OCC Eases Regulatory Burden for Community Banks

On November 24, 2025, the Office of the Comptroller of Currency (OCC) announced supervisory and regulatory actions designed to reduce regulatory burden on community banks, which are defined as OCC-supervised institutions with up to $30 billion in assets. In a series of bulletins, the agency clarified its approach to Bank Secrecy Act (BSA)/anti-money laundering (AML) examination procedures and plans to discontinue Money Laundering Risk (MLR) system data collection requirements for community banks. The move aims to ease certain BSA/AML examination procedures for all community banks and follows a broader supervisory trend toward tailoring their oversight to material financial risks based on the institutions’ risk profiles.

In addition, the OCC issued a Request for Information (RFI) to gather insights on the challenges community banks face regarding core service providers and other third-party providers.

Below, we provide an overview of each bulletin.

Bulletin name	Bulletin summary
Bulletin 2025-37: BSA/AML: Community Bank Minimum BSA/AML Examination Procedures	Since June 30, 2005, the Federal Financial Institutions Examination Council (FFIEC) has issued and updated the Bank Secrecy Act/Anti-Money Laundering Examination Manual. While the manual served as a guide to examiners and applied universally to all banks, the OCC is issuing supplementary guidance for applying the manual to OCC-supervised community banks. The new guidance, referred to as the Community Bank Procedures, will reduce the burden on community banks further from a BSA/ AML perspective. Effective February 1, 2026, the OCC will update its requirements for BSA/AML examination activities set by OCC policy for community banks. Thematically, examiner discretion is emphasized in developing risk-based approaches to examination activities. Examiners are encouraged to use discretion to place reliance, as appropriate, on satisfactory independent testing to form a basis for conclusions for specific examination procedures. Examiners may use discretion in carrying forward prior cycle examination conclusions for one examination cycle, for the Training and BSA Compliance Officer pillars, where there have not been significant changes to the bank’s risk profile and in consideration of other relevant factors. Examiner discretion is permitted in determining whether and to what extent to perform transaction testing or whether it is appropriate to limit testing to analytical or other reviews.
Bulletin 2025-38: BSA/AML: Discontinuation of AML Risk System Data Collection	Since 2005, the OCC has conducted an annual data collection, known as the MLR System, exclusively from community banks to assist OCC examiners in supervising BSA and sanctions compliance. Effective immediately, the OCC is discontinuing the annual mandatory data collection from community banks under this MLR System.
Bulletin 2025-39: Bank Activities: Request for Information on Community Banks’ Engagement with Core Service Providers and Other Essential Third-Party Service Providers	The RFI solicits comments on the key challenges and barriers faced by community banks in engaging with their core service providers and other essential third-party service providers. The RFI includes questions on the challenges community banks face related to contract negotiations and terms, fees, billing practices, oversight, due diligence, innovation, core conversions, data access and modernization, and interoperability issues. It also includes questions on potential actions the OCC could take to address these challenges, including with respect to burden reduction related to supervisory practices, policies, and guidance (e.g., guidance on third-party risk management), as well as other potential agency initiatives. Comments must be received within 60 days of publication in the Federal Register.

How Forvis Mazars Can Help

The OCC’s actions reflect a change in their supervisory approach. Community banks can use this momentum to strengthen operational effectiveness and enhance program outcomes, while continuing to prioritize proactive risk management across their BSA/AML frameworks.

Leaders face more challenges than ever, from striving to meet shareholder and regulatory expectations to pursuing digital innovation. Forvis Mazars can help your financial institution tackle issues inherent to the industry, including market growth, internal control threats, industry consolidation, and compliance. We have the skills and experience in financial services that you can trust, combining a focus on Unmatched Client Experience^® with the resources of a global firm. Serving you is our passion and privilege.

If you have any questions or need assistance, please reach out to a professional at Forvis Mazars and let us be a resource for your institution.

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