Fed Examination Themes for 2026

For banks and bank holding companies subject to Federal Reserve oversight, 2026 has brought the most significant recalibration of examination practice in years. Since late 2025, the Board has been unwinding a supervisory posture built up in the aftermath of the 2023 regional bank failures and replacing it with a leaner, risk-focused model that concentrates on material financial threats rather than procedural or documentation gaps. The result, visible in the Fed's own data, is fewer open findings, faster closures, and a narrower definition of what warrants formal supervisory criticism.^1,4

Below are the themes that matter most for institutions preparing for exams this year.

1. A New Rulebook: The Statement of Supervisory Operating Principles

The starting point for nearly every change underway is the Statement of Supervisory Operating Principles (SSOP), first issued in October 2025 and updated in April 2026 under Vice Chair for Supervision Michelle Bowman and Director of Supervision and Regulation Randall Guynn.² The SSOP directs examiners to prioritize threats to safety and soundness over "check-the-box" process, procedure and documentation issues. This sets a higher bar for the findings that historically drove supervisory friction: matters requiring attention (MRAs) and matters requiring immediate attention (MRIAs).

The April 2026 update sharpened several points from the original statement:

• Consistency between exit meetings and written reports, examiners can no longer raise new or different criticisms in the final written report than what was communicated verbally at the exit meeting, eliminating surprises for supervised firms
• A higher enforcement threshold, to support an enforcement action, examiners must now show an "abnormal probability of abnormal harm" to a firm's financial condition
• Quantitative tests for "significant harm", the Fed is developing measurable tests, such as whether a loss would push a firm below "well capitalised" status or trigger a significant near-term liquidity outflow, to determine when a loss justifies supervisory action
• Prompt termination of findings, once a deficiency is remediated, examiners are expected to close the related MRA or MRIA "as promptly as possible," rather than allowing findings to linger

2. The Great MRA/MRIA Cleanup

Perhaps the most concrete evidence of this shift is the Fed's ongoing two-phase review of every outstanding safety-and-soundness MR(I)A, launched in February 2026 to test existing findings against the new SSOP standard. Findings that have already been effectively remediated, or that don't pose a meaningful probability of significant harm, are being downgraded to non-binding "supervisory observations" or closed outright.¹

Phase one wrapped up in March 2026, with results communicated to firms by March 31; phase two, coordinated with state banking agencies, is targeted for completion by mid-2026. Outstanding MR(I)As at community and regional banking organizations fell in 2025 to levels last seen before the 2023 bank failures, and large financial institutions saw both the total count and the average number of findings per firm decline in the second half of 2025.^1,4

3. Where the Findings Still Concentrate

Despite the overall decline, the composition of outstanding findings tells its own story about where risk, and scrutiny, remains concentrated:¹

• IT and operational risk (including cybersecurity) is the single largest category of outstanding findings at community and regional banking organizations, ahead of risk management/internal controls and credit risk
• BSA/AML and OFAC compliance dominates outstanding findings at foreign banking organizations with US assets under $100 billion
• Governance and controls (including operational resilience and technology change management) remains the most frequent weakness at the largest institutions, alongside capital planning and liquidity risk management
• Commercial real estate, particularly office and multifamily exposures, continues to draw dedicated attention given continued softness relative to pre-pandemic demand
• Exposure to non-depository financial institutions (NDFIs) is an area of growing supervisory interest following a string of high-profile NDFI defaults

4. Smaller, More Targeted Horizontal Reviews

The Fed is also rethinking how it runs horizontal reviews, the comparative examinations conducted across peer groups of large institutions. Beginning in 2026, the Fed is shifting to smaller, more tailored reviews, with scope and intensity calibrated to a firm's size, complexity, and risk profile. Reviews will only proceed when the benefits to safety and soundness clearly outweigh the costs, a determination made annually during supervisory planning.¹

Firms will also be assessed against supervisory expectations and applicable regulations, not against "best practices" observed among peers, meaning institutions should no longer expect to be criticised simply for lagging behind what other banks in a review are doing.

5. Reduced Duplication With Other Regulators

The updated SSOP leans further into reliance on the work of other supervisors. For depository institution subsidiaries, Fed examiners are now expected to rely on the primary state or federal supervisor's findings to the maximum extent possible, with independent examination reserved for cases where that supervisor doesn't provide timely access to its own supervisory information.^2,3 Similarly, where a firm's internal audit function is rated effective, examiners are expected to rely on its validation of remediation rather than independently re-testing it.

6. Ratings Frameworks Are Being Rewritten

Supervisory ratings are catching up to the same philosophy. In December 2025, the Board finalised revisions to the Large Financial Institution (LFI) rating framework, effective January 16, 2026, which widened the definition of "well-managed", visible in the immediate increase in the share of large financial institutions classified as well-managed once the new definition took effect. Separately, in May 2026 the FFIEC proposed changes to the CAMELS rating system used across community and regional banks, aimed at ensuring composite and component ratings reflect materiality to the institution rather than mechanically weighting management or procedural factors.¹

7. A Lighter-Touch Capital and Innovation Agenda

Examination priorities aren't developing in isolation, they sit alongside a broader deregulatory push:¹

• Capital framework modernisation, in March 2026, the Fed and its fellow regulators proposed changes to Basel III implementation, the standardised approach, and the GSIB surcharge, with comments due in June 2026
• Community bank leverage ratio relief, a final rule effective July 1, 2026 lowers the CBLR threshold from 9% to 8% and extends the grace period for temporary non-compliance from two quarters to four
• Reputational risk removed as a supervisory factor, with a February 2026 proposal to formally codify that removal and reinforce that supervisory judgments should rest on financial risk, not reputational considerations
• A more permissive stance on innovation, including a new policy statement on permissible activities for state member banks and continued work toward implementing federal stablecoin legislation

What This Means Going Into the Rest of 2026

Taken together, these developments point to a supervisory environment that is narrower in scope but not necessarily lighter where it counts. Institutions should expect:

• Fewer, more targeted exams, examiners are now required to write criticisms so that "a person of ordinary intelligence" can readily understand both the deficiency and what remediation looks like
• A shrinking inventory of legacy MRAs/MRIAs, replaced in some cases by informal supervisory observations that carry less regulatory weight but still signal areas worth addressing proactively
• Sustained focus on credit concentration risk, funding stability, and technology/cyber resilience, even as broader process-and-documentation criticism recedes
• Greater reliance on internal audit and other regulators' work, which raises the stakes for banks to keep those functions strong
• A leaner supervisory apparatus overall, the Fed's Division of Supervision and Regulation is targeting a roughly 30% reduction in Board-level staff by the end of 2026 through attrition

The net effect is a supervisory posture that gives well-managed institutions more room to operate and fewer unresolved findings to carry, but one that still expects rigorous self-identification and remediation of material risk, with internal audit and boards bearing more of that responsibility than before.