Closing the Series on the OCC’s RFI
Over the past eight installments, this series has examined every major dimension of the bank-provider relationship as framed by the OCC’s Request for Information (RFI): innovation barriers, stablecoin readiness, AI gaps, vendor evaluation, data ownership, interoperability, transparency, and regulatory burden. In this ninth and last article, I cover two topics that appear operational but actually have strategic significance: billing practices and industry dialogue. Finally, I reflect on the broader implications of the OCC RFI for the future of community banking.
The billing problem is bigger than it looks. Billing from core service providers (CSPs) and essential third-party vendors is not a back-office nuisance. It is a material operational burden that drains resources, obscures true costs, and erodes trust in provider relationships. Community and regional banks report that billing statements routinely span dozens or hundreds of pages, filled with cryptic codes, bundled line items, and variable pricing structures that defy easy interpretation. Reviewing these statements takes 10-20 staff hours each month at mid-sized institutions, a resource smaller banks often cannot spare from lending, compliance, or customer service.
The error rate compounds the problem. Industry feedback suggests that 20-40% of community banks identify billing inaccuracies in any given year, with errors averaging $1,000-$5,000 per incident. Over time, these errors add up. A bank experiencing quarterly errors of $2,500 is losing $10,000 annually before accounting for the staff time spent detecting, disputing, and resolving each discrepancy. In severe cases involving misapplied volume fees or unauthorized add-ons, the figures are significantly higher. The OCC RFI pointedly notes that billing is an inherent component of performing a bank service and may be subject to supervision, a signal that the OCC views this as more than an inconvenience.
What makes this particularly frustrating is that the solutions are not exotic. Standardized billing formats with plain-language descriptions, electronic dashboards for real-time verification, automated reconciliation tools, and enforceable error resolution SLAs would address the majority of complaints. The problem is not that better billing is technically difficult. It is that providers in a concentrated market face insufficient pressure to invest in it. When three CSPs serve 70% of the market, a bank’s threat to switch over billing issues carries little weight.
The OCC has several avenues to address billing practices. It should incorporate billing accuracy into joint interagency examinations, evaluating error prevalence and billing transparency under the Management and Support & Delivery components of provider URSIT ratings. Persistent errors should be treated as indicators of operational weakness because that is what they are. The agency should issue guidance on billing best practices, establishing expectations for simplified formats, itemized descriptions, and dispute resolution timelines. It should mandate billing audits through its Bank Service Company Act authority, requiring providers to report error metrics as part of examination cycles. And the proposed provider database should include billing complaint data, creating the reputational incentive that market concentration currently fails to provide.
The OCC’s RFI also proposes facilitating ad hoc or standing groups of banks, providers, fintechs, and other stakeholders to develop private market solutions. This model has proven effective through Project REACh, which has produced tangible results in expanding credit access and supporting minority depository institutions. Extending this collaborative framework to core provider challenges such as shared due diligence, standardized API protocols, billing reform, consortium-based conversions, all would accelerate solutions that no single bank or regulator can achieve alone. The key is sustained commitment and inclusive participation, ensuring smaller banks are not sidelined by larger voices.
Stepping back from the individual questions, this OCC’s RFI represents something significant. It is the most comprehensive regulatory acknowledgment to date that the community bank CSP relationship is structurally broken and that the consequences extend beyond individual institutions to the competitiveness of the community banking sector as a whole. The RFI does not just ask what is wrong. It proposes concrete mechanisms such as databases, registries, certifications, examination reforms, safe harbors, revived dialogues and asks stakeholders to pressure-test them.
The risk is that the RFI generates a record but not action. Community banks have voiced these concerns for years through trade group surveys, comment letters, and private conversations with examiners. What distinguishes this moment is the OCC’s apparent willingness to use its supervisory and regulatory authority not just to study the problem, but to intervene. The agency’s reminder in the RFI that provider services are subject to examination “to the same extent as if such services were being performed by a client bank itself on its own premises” is not boilerplate. It is a signal.
So, what is the bottom line? I believe we all can agree that community banking matters. These institutions serve the communities, small businesses, and local economies that large banks and fintechs often overlook. But community banks cannot fulfill that mission on outdated technology, locked behind opaque contracts, burdened by disproportionate oversight, and dependent on providers that treat them as an afterthought. The OCC’s RFI is the right conversation at the right time. What matters now is whether it leads to meaningful change for banks, for providers, and for the communities they both serve.
CCG Catalyst has been sharing our perspectives throughout these last 8 articles. We work with community and regional banks every day on the challenges this RFI addresses, vendor strategy, technology modernization, regulatory readiness, and competitive positioning. If your institution is navigating these issues, we are here to help. Reach out to our team at ccgcatalyst.com.
