Key facts
- The OCC and FDIC finalized rules defining "unsafe and unsound" banking practices.
- The rules provide formal guidelines for bank examiners.
- The definitions aim to offer clarity and certainty in bank examinations.
- The Federal Reserve has not yet proposed its own definition.
U.S. banking regulators have finalized rules that formally define "unsafe and unsound" practices for lenders. The Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) announced the completion of these rules on Thursday, marking the first time such actions have been formally defined by a bank regulator. The agencies stated that the new definitions will offer "clarity and certainty" in bank examinations. These changes are part of a broader effort by the Trump administration to reform how banks are policed. The Federal Reserve, which shares supervisory responsibilities for large institutions, has not yet released its own proposal for defining these activities. Regulatory heads have indicated a need for examiners to concentrate on core financial risks, moving away from an excessive focus on minor issues.