Key Takeaways
- • The OCC issued updated Bulletin 2025-45 on December 5, 2025, rescinding prior guidance (Bulletin 2023-34) to clarify its supervisory approach to venture lending by national banks and federal savings associations.
- • The updated guidance explicitly reflects the OCC's policy of not discouraging banks from engaging in prudent venture lending activities, shifting toward a more permissive regulatory posture on early-stage, expansion-stage, and late-stage company financing.
- • Banks remain responsible for ensuring venture loans align with risk appetite, are maintained within established risk limits, properly documented and underwritten, accurately risk-rated, and sufficiently reserved given the inherently higher default probability of early-stage ventures.
- • Venture loans are defined as commercial loans to companies in early, expansion, or late stages of corporate development, often characterized by pre-revenue or cash-flow-constrained businesses with elevated failure risk compared to traditional commercial lending.
- • The bulletin applies to all OCC-regulated banks, including community banks, and emphasizes heightened supervisory expectations around risk management practices proportional to the elevated uncertainty and default risk inherent in venture lending.
Summary
The Office of the Comptroller of the Currency released Bulletin 2025-45 on December 5, 2025, providing updated supervisory guidance on venture lending to early-stage, expansion-stage, and late-stage companies. The bulletin rescinds OCC Bulletin 2023-34 and applies to all national banks, federal savings associations, and federal branches and agencies regulated by the OCC, including community banks.
The updated guidance marks a material shift in regulatory posture. Rather than discouraging prudent venture lending activities, the OCC's stated policy now emphasizes transparency into supervisory approaches and reaffirms that banks may engage in venture lending consistent with their risk management frameworks and risk appetite. This represents a clarification of existing law and regulations rather than a substantive regulatory change, though the explicit policy of "not discouraging" venture lending signals regulatory openness to this asset class.
The OCC defines venture loans as commercial loans to companies in early, expansion, or late stages of corporate development. These loans frequently involve pre-revenue or early-revenue businesses and are characterized by heightened uncertainty and elevated probability of failure relative to traditional commercial lending. The bulletin acknowledges that venture loans carry substantially higher default risk, a factor that should be reflected in banks' underwriting, risk-rating, and loan loss reserve practices.
Responsibility for prudent venture lending rests with each bank's board and management, who must ensure that venture loans are maintained within established risk limits, appropriately documented and underwritten, accurately risk-rated according to their elevated risk profile, and supported by adequate loan loss reserves. The OCC emphasizes that heightened uncertainty and higher failure probability associated with new business ventures necessitate correspondingly rigorous risk management practices, supervisory attention, and capital allocation discipline.
The bulletin provides background information on venture lending, describes associated risks, and discusses prudent risk management practices for financial institutions considering or actively engaged in this lending category. The guidance applies uniformly across the OCC-regulated banking system, establishing baseline supervisory expectations for venture credit activities.
The updated guidance marks a material shift in regulatory posture. Rather than discouraging prudent venture lending activities, the OCC's stated policy now emphasizes transparency into supervisory approaches and reaffirms that banks may engage in venture lending consistent with their risk management frameworks and risk appetite. This represents a clarification of existing law and regulations rather than a substantive regulatory change, though the explicit policy of "not discouraging" venture lending signals regulatory openness to this asset class.
The OCC defines venture loans as commercial loans to companies in early, expansion, or late stages of corporate development. These loans frequently involve pre-revenue or early-revenue businesses and are characterized by heightened uncertainty and elevated probability of failure relative to traditional commercial lending. The bulletin acknowledges that venture loans carry substantially higher default risk, a factor that should be reflected in banks' underwriting, risk-rating, and loan loss reserve practices.
Responsibility for prudent venture lending rests with each bank's board and management, who must ensure that venture loans are maintained within established risk limits, appropriately documented and underwritten, accurately risk-rated according to their elevated risk profile, and supported by adequate loan loss reserves. The OCC emphasizes that heightened uncertainty and higher failure probability associated with new business ventures necessitate correspondingly rigorous risk management practices, supervisory attention, and capital allocation discipline.
The bulletin provides background information on venture lending, describes associated risks, and discusses prudent risk management practices for financial institutions considering or actively engaged in this lending category. The guidance applies uniformly across the OCC-regulated banking system, establishing baseline supervisory expectations for venture credit activities.
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