On October 6, the OCC announced five actions intended to reduce the regulatory burden on community banks. The actions included two bulletins revising examination procedures for community banks by (i) replacing fixed examination requirements with risk-based supervisory activity, and (ii) indicating the OCC will rely solely on the core assessment standards found in the “Community Bank Supervision” booklet of the comptroller’s handbook to examine for retail nondeposit investment products. The OCC also issued a bulletin on model risk management (MRM) expectations for community banks, highlighting that the OCC’s guidance on MRM does not impose prescriptive requirements such as annual model validation. In addition, the OCC requested comments on two proposed rules: one to rescind data collection requirements under the Fair Housing Home Loan Data System regulation, and another to amend current community bank licensing procedures for community banks.

Examinations for community banks

Effective January 1, 2026, the OCC announced it would eliminate some examination activities not required by statute or regulation for community banks to reduce supervisory burden. Specifically, instead of using fixed examination requirements, bank examiners will tailor the scope and frequency of examinations to each bank’s size, complexity and risk profile. The announcement included an appendix of OCC examinations and activities under the agency’s current policy, including the minimum examination frequency.

Model risk management

The OCC issued a bulletin clarifying that model risk management does not require a one-size-fits-all approach. The OCC instead highlighted how model risk management guidance should be customized by a community bank’s management to reflect its “risk exposures, its business activities, and the complexity and extent of its model use.” The OCC noted community banks may use models for a range of purposes, including underwriting credit, valuing exposures and positions, measuring risk, managing client assets, and determining capital and reserve adequacy. Notably, the OCC stated it will “not provide negative supervisory feedback to a bank solely for the frequency or scope of the model validation that the bank reasonably determined to perform” based on its specific model use cases and risk levels.

Changes to exam procedures for retail nondeposit investment products

The OCC announced it would no longer examine community banks using the procedures and standards found in the “Retail Nondeposit Investment Products” booklet of the Comptroller’s Handbook. The OCC will now examine community banks’ direct or indirect offering of retail nondeposit investment products solely under the standards found in the “Community Bank Supervision” booklet of the comptroller’s handbook. Retail nondeposit investment products encompass mutual funds, exchange traded funds, variable- and fixed-rate annuities, equities and fixed-income securities.

Rescinding asymmetrical data requirements

The OCC issued a notice of proposed rulemaking to rescind 12 CFR part 27, “Fair Housing Home Loan Data System.” The OCC found that part 27 overlaps with requirements under HMDA and its implementing regulation, Regulation C, as well as Regulation B, which implements the ECOA (with noted inconsistencies between part 27 and Regulations B and C, particularly in on ethnicity and race data).

The OCC took the position that rescinding part 27 would not materially impact the availability of data necessary for its fair housing-related supervisory activities. Comments must be received on or before 30 days after publication in the Federal Register.

Amendments to community bank licensing regulations

The OCC released proposed amendments to licensing regulations that would simplify requirements for corporate activities and transactions involving national banks and federal savings associations with less than $30 billion in total assets. The proposal introduced a new definition for “covered community bank or covered community savings association,” granting these institutions access to expedited or reduced filing procedures currently available under 12 CFR part 5, which outlines requirements for OCC-supervised institutions.

The OCC’s rule changes would affect several sections of part 5, including:

• 12 CFR 5.13, which expand eligibility for expedited procedures;
• 12 CFR 5.3, which adds the definition of covered community bank or savings association;
• 12 CFR 5.33, allowing streamlined applications for qualifying business combinations;
• 12 CFR 5.46, addressing changes in permanent capital;
• 12 CFR 5.47, relating to subordinated debt; and
• 12 CFR 5.55, concerning capital distributions by federal savings associations.

Comments must be received on or before 60 days after date of publication in the Federal Register.