Agencies Propose Rule on Supervisory Guidance

The OCC, Federal Reserve Board ("FRB"), FDIC, National Credit Union Administration ("NCUA") and CFPB (collectively, the "Agencies") proposed a rule that would codify a 2018 Interagency Statement Clarifying the Role of Supervisory Guidance (the "2018 Statement"). In the proposed rule, the Agencies reiterate the administrative law restrictions applicable to the execution of their supervisory duties.

The proposed rule follows from a Petition for a Rulemaking on the Role of Supervisory Guidance by the American Bankers Association et al. which requested that the Agencies (i) address ambiguities regarding the role of supervisory guidance in matters requiring attention and matters requiring immediate attention (collectively, "MRAs") and (ii) restrict the issuance of MRAs to circumstances involving "the violation of a statute, regulation, or order, or demonstrably unsafe or unsound practices."

The Agencies, among other things, clarified in the proposed rule that:

  • the 2018 Statement covers the issuance of MRAs, as well as other "supervisory criticisms" communicated through matters requiring board attention and supervisory recommendations;
  • supervisory criticisms and enforcement actions will not be issued on the basis of a "violation" of or "non-compliance" with supervisory guidance; and
  • supervisory guidance may be referenced by examiners as "examples of safe and sound conduct, appropriate consumer protection and risk management practices."

Comments on the proposal are due 60 days after its publication in the Federal Register.

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