November 30, 2020

Volume X, Number 335


Banking Agencies Issue Proposed Rule Addressing Role of Supervisory Guidance

On October 20, the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System, the Consumer Financial Protection Bureau (CFPB), and the National Credit Union Administration (each, a Banking Agency, and collectively, the Banking Agencies) published a proposed rule (the Proposed Rule) that would codify the Interagency Statement Clarifying the Role of Supervisory Guidance issued by the Banking Agencies on September 11, 2018 (the 2018 Statement). The 2018 Statement provided that regulatory guidance did not have the force and effect of law and did not create binding obligations on the public.

The Proposed Rule was issued in response to a petition for rulemaking that certain agencies received on November 5, 2018, pursuant to the Administrative Procedure Act requesting that such agencies codify the 2018 Statement. The petition argued that codification was necessary to bind future banking agency leadership.

The commentary to the Proposed Rule describes the distinction between “regulations” and “supervisory guidance,” noting that supervisory guidance is issued by an agency to “advise the public prospectively of the manner in which the agency proposes to exercise a discretionary power’” and provide transparency to ensure consistency in the Banking Agencies’ supervisory approaches. In addition, the Proposed Rule: (1) makes clear that Banking Agency examiners will not criticize or issue enforcement orders against institutions that fail to comply with supervisory guidance; (2) encourages the Banking Agencies to be specific in criticisms and findings; and (3) commits the Banking Agencies to attempting to reduce the issue of multiple duplicative guidance documents.

The comment period will close 60 days after publication of the Proposed Rule in the Federal Register.

More information is available here.

©2020 Katten Muchin Rosenman LLPNational Law Review, Volume X, Number 297



About this Author

Christina J. Grigorian, Banking legal Specialist, Katten Muchin Law firm
Special Counsel

Christina J. Grigorian counsels clients in all matters related to banks, bank holding companies, and state and foreign-licensed consumer and commercial lenders. Ms. Grigorian provides advice to the firm’s financial institution clients concerning structural and operational issues, including legislative developments impacting such operations, and has worked with companies and individuals in the establishment of de novo entities, including national banks, federal savings banks and state-chartered institutions, as well as state-licensed lenders. She has also counseled clients with respect to...