RecentOffice of the Comptroller of the Currency (OCC)announcements support community banksbyreducingregulatoryburdens, reflectingtheagency’sefforts toalignits supervisory frameworkswiththe size and risk profile of an institution.
In an announcementregardingthe changes, Comptroller of the Currency Jonathan V. Gould noted, “Community banks providethe majority ofsmall business lending and are essential to a diverse,competitiveand resilient financial system.Today’s actions further relieve community banks of unnecessary regulatory requirements andseekto better position them to help fuel job creation and economic development in local communities across the country.”
BSA/AML Begins Feb. 1, 2026: What Community BanksNeed to Know
,announcedNov.24, 2025,andeffectiveFeb.1, 2026,reduce burdenson community banks byemphasizing examiner discretion to:
- Relyon satisfactory independent testing to form a basisfor conclusions for specific examination procedures.
- Carry forward prior examination conclusions forthetrainingand BSA Compliance Officer pillars for one examination cyclewhen there havenot been significant changes to the bank’s risk profileand inconsideration ofother relevant factors.
- Determinewhether and to what extent to perform transaction testing,orifit’sappropriate tolimit testing to analytical or other reviews.
New BSA/AML:WhattoExpect from Examiners
ThenewCommunity Bank Minimum Bank Secrecy Act/Anti-Money Laundering (BSA/AML) Examination Proceduresfocusexaminerson threeprimaryobjectives:
- Scoping and Planning
Examinerswilldevelop an understanding of the bank’s money laundering/terrorist financing (ML/TF) and other illicit financial activity risk profile,develop a risk-focused examination scope,and document the BSA/AML examination plan. - BSA/AML Compliance
Examiners willdeterminewhether the bank has designed, implemented, andmaintainsan adequate BSA/AML compliance programthat meetsBSA regulatory requirements. - Develop Conclusions and Finalize the Examination
Using the bank’s risk profile and overall compliance withBSA regulatory requirements,examiners willdeterminetheadequacy of the bank’s BSA/AML compliance program, anddocument and communicateexamination findings to the bank.
MLR Revisions:No MoreAnnualMandatory Data Required,Input Requested
The OCC also announcedthat as of Nov.24, 2025, it hasdiscontinuedannual mandatory data collection from community banks under the Money Laundering Risk (MLR)System.
It alsoissued a request for information(RFI)tohelpthe OCCbetter understand the challenges community banks face with core service providers and other essential third-party service providersin areaslikecontract negotiations and terms,billing practices, oversight, due diligence, core and legacy system conversions,anddataaccess.
The RFI includesquestionsregardingpotentialOCCactionsthat couldaddress these challenges, such asreduced burdens related tosupervisory practices, policies, and guidance. The comment period closed in January 2026, and the èƵ team continues tomonitoroutcomesofthe OCCfinal report.
Changes toCBLR FrameworkProposed
Finally, the OCCnotedthatits ongoing workincludes a proposal to reduce thecommunitybankleverageratio(CBLR)requirements.The comment period for the proposedamendmentsendsJan.30, 2026;further details, including potential implementation timelines,are expectedto comein earlytomid-2026.
Your Takeaway
Regulatory and compliance burdens are rapidly evolving, with many changes thatstand tobenefitsmaller and mid-sized community banks.Bank boards should invest the time now to understand current, pending,and proposedupdates that could significantlyimpacttheir organization’sstrategic planning, growth,compliance, andmerger & acquisitiondecisions.To help yourboard or organization navigate these and otherchanges, contact your èƵ advisor orBeth Behrend,CCBCO, CBAP,at[email protected]or616.975.4100orMynesha Phifer, CCBCO,at[email protected]or734.302.4152.