US Federal Financial Regulatory Agencies Reaffirm the Role of Supervisory Guidance

The U.S. Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, National Credit Union Administration, Office of the Comptroller of the Currency and Bureau of Consumer Financial Protection issued an interagency statement explaining the role and legal status of supervisory guidance.  The statement highlights the difference between supervisory guidance on one hand, and laws and regulations on the other hand, noting that supervisory guidance, in all forms, does not have the force and effect of law, and that the agencies do not take enforcement actions based upon supervisory guidance. Instead, supervisory guidance outlines supervisory expectations or priorities, articulates general views regarding appropriate practices for a given subject area and can provide examples of practices that the agencies generally consider consistent with safety-and-soundness standards or other applicable laws and regulations.  The interagency statement also outlines ongoing steps that the regulatory agencies are taking to clarify the role of supervisory guidance, including, limiting the use of numerical thresholds or other “bright-lines” in describing expectations in supervisory guidance; not criticizing a supervised financial institution for a “violation” of supervisory guidance; seeking public comment with respect to supervisory guidance; limiting and reducing the issuance of multiple supervisory guidance documents addressing the same topic; maintaining clarity in communications to examiners and supervised financial institutions with respect to the role of supervisory guidance; and encouraging supervised financial institutions to raise and discuss any questions regarding supervisory guidance with their appropriate regulatory agency contact.

View full text of the interagency statement.