In November 2025, the Office of the Comptroller of the Currency issued a Request for Information about how community banks engage with their core service providers. In March 2026, Comptroller Jonathan Gould described what came back as "concerns about the relationship" and a commercial dynamic that is "very uneven." This is unusual language from a federal banking regulator. It is worth understanding what it means for your next contract.
Federal regulators rarely characterize private-sector commercial relationships in this kind of plain language. When they do, it is generally a signal that supervisory attention is shifting. Banks navigating core processing renewals in 2026 and beyond should incorporate this regulatory context into their negotiation strategy — not as a threat to wave at vendors, but as a substantive change in the environment in which these contracts are now being signed.
What the RFI Was Actually About
The OCC's request was structured around how community banks select, contract with, and manage their relationships with core service providers — the companies that, between three of them, serve roughly seventy percent of U.S. banks. The questions covered contract terms, pricing transparency, switching costs, vendor responsiveness, and the practical ability of community banks to negotiate as commercial peers rather than as price takers.
The bankers who responded did not hold back. The themes that came through, per Comptroller Gould's public characterization, included contract complexity that is hard to interpret without specialized counsel, switching costs that effectively trap banks in suboptimal relationships, and pricing structures that do not survive comparison with what other institutions are paying for substantively identical services.
None of this is news to anyone who has worked in this space. What is new is the regulator saying it out loud.
What This Changes
The OCC has not, as of this writing, proposed new rules governing core processing contracts. The RFI was a fact-finding exercise, not the start of a rulemaking. So in the strict legal sense, nothing has changed.
In the practical sense, several things have changed.
First, the supervisory tone around these vendor relationships has shifted. Examiners now have visible cover from the top of the agency to ask sharper questions about vendor management, contract economics, and concentration risk. If your last exam did not include detailed questions about your core processing relationship, your next one likely will.
Second, the Interagency Guidance on Third-Party Relationships now reads with more weight. The expectations articulated in that guidance — meaningful due diligence, contractual provisions appropriate to risk, ongoing monitoring, exit planning — were always there. They are now more likely to be tested in exam.
Third, vendors know all of this. A vendor account team negotiating a contract in 2026 is operating with awareness that their own conduct is being characterized at the federal regulatory level as part of an "uneven" commercial dynamic. That awareness affects what they will and will not yield on at the table — and the change is generally to the bank's benefit.
How to Use the Regulatory Context in Your Negotiation
The wrong way to use this is to brandish it. "The OCC is concerned about your industry" is not an argument that moves a vendor, and the bank that opens with it sounds desperate.
The right way is to incorporate the substance into your negotiating posture.
The Interagency Guidance on Third-Party Relationships expects banks to have meaningful exit planning. Use that to negotiate cleaner deconversion terms — caps, defined scope, defined timelines. The framing is regulatory expectation, not adversarial demand. The vendor cannot reasonably push back against language that helps you meet supervisory standards.
The same guidance expects appropriate provisions around data security, confidentiality, and breach response. Use that to strengthen indemnification language and to broaden carve-outs from your liability cap. Again, regulatory framing.
Examiners will increasingly want documented evidence that your contract terms were negotiated against market benchmarks, not accepted as offered. Make sure your renewal file includes documented analysis — what comparable institutions are paying, where you yielded, where the vendor yielded, and why. This protects you in exam and gives you a clean paper trail if the contract ever needs to be re-examined.
What Banks Should Document
Three things, at minimum.
First, the analysis underlying your renewal decision. Why this vendor, why these terms, what alternatives were considered, what pricing benchmarks were applied. This file should exist before signature, not be reconstructed afterward.
Second, the negotiation history. Documentation of what was asked for, what was granted, what was denied, and the rationale. This material both demonstrates the diligence the guidance expects and creates institutional knowledge that survives staff turnover.
Third, the ongoing performance against contractual commitments. SLA performance. Pricing accuracy on monthly invoices. Responsiveness to issues. Build the muscle of regular vendor monitoring rather than treating the relationship as set-and-forget after signing.
The Bigger Pattern
The OCC's RFI is part of a broader regulatory and industry recognition that the dynamic between community banks and the small number of vendors who control their core operating platforms has become commercially imbalanced. This is not a partisan observation. It is consistent across regulators, across industry associations, and across the bankers who actually live in these contracts.
None of this means the relationship will fundamentally restructure overnight. The Big Three are not going away, switching costs remain real, and the operational risks of vendor change keep most banks at home most of the time. But the negotiation environment has shifted, and banks that incorporate the new context into their renewal strategies will negotiate better contracts than banks that pretend the regulatory weather has not changed.
The negotiation environment for core processing contracts has shifted. Your strategy should reflect that.
A 30-minute call. We'll talk through your renewal timeline and how the current regulatory context affects what you should be asking for.
Request a CallFrequently Asked Questions
Not as of this writing. The November 2025 action was a Request for Information, which is a fact-finding step rather than a rulemaking. Whether the agency proceeds to formal rulemaking remains to be seen. The supervisory tone, however, has clearly shifted, and that shift affects the negotiation environment regardless of whether new rules are formally proposed.
The OCC's jurisdiction is national banks, federal savings associations, and federal branches of foreign banks. Credit unions are regulated primarily by the NCUA. That said, the underlying market dynamics are nearly identical, and NCUA examiners are aware of the broader concerns. Credit unions should expect similar attention to vendor management practices, even if the formal regulatory pathway is different.
We don't recommend it. Vendor account teams will discount any argument that comes wrapped in regulatory invocation, treating it as posturing. The substance of the concerns — switching costs, contract complexity, pricing opacity — is more useful than the regulatory packaging. Make the substantive arguments. The regulatory backdrop will inform what the vendor is willing to yield without needing to be named.
No. Even if formal rulemaking proceeds, it will take eighteen to thirty-six months to produce binding requirements. Your contract is being negotiated in the current environment. The supervisory tone has already shifted; the practical leverage is available now. Waiting cedes that leverage in exchange for hypothetical future rules that may or may not materialize.
The guidance is principles-based rather than prescriptive, but in practice examiners look for: documented assessment of the institution's ability to transition to an alternative provider; identification and contractual cap of transition costs; clear data return rights and formats; and reasonable timelines specified in the contract. Most community bank core contracts do not currently meet this bar. Renewal is the moment to fix that.
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