe or Unsound Practices, Matters Requiring Attention

AGENCY:

Office of the Comptroller of the Currency, Treasury, and the Federal Deposit Insurance Corporation.

ACTION:

Notice of proposed rulemaking.

SUMMARY:

The proposed standard focuses on material harm to financial condition, and the agencies generally interpret harm to refer to financial losses. To qualify as an unsafe or unsound practice under the proposed definition, it would have to be likely—as opposed to, for example, merely possible—that the practice, act, or failure to act, if continued, would materially harm the financial condition of the institution or present a material risk of loss to the DIF. The agencies believe that including the term “if continued” is important to allow for identification of an unsafe or unsound act or failure to act before it impacts an institution’s financial condition. However, the conduct must be sufficiently proximate to a material harm to an institution’s financial condition to meet the proposed definition. An unsafe or unsound practice would also include a practice, act, or failure to act that, if continued, is likely to negatively affect an institution’s ability to avoid FDIC receivership and presents a material risk of loss to the DIF as a result of the failure. Specifically, the proposed rule provides that the agencies may only issue an MRA for a practice, act, or failure to act, alone or together with one or more other practices, acts, or failures to act, that (1) (i) is contrary to generally accepted standards of prudent operation; and (ii) (A) if continued, could reasonably be expected to, under current or reasonably foreseeable conditions; (I) materially harm the financial condition of the institution; or (II) present a material risk of loss to the DIF; or (B) has already caused material harm to the financial condition of the institution; or (2) is an actual violation of a banking or banking-related law or regulation. The proposal also clarifies that the agencies may communicate other nonbinding suggestions to institutions orally or in writing to enhance an institution’s policies, practices, condition, or operations as long as the communication is not, and is not treated by the agency in a manner similar to, an MRA (e.g., through tracking). The proposal requires tailoring of agency supervisory and enforcement actions, as well as MRA issuances, based on the capital structure, riskiness, complexity, activities, asset size, and any financial risk-related factor that the agencies deem appropriate. 

DATES:

Comments must be received on or before December 29, 2025.

https://www.federalregister.gov/documents/2025/10/30/2025-19711/unsafe-or-unsound-practices-matters-requiring-attention

  • December 29, 2025
  • Time: All Day
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