Banking and Finance Law Daily Wrap Up, FINANCIAL STABILITY—OCC proposes rescission of recovery planning guidelines for large banks, (Oct 28, 2025)

By Sherri M. Schroeder, J.D.

The agency seeks public comments on its proposal to rescind the recovery planning guidelines that took effect Jan. 1, 2025, and applied to banks with at least $100 billion in assets.

The Office of the Comptroller of the Currency (OCC) has requested comment on its proposal to rescind Appendix E to 12 C.F.R. part 30. The proposal would rescind the recovery planning guidelines for insured national banks, federal savings associations, and federal branches with at least $100 billion in assets. According to the OCC’s Oct. 27, 2025, news release, “Relieving covered banks of the obligation to engage in prescriptive recovery planning activities is consistent with the OCC’s ongoing effort to identify and eliminate unnecessary regulatory burden.”

Background. In Sept. 2016, the OCC adopted enforceable guidelines that required larger banks and institutions to have an appropriate plan for how to recover their financial strength and viability after a stress event or “trigger” (see Banking and Finance Law Daily, Sept. 28, 2016). Initially, institutions with average total consolidated assets of more than $50 billion were covered, although smaller institutions presenting a heightened risk could also be required to comply. In 2018, the guidelines were amended to increase the average total consolidated assets threshold for apply the guidelines from $50 billion to $250 billion; the OCC also decreased from 18 months to 12 months the time within which a bank should comply with the guidelines after the bank becomes subject to them (see Banking and Finance Law Daily, Jan. 4, 2019)).

However, following these amendments, the OCC found that several insured depository institutions with total consolidated assets under the $250 billion threshold and who were not subject to recovery planning failed in early 2023 (see Banking and Finance Law Daily, June 25, 2024). Therefore, the OCC revised its guidelines to expand the recovery planning guidelines to financial institutions with $100 billion or more in consolidated assets, incorporate a testing standard, and to clarify the role of non-financial, including operational and strategic, risk in recovery planning (see Banking and Finance Law Daily, Oct. 21, 2024). These guidelines became effective Jan. 1, 2025, with additional time given to covered institutions to implement the changes and to both develop a testing framework and conduct testing.

Proposed revision. The OCC proposes to amend 12 C.F.R. 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.” According to the proposed rule, the rescission would be “part of the ongoing assessment of the agency’s supervisory framework to identify and eliminate unnecessary regulatory burden.”

“[T]he 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,” the agency states in its proposal. “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. . .. 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.” (footnotes omitted)

The OCC goes on to discuss existing safety and soundness standards that already require effective risk management processes. “The duplication of these principles in the Guidelines can be eliminated without undermining the structural integrity of prudential regulation of covered banks,” notes the agency.

Finally, the OCC notes that unlike statutorily mandated resolution planning, there is no statutory requirement that covered banks undertake recovery planning. “Rather, the Guidelines impose an unnecessary regulatory burden on covered banks that consumes valuable resources and fails to account for management’s ability to assess and manage risks prior to and during periods of stress,” concludes the agency.

Request for comment. The OCC is requesting comment on any aspect of its proposal and especially on the specific issues discussed in the proposal’s “Supplementary Information” section. Comments must be received within 30 days of the proposal’s publication in the Federal Register. Comments may be made through the federal eRulemaking Portal, by mail, or by hand delivery or courier.

The OCC also requests feedback on whether it should codify the contingency funding plan expectations set forth in its “Interagency Statement of Funding and Liquidity Risk Management” and the “Importance of Contingency Funding Plans” addendum to that statement and, if so, whether the codified contingency funding plan requirements should apply to all OCC-regulated institutions or a subset of regulated entities.

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