Regulators have said supervisory guidance is not a proper basis for an enforcement action
Two banking groups have petitioned banking agencies and the Consumer Financial Protection Bureau for a formal rulemaking regarding the use of supervisory guidance.
In September, the CFPB joined the Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, National Credit Union Administration, and Office of the Comptroller of the Currency in an interagency statement clarifying that supervisory guidance does not have the force and effect of law, and is not a proper basis for an enforcement action.
Now, the Bank Policy Institute (BPI) and American Bankers Association (ABA) are asking regulators to formalize the statement in the form of a binding regulation to ensure it endures over time and is followed consistently across the country.
“We commend your agency for issuing the interagency statement, which is an important step forward in ensuring that agency guidance is issued and applied in a manner consistent with the APA and the Congressional Review Act and, more broadly, that formal examination criticisms focus on matters material to the financial condition of a bank. Despite the helpful text of the interagency statement, we are concerned that it may nevertheless leave room for examiners to continue to base examination criticisms on matters not based in law,” the two groups said in their petition.
BPI and ABA said that a formal rulemaking would be an explicit recognition by the agencies that current and future examiners will be bound by the statement which will provide greater clarity to the examination process.
