Regulatory Agencies Withdraw Leveraged Lending Guidance

December 12, 2025 - 04:05

On December 8, the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) made a significant move by rescinding the 2013 Interagency Guidance on Leveraged Lending, along with the accompanying FAQs issued in 2014. This decision marks a pivotal change in the regulatory landscape surrounding leveraged lending practices.

The agencies indicated that the withdrawal of this guidance is intended to provide banks with greater flexibility in their lending activities, particularly in the context of evolving market conditions. By eliminating the previous restrictions, the OCC and FDIC aim to encourage financial institutions to engage more actively in leveraged lending, which can be a crucial source of capital for businesses.

Industry experts anticipate that this shift could lead to an increase in leveraged loan issuance, potentially stimulating economic growth. However, it also raises concerns about the risks associated with higher levels of debt and the implications for financial stability. As the market adapts to this regulatory change, stakeholders will be closely monitoring its impact on lending practices and overall economic conditions.