The three federal banking agencies are changing how they handle the most sensitive information they collect during examinations, announcing a coordinated approach that gives supervised banks a direct role in flagging data they believe warrants extra protection.
The Federal Reserve, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency issued a joint statement outlining the new framework, which is designed to reduce the amount of highly sensitive material that examiners collect and store in the first place.
Why it matters: For institutions in the accounts receivable management industry that are supervised by, or do business with, regulated banks, the announcement signals a broader shift in how regulators think about the data they demand during exams. Examination requests have long been a source of friction, particularly when they involve network diagrams, penetration test results, and other materials that could cause serious damage if exposed. The agencies are now acknowledging that risk explicitly and building processes around it.
The details: Under the new approach, bank management will be responsible for identifying which requested documents and data should be treated as highly sensitive. The agencies cited several categories that may qualify, including technology and network diagrams, detailed penetration test results, technical details of specific IT control weaknesses, and succession planning documents.
Once information is flagged, examiners will discuss with management whether it meets the highly sensitive threshold and, if so, which protective measures to use. Options include on-site review, direct digital review from the bank’s own systems, and redacted or summarized versions of documents, along with additional safeguards for transmission and access. In some cases, redacted or summary documents may be accepted for the supervisory record, provided legal requirements are met.
The agencies also committed to notifying affected banks of a potential or confirmed material compromise of confidential supervisory information within 72 hours of having a reasonable basis to believe a breach occurred and determining which banks were affected.
Examiners will receive written guidance and training on the framework. At the start of examination activities, they will notify banks that management may flag sensitive materials, and they will explain how banks can escalate concerns about examiner determinations to their primary federal regulator.
The agencies noted the memorandum does not create any enforceable legal rights for banks or other parties.
The bottom line: Regulators are conceding that the examination process itself can be a source of data security risk, and they are handing banks a formal mechanism to push back on how their most sensitive information is collected and stored. How consistently examiners apply the new protocols in the field will determine whether the change reduces burden or simply adds another negotiation to the exam process.
