The Office of the Comptroller of the Currency (OCC) has released two updated Policies and Procedures Manuals (PPMs) governing bank enforcement actions and matters requiring attention, aligning its supervisory and enforcement frameworks with a new joint final rule. These revisions aim to prioritize material financial risks and provide banks with opportunities to remediate deficiencies before escalating to formal enforcement actions.
The revised PPM 5310-3, which addresses bank enforcement actions, replaces the version issued on May 25, 2023. Concurrently, the revised PPM 5400-11, focusing on matters requiring attention (MRAs), supersedes its February 27, 2026, predecessor, though this manual was not previously published publicly. These updates follow a joint final rule issued by the OCC and the Federal Deposit Insurance Corporation on August 27, 2026, which defines "unsafe or unsound practice" and revises the supervisory framework for MRAs and other communications.
A key change emphasizes that the OCC will generally not take enforcement action under section 8 of the Federal Deposit Insurance Act without first allowing a bank to correct issues through the supervisory process. The Revised Enforcement Action PPM is guided by three principles: escalation, tailoring, and focus. Escalation means responses are generally gradual, offering remediation opportunities. Tailoring ensures actions are specific to a bank's financial risk factors, with increased expectations for larger or more complex institutions. Focus means corrective actions are targeted to specific deficiencies. The OCC will now terminate enforcement actions when a bank achieves "substantial compliance," even if minor requirements remain.
For MRAs, the revised PPM 5400-11 establishes a uniform standard, allowing MRAs only for practices that are contrary to prudent operation and could materially harm the bank's financial condition, pose a material risk to the Deposit Insurance Fund, have already caused material harm, or constitute an actual violation of law. Examiners must tailor MRAs based on financial risk factors. The manual also clarifies the use of "supervisory observations" for less severe weaknesses, which do not require board presentation or action plans. These policies apply to all OCC-supervised national banks, federal savings associations, and federal branches and agencies.