The American Bankers Association submitted a comment letter on Monday supporting a proposed rule by the federal banking regulators to codify and clarify their 2018 interagency statement on supervisory guidance. In proposing this rule, the regulators granted much of a November 2018 joint petition filed by ABA and the Bank Policy Institute. The ABA-BPI joint petition sought this formal rulemaking to ensure that banking organizations would not need to rely on the interagency statement to clarify the role of guidance.
ABA supported key clarifications included in the proposal, such as affirming that examiners will not base supervisory criticisms, including the issuance of MRAs, on a “violation” of or “non-compliance” with supervisory guidance. It also raised concerns about aspects of the joint petition that were denied; for example, in the proposal, the agencies decided not to base supervisory criticism solely on violations of statute, regulation, order or a demonstrably unsafe and unsound practice.
The letter also pressed the regulators to avoid circumstances that might lead banking organizations to perceive that guidance has a binding effect, such as providing guidance alongside supervisory criticism on the same topic. The association added that “we also argue that interpretive rules should be within the scope of this proposal since there is no practical way for banks to differentiate agency issuances that are supervisory guidance and those that are interpretive rules.”