American Financial Services Association

Federal Banking Agencies Issue Final Rules on Supervisory Guidance

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Federal Banking Agencies Issue Final Rules on Supervisory Guidance

This week, the Consumer Financial Protection Bureau, Federal Deposit Insurance Corporation, National Credit Union Administration, and the Office of the Comptroller of the Currency issued final rules clarifying the role of supervisory guidance. Supervisory guidance is issued by agencies in the form of (but not limited to) interagency statements, advisories, bulletins, policy statements, questions and answers, and frequently asked questions.

The final rule adopts language from the proposed rulemaking which reiterates the agencies’ adherence to administrative law and their recognition that “unlike a law or regulation, supervisory guidance does not have the force and effect of law.”

Previously, the American Financial Services Association (AFSA) submitted comments in support of the proposed rule. Specifically, AFSA asked the agencies to include enforcement actions in the category of supervisory guidance. While the agencies did not broaden the definition of supervisory guidance, the final rule outlines the agencies intention to ”not issue an enforcement action on the basis of a ‘violation’ of or ‘non-compliance’ with supervisory guidance.”

However, the possibility exists that this recent rulemaking will be rescinded. The Biden Administration is expected to be more active in pursuing enforcement actions against financial institutions. President Biden has recently announced his nominees to head several regulatory agencies including the CFPB and is likely to soon name his choice to lead the OCC.

January 21st, 2021 by