12/02/2025

OCC updates BSA/AML examination procedures for community banks

Davis Polk

On November 24, 2025, the Office of the Comptroller of the Currency (OCC) announced two actions intended to tailor Bank Secrecy Act/Anti-Money Laundering (BSA/AML) supervision and reduce compliance burdens for community banks.1 First, the OCC released new procedures for OCC examiners to follow when assessing the anti-money laundering and countering the financing of terrorism (AML/CFT) programs of community banks (the Community Bank Procedures).2 Second, the OCC announced that it will no longer annually collect information from community banks through the Money Laundering Risk (MLR) System.3 Comptroller of the Currency Jonathan Gould said that these changes were designed to “relieve community banks of unnecessary regulatory requirements,” consistent with the administration’s broader efforts to reduce costs and burdens under the BSA.

Over the past year, the new administration has prioritized BSA reform through deregulatory actions and updates to guidance. For example, the federal banking agencies released updated guidance this October intended to streamline suspicious activity report (SAR) filing for financial institutions (as discussed in our client update). Like the updated SAR guidance, the Community Bank Procedures represent an incremental change to BSA/AML supervision, rather than a rollback of regulatory requirements. The new procedures do not dramatically alter BSA/AML supervision for community banks (defined as institutions with up to $30 billion in assets), but they do provide discretion to examiners to reduce the burdens and scope of exams in key areas. They will become effective for examinations starting February 1, 2026.