FDIC Banking & Insurance Brief

Headline

OCC and FDIC adopt final rule defining unsafe or unsound practice and revising MRA supervisory framework

Executive Summary

The OCC and FDIC published a final rule on September 1, 2026, effective November 2, 2026, defining 'unsafe or unsound practice' for purposes of section 8 of the Federal Deposit Insurance Act. The rule also revises the framework governing the issuance of Matters Requiring Attention and other supervisory communications.

Bottom Line

The OCC and FDIC adopt a final rule, effective November 2, 2026, that establishes a regulatory definition of 'unsafe or unsound practice' for section 8 enforcement purposes and revises the supervisory framework for MRA issuance. The rule's scope is explicitly limited to institutions supervised by the OCC and FDIC. Cresthaven reading: OCC- and FDIC-supervised institutions face a codified definition of unsafe or unsound practice where none previously existed in regulation, placing the definition's two-part test at the center of section 8 actions premised on unsafe or unsound practices.

Key Regulatory Signals

• MRA Framework Revised: The rule revises the supervisory framework for the issuance of Matters Requiring Attention and other supervisory communications. The agencies state the rule will clarify how they will tailor their use of MRAs based on risk factors specific to each institution.
• Examiner Prioritization Stated as Agency Policy: The agencies state in the rule's preamble that it is critical that examiners and institutions prioritize material financial risks over concerns related to policies, process, documentation, and other nonfinancial risks, and that the agencies' enforcement and supervision standards further that prioritization. This framing appears in the preamble as the agencies' stated policy view, not as a standalone operative provision of the rule text.
• Scope Explicitly Limited to Supervised Institutions: The final rule explicitly limits its scope to institutions the OCC and FDIC supervise, which the preamble defines to include national banks, insured state nonmember banks, federal and state savings associations, federal branches and agencies of a foreign bank, insured state licensed branches of a foreign bank, and industrial loan corporations subject to supervision or enforcement by the agencies.

Regulatory Delta

• The proposed rule was published October 30, 2025. The final rule adopts the proposal's objectives with certain modifications, including an explicit scope limitation to supervised institutions.
• The rule establishes the first codified regulatory definition of 'unsafe or unsound practice' for section 8 enforcement purposes, filling a gap the agencies acknowledge the statute leaves open.
• The Federal Reserve, which supervises state member banks and bank holding companies, is not a party to this rule. Institutions under Federal Reserve supervision remain outside the rule's stated scope.

Materiality Classification

HIGH — Final rule with an effective date of November 2, 2026, establishing a codified regulatory definition of 'unsafe or unsound practice' and revising the MRA supervisory framework across the full population of OCC- and FDIC-supervised institutions.

Time Horizon

effective — 2026-11-02

Intelligence Outlook

Monitor the OCC and FDIC for implementing guidance, examination procedure updates, and any supervisory communications clarifying how examiners will apply the codified definition and revised MRA standards following the November 2, 2026 effective date.