Fed to Adjust Exam Activities As It Focuses on Coronavirus Response

The Federal Reserve will “temporarily reduce” its bank examination activities as it pivots to focus on responding to the immediate challenges posed by the coronavirus, the agency said in a statement tonight. All regular examination activity will be suspended until at least the last week in April at institutions with less than $100 billion in total consolidated assets, the Fed said, “except where the examination work is critical to safety and soundness or consumer protection, or is required to address an urgent or immediate need.”

For larger institutions with more than $100 billion in assets, the Fed will defer “a significant portion” of planned examination activity. However, firms required to submit plans under the Comprehensive Capital Analysis and Review exercise should still submit their capital plans by April 6.

The Fed will also grant institutions an additional 90 days to remediate existing supervisory findings, except under specific circumstances where “more timely remediation would aid the firm in addressing a heightened risk or help consumers.” Additionally the agency reminded banks of previous guidance stating that banks who work constructively with borrowers facing challenges due to the virus will not be subject to regulatory criticism.

During this protracted period of uncertainty, bank supervisors will be directed to increase their focus on monitoring bank activity, specifically bank operations, capital, liquidity, asset quality and the effects of the virus on consumers. For large banks, supervisors will also monitor operational resiliency and the risks to overall financial stability, the Fed said.