For several years leading up to 2025, many FDIC-supervised institutions described the consumer compliance supervisory environment as particularly challenging. From their perspective, frequent examinations, a low threshold for citing fair lending issues, high volumes of cited violations, and a perception of inconsistency across examination teams created significant compliance burden — especially for community and regional banks.
The landscape appears to be changing. In late 2025, the FDIC implemented important updates to its Consumer Compliance Examination Manual that reflect a more risk-based, efficient, and transparent approach. These changes, combined with new leadership in the Office of the Ombudsman, signal a deliberate recalibration.
Key Changes in the Current Environment
The most significant shift is in examination frequency and intensity. Institutions are now generally placed into one of three risk-tiered cycles:
- 66–78 months
- 54–66 months
- 24–36 months (for institutions with elevated risk profiles)
For banks on the longer cycles, examiners conduct mid-point risk analyses rather than defaulting to full-scope routine examinations. This is designed to reduce unnecessary burden on well-managed institutions while still allowing targeted intervention where risk warrants it.
Fair lending supervision has also been refined. The FDIC updated its examination procedures to evaluate potential discrimination under the Equal Credit Opportunity Act and Fair Housing Act solely on disparate treatment.
These adjustments have occurred in concert with strong overall regulatory performance among institutions: as of year-end 2025, 98% of FDIC-supervised institutions were rated satisfactory or better for consumer compliance, and the same percentage were Outstanding or Satisfactory for CRA.
New Leadership in the Office of the Ombudsman
On September 26, 2025, the FDIC appointed Dan Marcotte as Director of the Office of the Ombudsman. Marcotte is a 35-year FDIC veteran who previously served as Chicago Regional Ombudsman since 2014 and as Acting Ombudsman beginning in May 2025.
His background is particularly relevant. As a long-tenured Regional Ombudsman, he brings deep experience helping banks and examiners resolve friction constructively and confidentially. He holds an MBA from Bentley College and is a certified Organizational Ombudsman Practitioner through the International Ombudsman Association.
Marcotte’s appointment suggest several signals:
- Continuity and credibility in the independent Ombudsman function.
- A preference for early dialogue, clarification of expectations, and informal resolution of issues before they escalate.
- Support for a supervisory culture that is firm on risk but more collaborative and transparent with well-run institutions.
- Recognition that an experienced internal leader is best positioned to serve as a credible bridge between banks and the agency during a period of supervisory recalibration.
What This Means for Banks
The combination of longer examination cycles, a narrowed fair lending focus, and an experienced Ombudsman creates a more manageable environment for institutions that maintain strong compliance management systems. However, it does not eliminate risk. If things go as planned, banks with elevated risk profiles, weaker management systems, or emerging issues will still face appropriate scrutiny.
The Office of the Ombudsman remains a valuable, low-risk resource. The 2025 Annual Report emphasizes calling early — while issues are still preliminary — and highlights the office’s role in clarifying expectations, resolving friction, and identifying trends.
Takeaways
- Review your institution’s current consumer compliance and CRA examination cycle and understand the mid-point risk analysis process.
- Ensure your fair lending monitoring and testing programs are aligned with the current disparate-treatment focus.
- Consider the Ombudsman as a confidential sounding board for examination-related concerns, especially when guidance appears unclear or inconsistent.
- Use the Post-Examination Survey (now administered by the Ombudsman) as a structured channel for candid feedback — and don’t hesitate to request follow-up if issues warrant it.
The FDIC’s stated purpose is to make the consumer compliance environment in 2026 more efficient, more transparent, and more collaborative than it was just a year or two ago — while still maintaining strong expectations for safety, soundness, and consumer protection.
Important Caveats
Institutions that stay proactive, maintain robust compliance management systems, and engage constructively with examiners and the Ombudsman will be well positioned in this evolving landscape.
It is important to note, however, that these changes are more about trusting banks to manage their compliance risk with less intrusive oversight than a reduction in regulatory requirements. The longer exam cycle in particular suggests that banks will have to be more proactive and diligent and keep up with the ebbs and flows of examination priorities on their own, as they will likely have less contact and access to examiners. This creates an opportunity for banks that are “regulatory self-starters”, but potentially pitfalls for those who are not. This will require discipline and focus not to procrastinate when action should be taken.
In short, the FDIC’s recent changes should ease supervisory burden for those banks with a robust CMS, but they also place greater responsibility on institutions to monitor compliance risk proactively and stay aligned with evolving examination priorities.
