The Office of the Comptroller of the Currency (OCC) has launched the most significant overhaul of its supervisory framework for Community Banks in more than a decade. In just three weeks, the agency has:

• Announced a major organizational restructuring that expands the Community Bank category to include institutions up to $30 billion in assets.
• Issued three new bulletins (2025-24, 2025-25, and 2025-26) that collectively redefine how Community Banks will be examined, validated, and overseen.

Together, these actions signal a new era in OCC supervision, one that replaces prescriptive, policy-driven oversight with a more flexible, risk-proportionate model. For Community Banks, this means the responsibility for defining and demonstrating sound risk management now shifts inward. Banks will need to strengthen self-examination, deepen governance practices, and enhance internal monitoring to anticipate examiner expectations. Because exam standards will be less uniform and more judgment-based, institutions must navigate greater uncertainty about how those expectations will evolve and be applied in practice.

Examinations: Frequency and Scope for Community Banks (Bulletin 2025-24) 

The Change

Effective January 1, 2026, the OCC will eliminate all policy-based examination activities that are not required by statute or regulation. Instead of following fixed checklists and mandatory cycles, examiners will use their discretion to tailor exam scope and frequency based on each bank’s size, complexity, and risk profile. The agency will also place greater reliance on quarterly monitoring and bank-provided reports as part of its ongoing supervision.

The Rationale

For years, examiners were required to perform certain reviews at predetermined intervals, such as annual fair lending assessments or flood insurance testing every three cycles, regardless of whether risk levels warranted that scrutiny. The OCC concluded that this approach drained resources from both examiners and banks without proportionally improving safety and soundness. This bulletin formalizes a transition toward risk-based discretion, where examiners focus only on areas of material concern while reducing procedural burden for well-managed institutions. For most Community Banks, this creates both opportunity and exposure.  Those with disciplined self-assessment and credible governance will benefit from lighter touch exams, while others may experience deeper scrutiny under examiner discretion.

The Impact on Community Banks

This shift changes more than exam scheduling. It redefines accountability:

• Less Prescription, More Examiner Judgment:  With predefined tasks eliminated, banks can no longer rely on routine cycles to anticipate examiner focus. Each exam will now be shaped by how the OCC perceives a bank’s risk posture and internal control maturity.
• Heavier Reliance on Self-examination:  Banks must proactively identify, document, and monitor risk between exam cycles. Quarterly internal reviews, management reports, and governance oversight will now form the primary evidence base examiners rely upon.
• Governance as a Differentiator:  A bank’s ability to demonstrate credible self-assessment, risk monitoring, and remediation discipline will directly influence the intensity of its next exam. Weak documentation or inconsistent monitoring will invite deeper reviews.
• Uncertainty in Standards:  Without defined procedural standards to reference, banks will face greater ambiguity about what constitutes “enough” oversight or documentation.

In effect, the OCC has shifted the supervisory burden inward. Community Banks are now expected to act as their own first-line examiners and to be ready to evidence that discipline when OCC arrives.

Retail Nondeposit Investment Products (RNDIPs): Exam Procedures for Community Banks (Bulletin 2025-25) 

The Change

The OCC announced that it will no longer use the “Retail Nondeposit Investment Products” (RNDIP) booklet of the Comptroller’s Handbook when examining Community Banks. Those procedures were originally developed for large banks with complex investment programs. Going forward, examiners will assess Community Bank RNDIP activities using only the core standards in the Community Bank Supervision booklet, which are less burdensome and more proportionate to the scale of these programs.

The Rationale

Most Community Banks engage in RNDIP activities through third-party partnerships or limited retail offerings, far different from the direct investment platforms operated by large banks. Applying the same comprehensive procedures used for major institutions created an excessive burden and discouraged smaller banks from offering legitimate, well-controlled products. The OCC’s revision recognizes that smaller, well-managed Community Banks can oversee these activities effectively without being subjected to large-bank exam depth.

The Impact on Community Banks

While this bulletin reduces procedural overhead, it also transfers more responsibility for self-monitoring and third-party oversight to bank management.

• Simplified Oversight, But Not Fewer Obligations:  Community banks must still comply with all applicable laws, including the Gramm-Leach-Bliley Act, securities and insurance laws, consumer privacy rules, and BSA/AML requirements, but now must also determine internally how best to evidence compliance.
• Stronger Vendor Management Expectations:  With the OCC no longer performing detailed RNDIP transaction testing, banks must ensure third-party partners (e.g. broker-dealers, insurance providers, referral networks) maintain adequate controls and reporting.
• Heightened Need for Risk Reporting:  Examiners will depend more on internal reports and board oversight summaries to gauge risk management effectiveness.
• Uncertain Depth of Review:  Because examiners will apply only core standards, banks cannot assume uniform coverage across institutions. Examiner judgment will determine how deeply RNDIP activities are reviewed.

This change underscores a key theme of the new OCC model – fewer checklists and greater self-accountability. Banks that cannot demonstrate ongoing oversight of their RNDIP partners or control environments may find that examiners compensate with more intrusive follow-up. In this environment, documentation of third-party due diligence and ongoing oversight will carry as much weight as the partnerships themselves.

Model Risk Management: Clarification for Community Banks (Bulletin 2025-26) 

The Change

The OCC clarified that Community Banks are not required to conduct full model validations annually and may tailor model risk management practices based on their risk exposure, model complexity, and business activities. The agency emphasized that examiners will not issue negative supervisory feedback solely for validation frequency or scope, provided the bank can justify its approach as risk-appropriate.

The Rationale

This is not simply regulatory relief. It is a call for structured discretion:

• Tailored Validation Planning: Banks must now determine and document what “reasonable” validation frequency looks like based on model importance, complexity, and risk exposure.
• Greater Self-Governance Responsibility:  By giving flexibility, the OCC expects banks to justify their decisions with written frameworks, board-approved policies, and evidence of ongoing model performance monitoring.
• Enhanced Examiner Reliance on Bank Documentation:  Examiners will look for credible model inventories, change controls, and performance tracking to assess whether oversight is sufficient.
• Potential Inconsistency in Supervision: Because examiners now exercise more judgment, banks could face differing interpretations of adequacy until supervisory norms stabilize.

The takeaway is that the OCC is trusting Community Banks to exercise professional judgment, but it will expect them to prove that judgment was exercised thoughtfully. Documentation, rationale, and risk monitoring will now be the defense against examiner challenge.

What It All Means

Viewed together, these actions reflect a deliberate and cohesive policy shift toward a supervisory philosophy designed to balance regulatory efficiency with heightened institutional accountability. While each bulletin addresses a distinct operational area, their collective effect is unmistakable.  Community Banks are now expected to self-identify, self-govern, and self-correct with far less procedural guidance than before.

Several key themes emerge from this reset, each redefining how Community Banks will be evaluated going forward:

• Risk-Proportionate Supervision:  Examiner judgment now replaces fixed OCC checklists. Scope and intensity will vary based on a bank’s demonstrated control maturity, risk profile, and governance practices. For Community Banks, this introduces both opportunity and risk. Those with strong frameworks may see reduced exam disruption, while others may face intensified scrutiny if risk management appears inconsistent or reactive.
• Expanded Community Bank Portfolio:  With “Community Bank” now defined to include institutions up to $30 billion, OCC supervision will cover a much broader spectrum of balance sheets, complexity, and risk exposure. This means the same supervisory category now encompasses small-town lenders and near-midsize banks with multi-state operations and fintech relationships. Examination expectations are likely to scale upward, prompting smaller banks to align at least partially with practices once reserved for mid-tier institutions.
• Governance Over Procedure:  The OCC is effectively moving from a rulebook-driven model to a governance-driven one. Examiners will place greater emphasis on the strength of internal reporting, the integrity of risk frameworks, and the role of boards and senior management in overseeing emerging risks. A well-run risk committee, robust management information systems, and timely escalation mechanisms will now matter more than adherence to static policy requirements.
• Efficiency With Accountability:  The OCC’s stated goal is to reduce regulatory burden, but the tradeoff is clear.  Efficiency for examiners will only be possible if Community Banks shoulder greater responsibility for their own supervisory readiness. The agency expects institutions to invest in better data, better analytics, and more disciplined internal oversight to sustain the credibility of their “self-monitoring” posture.

For Community Banks, this combination does not mean lighter oversight. It means fewer predefined instructions and more performance-based evaluation. Institutions will face fewer regulatory touchpoints, but each will carry greater weight. Success under the new framework will depend on how effectively a bank can demonstrate continuous self-assessment, sound governance, and readiness to evidence risk control even without prescriptive guidance.

Why Community Banks Choose iKinetiq

The OCC’s new supervisory framework does more than change examination logistics. It fundamentally reshapes the relationship between Community Banks and their examiners. Where the OCC once prescribed what to test and when, it now expects institutions to define, monitor, and demonstrate their own risk discipline. This shift is where many banks will struggle and where iKinetiq delivers distinct advantage.

Community Banks now need partners who understand both the regulatory mindset and the operational realities of implementing credible, exam-ready risk governance. iKinetiq sits precisely at that intersection. Our team’s experience spans the full supervisory spectrum from community institutions to systemically important banks, and we translate that knowledge into actionable frameworks that scale to a bank’s size and complexity.

Our solutions are not templates. They are designed to help Community Banks build examiner-reliant governance, including structures, processes, and reporting systems that examiners can rely on as a credible basis for their supervisory work. This alignment saves time, reduces disruption, and signals control maturity to the OCC.

How iKinetiq Helps Community Banks Lead in the New Environment:

Each of our solutions is built to align precisely with this new direction for OCC supervision, helping Community Banks demonstrate control maturity with confidence.

• Exam Readiness and Governance Support:  We help banks move beyond document gathering to develop cohesive, examiner-reliant narratives that connect board oversight, risk assessments, and control evidence into a unified story of safety and soundness.
• Quarterly Monitoring and Analytics Design:  The OCC has reaffirmed its focus on off-site monitoring and data-driven supervision. iKinetiq builds customized dashboards and key risk indicators that mirror what examiners monitor, allowing banks to anticipate questions, not just answer them.
• Model Risk Governance:  Under the new flexibility, Community Banks must now justify validation frequency and scope. We design proportional validation frameworks that demonstrate sound judgment and satisfy examiner expectations without unnecessary cost or complexity.
• Third-Party Risk Management:  As OCC reduces RNDIP exam intensity, responsibility shifts squarely to the bank. We help Community Banks strengthen vendor due diligence, oversight, and documentation, especially for fintech and investment partnerships, so they can expand safely under the new regime.
• Enforcement Avoidance Intelligence:  Using our proprietary TPOC scoring and RegHQ analytics, we identify early warning signals that align with enforcement patterns. This insight allows banks to remediate issues proactively and enter exams with data-backed confidence.

In a supervisory model built on examiner judgment, the banks that will thrive are those that can demonstrate sound judgment of their own. iKinetiq equips Community Banks to do exactly this, building the governance, analytics, and readiness disciplines that turn regulatory uncertainty into strategic advantage.

The Bottom Line

The OCC’s new framework signals a modernized approach to Community Bank supervision that reduces procedural noise but raises the bar for governance maturity, internal monitoring, and examiner engagement.

For Community Banks, 2026 will not bring fewer expectations, just fewer checklists. The responsibility for demonstrating safety, soundness, and compliance now rests squarely within each institution’s own governance and reporting systems. Those that adapt early will shape the new definition of examiner-ready performance.

iKinetiq helps Community Banks lead through this transition with intelligence, structure, and foresight, transforming regulatory uncertainty into strategic readiness.

🔗    Want the full framework behind this post? Download iKinetiq's 2026 Community Bank Supervision Blueprint to see five examiner focus areas and practical exam prep steps.

👉  Schedule your free consultation now to ensure your institution is prepared for the OCC’s new supervisory framework before the 2026 exam cycle begins.

OCC Publication Links:

OCC News Release 2025-89 (Organizational Updates)

OCC Bulletin 2025-24 (Examinations: Frequency and Scope)

OCC Bulletin 2025-25 (Retail Nondeposit Investment Products)

OCC Bulletin 2025-26 (Model Risk Management Clarification)

© 2025 iKinetiq Innovation Solutions, LLC. All Rights Reserved.

The New Supervisory Framework

Under the reorganization, the OCC will realign institutions into three supervisory categories:

• Large & Global – institutions with $500B+ in assets and foreign-owned banks
• Regional & Midsize – institutions with $30B–$500B in assets
• Community Banks – institutions up to $30B in assets

What This Means for Community Banks

1. Expanded Peer Group

Institutions in the $10–30B range will now be included in the Community Bank line. Smaller Community Banks will now be benchmarked against a larger and more complex peer group, even if exam scope is tailored to their size and risk profile.

2. Broader Examiner Expertise

With $10–30B institutions now included in the Community Bank portfolio, examiners will need to draw on supervisory tools more common in the midsize line such as stress testing, advanced liquidity oversight, and vendor/fintech risk analysis particularly for larger Community Banks.

3. Tailored Exam Scoping

According to Comptroller Gould, the OCC’s new approach will tailor the exam scope to each bank’s size, complexity, and risk profile. Smaller Community Banks may see lighter exam scoping, but larger Community Banks should expect broader, more robust modules.

4. Higher Enforcement Visibility

With larger and more complex banks now included, enforcement actions and civil monetary penalties will feature more prominently across the Community Bank portfolio.

Why It Matters Now

This shift redefines the playing field. For Community Banks, it means new peer comparisons, evolving supervisory expectations, and greater focus on enforcement trends.

At iKinetiq, we have supported institutions across all supervisory categories from Community Banks to midsize institutions to systemically important banks. We know how examiner expectations shift across portfolios, and we bring that insight to help Community Banks prepare under this new supervision framework.

Next Steps

Now is the time to get ahead of the change. Our Regulatory Risk Profile provides a data-driven view of enforcement trends, peer benchmarks, and risk distribution for Community Banks under the OCC’s new supervisory structure.

📅  Schedule your complimentary consultation with our team to review your bank’s risk profile in this new environment.

👉  Official OCC announcement: OCC News Release

© 2025 iKinetiq Innovation Solutions, LLC. All Rights Reserved.

        Source:  American Banker, July 2025, using Capital Performance Group data 

Introduction

American Banker just released its annual ranking of the 20 top-performing banks with $2B–$10B in assets. These institutions stood out not because of massive growth or fintech flash, but because of something more fundamental, risk discipline.

While 2024 squeezed margins across the sector, these banks managed:

• Lower cost of funds (1.97% vs. 2.46% peers)
• Higher Net Interest Margins (NIMs) (4.08% vs. 3.18%)
• Stronger Return on Average Equity (ROAE) and lower efficiency ratios

Why It Matters

In a year of much greater regulatory enforcement actions, these banks still pulled ahead by doing the basics exceptionally well, controlling funding costs, maintaining credit quality, and investing in deposit relationships. That makes their 2024 performance really stand out.

Now, in 2025, regulatory enforcement actions have virtually gone quiet.  But that’s exactly why this matters.

The vast majority of these top-performing banks have no enforcement history over the last 25 years. That’s not luck. It’s disciplined risk management, and it shows up in their performance. Even among the few FDIC-regulated banks with past enforcement issues, the record shows correction and recovery rather than repeat violations.

What this proves is simple.  Banks that consistently manage risk well outperform their peers even amidst heightened regulatory enforcement. These institutions stay exam-ready, strategically focused, and financially strong through every cycle. “Discipline first” isn’t just a compliance mindset. It’s a performance advantage.

Where iKinetiq Can Help

We help forward-looking banks, especially Community Banks with total assets $1B to $10B:

• Benchmark against risk and regulatory trends (including top-performer profiles)
• Identify blind spots before examiners do
• Prepare for the coming shift in enforcement posture expected for the remainder of 2025 and into 2026

👉  Want to see how your bank stacks up?  Book your free 30-minute consult.

© 2025 iKinetiq Innovation Solutions, LLC. All Rights Reserved.