Recovery and Resolution Planning Requirements in US Financial Services

On January 1, 2025, the OCC enhanced their Recovery Planning requirements. Below are some of the most salient enhancements:  

• Extend enforceable recovery planning standards to banks and savings associations with $100bn+ in consolidated assets.
• Require an annual plan testing framework tailored to size, complexity, and risk profiles.
• Mandate inclusion of financial, operational, and strategic risk triggers, escalation protocols, communications strategies, and board oversight.
• Compliance deadlines: institutions above $250bn must fully comply by Jan 1, 2025, and those between $100–$250bn by Jan 1, 2026.

The updated Recovery Planning requirements obligated firms to upgrade their governance standards with more frequent board reviews and robust testing infrastructure. Additionally, banks with assets between $100-$250bn face new resources and operational stresses to build frameworks that meet the new enhanced standards.

In October 2025, the OCC proposed repealing the Recovery Planning requirements. In lieu of the Recovery Planning requirements, the OCC expects large financial institutions to have effective risk management processes that address all material risks in their operating environment and be resilient to a range of risks. 

The proposed repeal would go into effect for firms with more than $100bn of assets. The comment period remains open, and a final decision could pivot policy toward lighter recovery demands while reinforcing core resilience expectations. 

In August 2024, the Fed and the FDIC jointly provided "Living Will" guidance for large Bank Holding Companies (BHCs). The joint guidance for Category II/III BHCs ($250bn+ in assets, excluding GSIBs) resulted in triannual full “Living Will” submissions for impacted firms with a focus on capital, liquidity, governance, operational resilience, and entity separability, covering both single-point and multiple-point entry strategies. 

As a result, large BHCs must coordinate across subsidiaries and jurisdictions, enhance cross-functional governance, and allocate considerable planning resources. The original deadline was extended from March 31, 2025 to October 1, 2025, which provided some relief; however, demands on BHCs remain elevated.

Additionally, on October 1, 2024, the FDIC's Resolution Plan Rule for Covered Insured Depository Institutions (IDIs) was updated with the following developments:

• All IDIs with $100bn+ assets must submit full resolution plans; those with $50–$100bn submit informational filings.
• Plans are assessed on credibility; IDIs over $100bn need an “Identified Strategy,” while mid-tier banks have lighter requirements.
• Submission cycle: full plans every three years; supplemental filings in off years. 

The IDI rule change elevated the role of the resolution function, requiring cross-functional planning and testing, and may influence business structure and growth decisions.

In April 2025, the FDIC provided some Resolution Planning relief to IDIs. The FDIC waived certain content requirements—like mandatory bridge-bank modeling and hypothetical failure scenarios—for upcoming plan submissions. The FDIC emphasized focus on operational realism by ensuring banks can be resolved through forced sales or short-term operation ("weekend sale") rather than complex bridge-bank arrangements. 

1. Stricter → Streamlined: OCC and FDIC initially tightened recovery and resolution frameworks post 2023 but are now scaling back speculative components like bridge-bank planning.
2. Operational Readiness: Regulators emphasize realism and tested execution over theoretical models, focusing on what firms can do when stress strikes.
3. Governance & Testing: Across guidelines, banks must demonstrate robust governance oversight, early warning systems, and annual recovery/resolution strategy testing. 

Staying ahead of these shifting regulatory expectations will require disciplined oversight, proactive planning, and a commitment to credible execution. By strengthening governance, testing, and operational readiness today, institutions can position themselves for resilience amid an increasingly dynamic supervisory landscape.

Sia can partner with you to review your RRP program, with a particular focus on governance, operational readiness, testing, and resource planning. With our proprietary AI tools, our team of former prudential regulators and professionals with deep industry knowledge are available to handle your most complex questions and assess your capabilities in the ever-evolving RRP landscape.