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The banking industry is on the cusp of more changes in recovery and resolution planning, shaped by shifting regulatory priorities and perspectives on the 2023 regional bank failures. Recent actions by the FDIC and OCC have previewed a rollback of enhanced requirements introduced just last year—moves that would reduce the documentation required from large institutions. This article summarizes the proposed changes and potential impacts.

Why Regulators Are Changing Course

The 2023 regional bank failures raised questions about resolution readiness, prompting regulators to strengthen rules in 2024. The FDIC revised its resolution planning rule effective October 2024, and the OCC updated its recovery planning guidelines effective January 2025. These changes applied recovery and resolution planning standards to a broader range of banks, increased the frequency of submissions, and added more detailed content requirements.

In October 2025, a speech from Acting FDIC Chairman Travis Hill and an OCC notice of proposed rulemaking to rescind its recovery planning guidelines previewed a pendulum swing back the other way. Regulators appear now to be contemplating whether plans will truly be useful in a crisis, or if banks are better served focusing their time and resources on dynamic risk management and operational capabilities.  

FDIC Resolution Planning: Key Potential Changes

The FDIC’s resolution planning rule applies to insured depository institutions with $50 billion or more in assets, known as covered insured depository institutions (CIDIs). Submissions under this CIDI rule are focused on providing the FDIC with information to facilitate the orderly resolution of a failed bank. They are distinct from plans submitted by large bank holding companies under section 165(d) of the Dodd-Frank Act (165(d) plans), which address resolution of the entire banking organization.

Acting Chairman Hill previewed upcoming changes to the CIDI rule in his October 2025 speech which include:

• Codification of FAQs released by the FDIC in April 2025, which exempted CIDIs from certain content required by the rule and provided other relief;
• Potential streamlining of other content required by the rule; and
• Reevaluation of CIDI plans for domestic 165(d) plan filers using a single point of entry (SPOE) strategy. The FDIC is considering eliminating the requirement for these institutions to file a CIDI resolution plan. Since the SPOE strategy contemplates only the top-tier holding company entering bankruptcy, Acting Chairman Hill suggested separate planning for the bank’s resolution may be unnecessary.

One notable shift under the FAQs was the FDIC’s preference for a weekend sale over the traditional bridge bank approach. The FAQs exempted Group A CIDIs, those with $100 billion or more in total assets, from the CIDI rule’s requirement to use a bridge bank as a default resolution strategy. In his recent speech, Acting Chairman Hill indicated the FDIC is focused on increasing the likelihood of a quick sale by improving its marketing process, incorporating feedback from large institutions who are potential acquirers, and reexamining its bidder eligibility criteria. This includes facilitating participation from nonbanks such as private equity firms. The House Financial Services Committee also has been exploring enhanced participation in failed bank bidding through a recent hearing and draft legislation.

OCC Recovery Planning: Key Potential Changes

The OCC’s recovery planning guidelines require national banks with $100 billion or more in total assets to prepare detailed plans to avoid a stress scenario worsening into resolution. The plans must discuss recovery options a bank could execute, consider both financial and non-financial risks, and be tested annually. 

The OCC is now proposing to rescind these guidelines entirely to address its concerns about:

• Resource burden: Banks devote significant resources to plans that may ultimately not be useful given the fact-specific circumstances of any stress scenario.
• Duplication: Recovery planning overlaps with existing risk management expectations and contingency funding plan (CFP) expectations. The OCC indicated banks are in the business of risk management and already aware of the need to monitor and adapt.

The OCC is also seeking comment on whether it should codify its CFP expectations, which are currently set out in an interagency policy statement and addendum, and apply them to all OCC-regulated institutions or only a subset of them.

Potential Industry Impact: Less Paper, More Practice

These efforts reflect a broader deregulatory trend under the current administration to reduce compliance costs and focus on material financial risks. However, less documentation will not mean less preparation. Even if the changes are implemented, institutions must still:

• Maintain robust risk management processes and adjust them based on market conditions and evolving risks;
• Continue testing required in other contexts (stress testing, CFP-related testing, and testing of 165(d) plan capabilities) and incorporate lessons learned into recovery and resolution preparedness; and
• Prepare and submit any required plans, including CIDI resolution plans for institutions who remain subject to those requirements, 165(d) plans for the largest institutions, and CFPs.

Regulators will likely increase their focus on testing, which often occurs through tabletop exercises or other simulations.  More robust testing has been a consistent theme of regulatory feedback and guidance on 165(d) plans since 2019. Although testing of recovery capabilities may no longer be mandated, institutions may choose to test capabilities for more broadly responding to financial stress when engaging in other testing.

Looking Ahead

Further changes to the CIDI rule may require CIDIs already preparing for next year’s submissions to adjust. Public filings from Group A CIDIs that submitted full plans in July 2025 show they already have broadened their resolution strategies beyond bridge banks in response to the April 2025 FAQs. Most opted in their public plan sections for a range of alternative resolution strategies. These included a weekend sale or sale after a short-term bridge bank; a multiple acquirer exit from a longer-term bridge bank through sales of franchise components, material asset portfolios, and/or core business lines; and payoff of insured depositors and liquidation of the bank.

As the FDIC and OCC continue to develop their respective proposals, institutions may need to pivot again in their plan development. However, in an era of rapidly changing technology and frequent market fluctuations, the need to focus on operational resiliency, capital and liquidity strength, and risk management will remain constant.