On December 23, 2025, the Office of the Comptroller of the Currency (OCC) issued a notice of proposed rulemaking significantly raising the applicability threshold of its Heightened Standards Guidelines from $50 billion to $700 billion in average total consolidated assets. The proposal reflects the agency’s view that the current framework is overly prescriptive for smaller institutions and that, as written, it is only appropriate for the largest and most complex banking organizations.
Under the proposal, institutions below the new threshold, referred to as Excluded Institutions, would no longer be subject to the Guidelines’ detailed governance and risk‑management requirements. Instead, these firms are provided the flexibility to design risk‑governance frameworks aligned with their size, complexity, and business models. The OCC emphasized its continued expectation that all banks continue to maintain the appropriate governance processes necessary to operate in a safe and sound manner. As stated in the proposal:
“For Excluded Institutions, the OCC will no longer focus on assessing a firm’s internal policies, processes, or governance practices relative to prescriptive standards. Rather, the OCC expects Excluded Institutions to establish and maintain internal policies, processes, or governance practices that are best suited to their firm and consistent with safety and soundness. While the OCC may continue to provide guidance to Excluded Institutions on best practices during the normal course of supervision, this proposal makes clear that the Guidelines and associated supervisory efforts may only be justified for the largest and most complex institutions that pose the greatest risk to financial stability and the banking system.”
The OCC believes the change will reduce regulatory burden, promote innovation in risk management, and allow supervisory resources to be more effectively focused on institutions that pose the greatest systemic risk.
Public comments will be accepted for 60 days following publication in the Federal Register.
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.