- within Transport topic(s)
On October 27, 2025, the Office of the Comptroller of the Currency (OCC) announced that it is seeking public comment on its proposal to eliminate certain recovery planning guidelines applicable to insured national banks, federal savings associations, and federal branches of foreign banks with at least $100 billion in assets. The proposal would rescind certain requirements which were finalized in October 2024, and went into effect January 1, 2025. According to the OCC, this development offers relief to approximately 21 affected institutions, and is a step in the OCC's broader initiative to reduce regulatory burdens.
Background
In 2016, the OCC issued Guidelines Establishing Standards for Recovery Planning by Certain Large Insured National Banks, Insured Federal Savings Associations, and Insured Federal Branches (the Guidelines), pursuant to section 39 of the Federal Deposit Insurance Act, 12 U.S.C. 1831p-1. The Guidelines, still in effect today, require covered institutions to create and maintain recovery plans for responding to events of financial stress. The plans must contain indicators reflecting the institution's vulnerabilities, a range of response options to restore financial strength, and assessments of how those options would impact the institution.
Initially applicable to institutions with $50 billion or more in total consolidated assets, the threshold was raised to $250 billion in 2018, then lowered to its current $100 billion in October 2024, at which time new testing standards were added, incorporating non-financial risks into the planning. Part of the OCC's justification for the stronger regulation at that time was its observation that in 2023 several insured depository institutions, with assets over $100 billion, had "experienced significant withdrawals of uninsured deposits in response to underlying weaknesses in their financial position and failed."
However, following the change in administration, in July the Acting Comptroller noted the OCC's commitment to eliminate outdated or duplicative rules (as Goodwin previously reported in a prior post), and in a September press release the agency stated that it was "reviewing the entire post-2008 chartering, regulatory, and supervisory framework" with an eye toward "resetting the risk tolerance for the federal banking system." Last week's proposed recission followed.
OCC's Justification
According to the Notice of Proposed Rulemaking published last week, the OCC's Guidelines currently require response plans that are by nature conjectural and, therefore, likely to be inapplicable in the face of real-world stress. Risk management, the OCC said, should be a dynamic process, reactive to the specific circumstances of a given stress event or period of stress, and not based on adherence to a recovery plan. In its notice, the OCC states that covered banks are already "well attuned to indicia of stress," and do not need the recovery planning triggers and escalation procedures expected by the Guidelines. The notice further states that recovery planning by covered banks is not statutorily mandated.
Implications for Financial Institutions
The OCC concludes that current requirements affect 21 institutions, estimating a compliance burden of 672,360 hours across all covered banks, and that eliminating the requirements would save approximately $20 million in costs.
At the same time, the OCC notes, institutions should recognize that the OCC's fundamental safety and soundness standards continue to mandate that all insured depository institutions maintain effective risk management processes appropriate to their size, complexity, and risk profile, including during stress periods.
Next Steps
A 30-day comment period began with the October 27, 2025 Federal Register publication. Financial institutions and their legal advisors should evaluate whether to participate in the comment process and begin assessing how the proposed changes would affect their compliance frameworks and risk management infrastructure.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
