The OCC and the FDIC on August 27, 2026 issued a final rule that defines “unsafe or unsound practice” for enforcement actions under 12 U.S.C. 1818 and sets uniform standards for Matters Requiring Attention (MRAs). The unsafe or unsound practice final rule was published at 91 FR 56004 on September 1 and takes effect November 2, 2026. The Federal Reserve is not a party, so it does not apply to Fed-supervised banks.
What the rule says
As restated in the OCC’s revised enforcement manual, a practice is unsafe or unsound if it is contrary to generally accepted standards of prudent operation and, if continued, is likely to materially harm the bank’s financial condition or present a material risk of loss to the Deposit Insurance Fund, or has already done so. The rule also says that failing to fix an MRA is not by itself an unsafe or unsound practice.
The agencies say the definition will “ensure that examiners prioritize concerns related to material financial risks over those regarding policies, process, documentation, and other nonfinancial risks.” The rule “explicitly limits its scope to institutions the agencies supervise.”
The same day the OCC revised its enforcement manual, PPM 5310-3. It says the OCC “generally seeks a C&D order” when it escalates to formal action, and that an action can be terminated when “the deficiency has substantively been cured, even if the bank has not satisfied all technical requirements of the action.”
Why it matters for sponsor banks and their partners
Most actions in our sponsor bank enforcement actions tracker are consent orders or other cease-and-desist orders under section 1818(b), which covers unsafe or unsound practices as well as violations of law. Many cite weaknesses in third-party oversight, anti-money-laundering programs and recordkeeping. From November 2, the OCC and FDIC will tie the “unsafe or unsound” label to material financial harm; violations of law remain grounds for an order. Existing orders stay in force until the agency terminates them. For how orders are structured and how they end, see how to read a consent order.
