Agencies Affirm: No Enforcement Actions Based on Guidance

In an important joint statement issued today, the financial regulatory agencies clarified the role of supervisory guidance in bank supervision, noting that it “does not have the force and effect of law.” Regulators from the Federal Reserve, FDIC, OCC, Consumer Financial Protection Bureau and the National Credit Union Administration affirmed that supervisory guidance is intended to outline expectations and general views regarding appropriate practices for a given subject area, and that they would not pursue enforcement actions based on it.

The agencies highlighted additional ongoing efforts to clarify policies and practices related to supervisory guidance. Specifically, they said they would: limit the use of numerical thresholds or bright-lines when outlining expectations in supervisory guidance; not criticize institutions for “violations” of supervisory guidance; strive to reduce the issuance of multiple guidance documents; and continue working to clarify the role of supervisory guidance in communications with exam teams and supervised institutions. They also noted that seeking public comment on guidance does not signal that the guidance is intended to have the force and effect of a regulation or law.

The American Bankers Association welcomed the announcement. “We appreciate this effort by regulators to ensure that both banks and examiners have a clear understanding of the appropriate role of guidance in bank supervision,” said ABA EVP Wayne Abernathy. “Bankers over the years have raised numerous concerns about the application of guidance in the examination process, and we view this as a positive step towards providing greater clarity.”