Rescission of OCC Guidelines Establishing Standards for Recovery Planning by Certain Large Insured National Banks, Insured Federal Savings Associations, and Insured Federal Branches

DEPARTMENT OF THE TREASURY <SUBAGY>Office of the Comptroller of the Currency</SUBAGY> <CFR>12 CFR Part 30</CFR> <DEPDOC>[Docket ID OCC-2025-0339]</DEPDOC> <RIN>RIN 1557-AF40</RIN> <SUBJECT>Rescission of OCC Guidelines Establishing Standards for Recovery Planning by Certain Large Insured National Banks, Insured Federal Savings Associations, and Insured Federal Branches</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Office of the Comptroller of the Currency (OCC), Treasury. <HD SOURCE="HED">ACTION:</HD> Notice of proposed rulemaking. <SUM> <HD SOURCE="HED">SUMMARY:</HD> The OCC proposes amending 12 CFR part 30 by rescinding appendix E, OCC Guidelines Establishing Standards for Recovery Planning by Certain Large Insured National Banks, Insured Federal Savings, and Insured Federal Branches. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> Comments must be received on or before December 18, 2025. </EFFDATE> <HD SOURCE="HED">ADDRESSES:</HD> Commenters are encouraged to submit comments through the Federal eRulemaking Portal. Please use the title “Rescission of OCC Guidelines Establishing Standards for Recovery Planning by Certain Large Insured National Banks, Insured Federal Savings Associations, and Insured Federal Branches” to facilitate the organization and distribution of the comments. You may submit comments by any of the following methods: • <E T="03">Federal eRulemaking Portal—Regulations.gov:</E> Go to <E T="03">https://regulations.gov.</E> Enter Docket ID “OCC-2025-0339” in the Search Box and click “Search.” Public comments can be submitted via the “Comment” box below the displayed document information or by clicking on the document title and then clicking the “Comment” box on the top-left side of the screen. For help with submitting effective comments, please click on “Commenter's Checklist.” For assistance with the <E T="03">Regulations.gov</E> site, please call 1-866-498-2945 (toll free) Monday-Friday, 9 a.m.-5 p.m. EST or email <E T="03">regulationshelpdesk@gsa.gov.</E> • <E T="03">Mail:</E> Chief Counsel's Office, Attention: Comment Processing, Office of the Comptroller of the Currency, 400 7th Street SW, Suite 3E-218, Washington, DC 20219. • <E T="03">Hand Delivery/Courier:</E> 400 7th Street SW, Suite 3E-218, Washington, DC 20219. <E T="03">Instructions:</E> You must include “OCC” as the agency name and Docket ID “OCC-2025-0339” in your comment. In general, the OCC will enter all comments received into the docket and publish the comments on the <E T="03">Regulations.gov</E> website without change, including any business or personal information provided such as name and address information, email addresses, or phone numbers. Comments received, including attachments and other supporting materials, are part of the public record and subject to public disclosure. Do not include any information in your comment or supporting materials that you consider confidential or inappropriate for public disclosure. You may review comments and other related materials that pertain to this action by the following method: • <E T="03">Viewing Comments Electronically—Regulations.gov:</E> Go to <E T="03">https://regulations.gov.</E> Enter Docket ID “OCC-2025-0339” in the Search Box and click “Search.” Click on the “Documents” tab and then the document's title. After clicking the document's title, click the “Browse Comments” tab. Comments can be viewed and filtered by clicking on the “Sort By” drop-down on the right side of the screen or the “Refine Results” options on the left side of the screen. Supporting materials can be viewed by clicking on the “Documents” tab and filtered by clicking on the “Sort By” drop-down on the right side of the screen or the “Refine Documents Results” options on the left side of the screen.” For assistance with the <E T="03">Regulations.gov</E> site, please call 1-866-498-2945 (toll free) Monday-Friday, 9 a.m.-5 p.m. EST or email <E T="03">regulationshelpdesk@gsa.gov.</E> The docket may be viewed after the close of the comment period in the same manner as during the comment period. <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> Sean Young, Chief Counsel's Office, (202) 649-5490; Office of the Comptroller of the Currency, 400 7th Street SW, Washington, DC 20219. If you are deaf, hard of hearing, or have a speech disability, please dial 7-1-1 to access telecommunications relay services. </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> <HD SOURCE="HD1">I. Background</HD> On September 29, 2016, the OCC issued Guidelines Establishing Standards for Recovery Planning by Certain Large Insured National Banks, Insured Federal Savings Associations, and Insured Federal Branches (Guidelines). <SU>1</SU> <FTREF/> Under the Guidelines, an insured national bank, insured Federal savings association, or insured Federal branch subject to the standards (covered banks) should have a recovery plan that includes (1) quantitative or qualitative indicators of the risk or existence of severe stress that reflect its particular vulnerabilities; (2) a wide range of credible options that it could undertake in response to the stress to restore its financial strength and viability; and (3) an assessment and description of how these options would affect it. The Guidelines provide that a recovery plan should also address (1) the covered bank's overall organizational and legal entity structure and its interconnections and interdependencies; (2) procedures for escalating decision-making to senior management or the board of directors or an appropriate committee thereof (board); (3) management reports; (4) communication procedures; and (5) any other information the OCC communicates in writing. The Guidelines also set forth the responsibilities of management and the board with respect to the covered bank's recovery plan. <FTNT> <SU>1</SU>  81 FR 66791 (Sept. 29, 2016). The Guidelines are codified at 12 CFR part 30, appendix E. They were issued pursuant to section 39 of the Federal Deposit Insurance Act, 12 U.S.C. 1831p-1, which authorizes the OCC to prescribe enforceable safety and soundness standards. </FTNT> The 2016 Guidelines applied to banks with total consolidated assets of $50 billion or more. In 2018, the OCC amended the Guidelines to raise the threshold to $250 billion based on its view, at that time, that these larger, more complex, and potentially more interconnected banks presented greater systemic risk to the financial system and would benefit most from recovery planning. <SU>2</SU> <FTREF/> <FTNT> <SU>2</SU>  83 FR 66604 (Dec. 27, 2018). </FTNT> In October 2024, the OCC amended the Guidelines to apply to banks with average total consolidated assets of $100 billion or more; incorporate a testing standard; and clarify the role of non-financial (including operational and strategic) risk in recovery planning. <SU>3</SU> <FTREF/> <FTNT> <SU>3</SU>  89 FR 84255 (Oct. 22, 2024). </FTNT> <HD SOURCE="HD1">II. Recission of Guidelines</HD> As a part of the ongoing assessment of the agency's supervisory framework to identify and eliminate unnecessary regulatory burden, the OCC is proposing to amend 12 CFR part 30 by rescinding the Guidelines contained in appendix E. The Guidelines cause covered banks to direct significant resources towards developing responsive documentation. In the OCC's experience, much of this documentation is, by its nature, scenario-dependent or otherwise conjectural and, therefore, is likely to be irrelevant or of limited utility when a covered bank faces stress. Appropriate recovery options and communication procedures, for example, may vary widely depending on the facts and circumstances of the particular stress scenario, including many that would be outside of the covered banks' control or ability to reliably predict. Likewise, impact assessments for such recovery options appear conjectural by nature and of limited utility in an actual stress scenario. The OCC has also observed that covered banks are well attuned to indicia of stress without regard to the presence of the recovery planning triggers and escalation procedure expectations of the Guidelines. Moreover, the OCC is concerned that escalation or communication procedures or other actions tied to such triggers may be unnecessary or inappropriate under the particular facts and circumstances of a stress scenario. More generally, the OCC believes that proper risk management should be a dynamic process that involves real-time responses to the facts and circumstances of a stress event or periods of stress. As such, the OCC would not necessarily expect adherence to recovery plans. Rather, the OCC would expect to closely monitor a covered bank as it assesses and responds to a stress event. <SU>4</SU> <FTREF/> Banks are in the business of risk management and are constantly assessing and adjusting their operations to adapt to evolving risk factors and conditions. Relieving covered banks of the obligation to engage in prescriptive recovery planning activities will further restore the risk management function to bank management's control and enhances resource availability that can be directed towards improving risk management operations and other productive activities. <FTNT> <SU>4</SU>  Although the OCC does not intend to discourage covered banks from developing plans to address stress scenarios, the OCC does not expect to require or review the appropriateness of such plans, nor does it expect for the covered bank to adhere to such plan unless it is the most consistent with the bank's safe and sound operations under the circumstances. </FTNT> Further, the OCC's existing safety and soundness standards require all insured depository institutions to have effective risk management processes, including in times of stress, that is commensurate wi ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 23k characters. 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