BPI and AABD Comment on OCC’s ‘Heightened Standards’ Guidelines

Ladies and Gentlemen:

The Bank Policy Institute^[1] and the American Association of Bank Directors^[2] appreciate the opportunity to comment on the OCC's proposal (the "NPR" or the "proposal") to increase the asset threshold at which an institution becomes subject to the Guidelines Establishing Heightened Standards for Certain Large Insured National Banks, Insured Federal Savings Associations, and Insured Federal Branches set forth in 12 C.F.R. Part 30, Appendix D (the "Guidelines").^[3]

I. Executive Summary

We strongly support the proposal to raise the asset threshold, which would rescind the Guidelines for banks below the threshold. However, we urge the OCC to rescind the Guidelines for all banks.^[4] If the OCC does not rescind the Guidelines, we recommend that the agency substantially revise their content and re-issue the revised Guidelines as nonbinding supervisory guidance.

As the OCC recognizes in the NPR, the Guidelines have been criticized for their "extreme prescriptiveness."^[5] We agree with the core principle underpinning the Guidelines that the risk management framework needs effective checks to promote safety and soundness. However, complying with the Guidelines' prescriptiveness diverts bank and examiner attention away from the management of material risks, improperly focuses attention on process and documentation issues, and prevents banks from structuring their operations and implementing safe and sound banking practices in the manner most effective for their individual institutions. In addition, the Guidelines are unnecessary because there are other regulatory, supervisory, and legal safeguards applicable to banks that would continue to be subject to the Guidelines under the proposal. Moreover, maintaining the Guidelines is inconsistent with the broader set of reforms the OCC has recently proposed.^[6]

Eliminating the Guidelines for banks below the revised threshold would allow these institutions to adopt more tailored risk governance frameworks without changing the baseline expectation that banks maintain robust risk governance practices. With this change, these institutions would be better able to prioritize management of material risks, rather than focusing on compliance with prescriptive process requirements, consistent with the OCC's supervisory priorities and the other reforms the agency has recently proposed.

The Guidelines present the same problems for institutions above the proposed threshold as for those below it. Accordingly, the benefits of no longer being subject to the Guidelines also apply to those above the proposed threshold. Rescinding the Guidelines would give all the institutions presently subject to the Guidelines greater flexibility to operate in the manner most appropriate for their individual business profiles.

To read the full comment letter, please click here, or click on the download button below.

[1] The Bank Policy Institute is a nonpartisan public policy, research, and advocacy group that represents universal banks, regional banks, and the major foreign banks doing business in the United States. The Institute produces academic research and analysis on regulatory and monetary policy topics, analyzes and comments on proposed regulations, and represents the financial services industry with respect to cybersecurity, fraud, and other information security issues.

[2] The American Association of Bank Directors is a non-profit organization that represents the interests of bank directors throughout the United States. Founded in 1989, the American Association of Bank Directors is the only trade group in the United States devoted solely to bank directors and their information, education, and advocacy needs.

[3] OCC Guidelines Establishing Heightened Standards for Certain Large Insured National Banks, Insured Federal Savings Associations, and Insured Federal Branches; Technical Amendments, 90 Fed. Reg. 61084 (Dec. 30, 2025) (hereinafter "NPR") (proposing to increase the asset threshold at which the Guidelines apply from $50 billion to $700 billion).

[4] As in the NPR, the term "bank" as used in this letter means any insured national bank, insured Federal savings association, or insured Federal branch of a foreign bank. See id. at 61085 (defining "covered bank").

[5] Id. at 61086.

[6] See, e.g., Unsafe or Unsound Practices, Matters Requiring Attention, Notice of Proposed Rulemaking, 90 Fed. Reg. 48835 (Oct. 30, 2025) (hereinafter "Unsafe/Unsound Practices NPR").