Agencies Update Policy on Cooperation in Enforcement Actions

The federal banking agencies are issuing a revised policy on interagency cooperation in enforcement action that reflects present-day practice at the respective agencies. The new policy calls for each agency to notify any other prudential regulator “at the earliest practicable date” should the enforcement action involve the interests of the other agency.

“If it is determined that one or more other [federal banking agencies] have an interest in the enforcement action, the FBA proposing the enforcement action should notify the other FBA(s),” the new statement says. “Notification should be provided at the earlier of the FBA’s written notification to the federally insured depository institution, depository institution holding company, non-bank affiliate, or institution-affiliated party against which the FBA is considering an enforcement action or when the appropriate responsible agency official, or group of officials, determines that formal enforcement action is expected to be taken.”

The policy statement replaces a 1997 statement that required formal written notice. In a statement rescinding that notice, the agencies noted that the earlier statement does not reflect today’s prevalence of electronic communication and that the new statement reflects the agencies’ existing practices.