OCC and FDIC Finalize Rule Limiting Bank Supervisory Discretion

This rule narrows the regulatory toolkit for bank examiners, shifting the burden toward demonstrable financial or legal harm rather than subjective reputational concerns. For crypto firms, it could reduce the opaque debanking pressures that have stemmed from discretionary supervisory actions, potentially easing access to banking relationships. The key question is whether courts and future administrations uphold this interpretation, as a change in agency leadership could revisit the definition. The materiality threshold also leaves room for interpretation, so examiners may still find indirect ways to act on risk concerns, keeping the practical impact uncertain.