FRB Modifies Guidance on Supervisory Practices

The Federal Reserve Board ("FRB") offered adjustments to its supervisory approach during the COVID-19 outbreak.

The FRB issued prior related guidance (see here and here) to financial institutions recommending that they (i) include pandemic planning in their business continuity plans, and (ii) "exercise judgment" when considering COVID-19-related loan modifications.

In its new "Statement on Supervisory Activities," the FRB highlighted:

• continuing to monitor the effects of COVID-19 to understand the impact on firm operations and financial conditions;

• reducing its focus on examinations and inspections by (i) generally ceasing all examination activity for supervised institutions with total consolidated assets that are less than $100 billion, (ii) ensuring that any examinations that are deemed necessary take place "off-site," and (iii) reassessing its approach to examinations in April;

• requiring firms to submit their capital plans in relation to their Comprehensive Capital Analysis and Review ("CCAR") by April 6, 2020, and using the plans to understand how firms manage their capital during the COVID-19 outbreak;

• prolonging the time periods for addressing existing supervisory findings by 90 days; and

• encouraging covered financial institutions to consult with their respective Reserve Bank and state banking agencies regarding supervisory activities.