New Rules Set Clearer Standards for MRAs and Supervisory Criticism

The FDIC and OCC have finalized new standards governing when examiners may identify an unsafe or unsound practice or issue a Matter Requiring Attention (MRA).

BankIn Minnesota public affairs partner Winthrop & Weinstine recently outlined the changes in a Client Alert for financial institutions. Effective November 2, the rule establishes a greater focus on material financial risk and actual violations of banking law, while setting clearer parameters around supervisory findings.

What's Changing

According to Winthrop & Weinstine's analysis, an unsafe or unsound practice must involve conduct that is contrary to generally accepted standards of prudent operation and has materially harmed, or is likely to materially harm, the institution's financial condition or present a material risk of loss to the Deposit Insurance Fund.

The rule also establishes clearer parameters for MRAs. Examiners may issue an MRA for conduct presenting material financial risk or for an actual violation of banking or banking-related law or regulation. Other supervisory observations involving weaknesses or deficiencies do not automatically require corrective action or reporting to the board.

For community banks, another important provision is the requirement that supervision be tailored based on factors including a bank's asset size, complexity, activities, capital structure, and other financial risk considerations.

What Your Bank Should Know

Winthrop & Weinstine identifies several steps banks should consider ahead of the November 2 effective date:

• Review outstanding MRAs against the new standards
• Reassess how MRAs and supervisory observations are escalated and reported to the board
• Review examination and issue-management procedures
• Train management and compliance personnel on the new standards

The firm also notes that the changes could result in more consistent examination outcomes and reduce the burden associated with technical or low-risk findings.

Another OCC Proposal to Watch

Winthrop & Weinstine also highlights a related OCC proposal that would distinguish substantive violations from technical violations when determining whether to issue an MRA or take other supervisory action.

For OCC-supervised banks, the proposal could further affect how examination findings and remediation requirements are handled. Comments are due October 1, 2026.

Read the Full Analysis

For more details on the new standards, their potential impact on examinations, and steps your bank should consider before the rule takes effect, read Winthrop & Weinstine's full Client Alert.