The Office of the Comptroller of the Currency today announced it is ending Money Laundering Risk System data collection, easing Bank Secrecy Act examination procedures for community banks, and is seeking public feedback on core providers and other third-party service providers – all as part of an effort to support smaller institutions.
The OCC defines community banks as institutions with less than $30 billion in assets. According to a series of announcements:
- Effective immediately, the OCC will no longer collect information from community banks through the Money Laundering Risk System. The agency said it has determined that there are alternative, less burdensome means of assessing community banks’ money laundering and terrorist financing risk.
- The OCC issued a new bulletin establishing tailored BSA examination procedures for community banks “based on these banks’ generally low levels of money laundering and terrorist financing risk.” The new procedures will be effective for examinations beginning Feb. 1, 2026.
- The agency also issued a request for information on community banks’ engagement with their core service providers and other essential third-party service providers. Specifically, the request “focuses on ensuring that community banks can remain competitive in a rapidly evolving marketplace, and includes questions on the challenges community banks face related to contract negotiations and terms, fees, billing practices, oversight, due diligence, innovation, core conversions, data access and modernization, and interoperability issues.”
“Community banks provide the majority of small business lending and are essential to a diverse, competitive and resilient financial system,” Comptroller of the Currency Jonathan Gould said in a statement. “Today’s actions further relieve community banks of unnecessary regulatory requirements and seek to better position them to help fuel job creation and economic development in local communities across the country.”
The OCC also said it is drafting a proposal to reduce the community bank leverage ratio requirement, which will be announced soon.
In a statement, American Bankers Association President and CEO Rob Nichols said the association welcomed the additional steps being taken by the agency to reduce community banks’ regulatory burden.
“Today’s Bank Secrecy Act guidance recognizes the lower risk associated with traditional community banking activities and helps level the playing field for community banks by ending the Money Laundering Risk System data collection, a regulatory burden that fell exclusively on smaller institutions,” Nichols said. “Community banks and the customers and communities they serve will benefit from the OCC’s new commitment to regulatory tailoring and risk-based supervision.
“In addition to today’s BSA changes, we also appreciate the OCC’s Request for Information on the challenges community banks face with core service providers, which has been an important area of focus for ABA’s banker-led Core Platforms Committee,” he added. “We look forward to working with the OCC to strengthen the bank-core relationship and ensure successful implementation of these important reforms.”
