The OCC and FDIC jointly published on August 27 a final rule giving a precise definition to the phrase « unsafe or unsound banking practices. » This new standard narrows regulatory enforcement to material financial risks and requires banks to address identified issues before any formal action is taken. The rule creates a uniform, risk-based framework tied to Section 8 of the Federal Deposit Insurance Act and overhauls the process for issuing Matters Requiring Attention. It takes effect 60 days after publication in the Federal Register and applies only to OCC- and FDIC-supervised institutions. The Federal Reserve is not a party to this rulemaking, which could create a stricter and more subjective regime for the banks it supervises.
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