Federal Agencies Reaffirm Role of Supervisory Guidance

The FRB, BCFP, FDIC, NCUA, and OCC issued a statement confirming that supervisory guidance does not have the force and effect of law and that the agencies will not take enforcement actions based on supervisory guidance.

The agencies issued the statement to explain the role of and describe the approach to supervisory guidance.  The agencies explained that supervisory guidance was meant to outline the agencies’ general views regarding appropriate practices, expectations, and priorities.  Further, the statement clarified that the agencies: (1) intend to limit the use of numerical thresholds or other bright-lines in describing expectations in supervisory guidelines; (2) will not criticize a supervised financial institution for a violation of supervisory guidelines;  (3) may continue to seek public comment on supervisory guidance; (4) will aim to reduce the issuance of multiple supervisory guidance documents on the same topic; and (5) will continue efforts to make the role of supervisory guidance clear in their communications to examiners and to supervised financial institutions.