OCC lessens BSA rules for community banks

The Office of the Comptroller of the Currency announced Monday 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.”