On January 19, 2021, several major federal financial regulators finalized rules clarifying the legal status of supervisory guidance.  As we described in a client alert late last year, a number of federal financial regulatory agencies—the Federal Deposit Insurance Corporation (“FDIC”), the Federal Reserve, the Office of the Comptroller of the Currency (“OCC”), the National Credit Union Administration (“NCUA”), and the Consumer Financial Protection Bureau (“Bureau”)—had been considering proposed rules that would largely codify the 2018 Interagency Statement Clarifying the Role of Supervisory Guidance (which we previously covered in this blog post).
Continue Reading Federal Agencies Release Final Rule Clarifying the Role of Supervisory Guidance

Today, March 26, the Board of Governors of the Federal Reserve System, the Consumer Financial Protection Bureau, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Office of the Comptroller of the Currency released an interagency statement encouraging financial institutions to offer responsible small-dollar loans to both consumers and small businesses facing

On Sunday, March 22, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration, the Office of the Comptroller of the Currency, the Consumer Financial Protection Bureau, and the Conference of State Bank Supervisors released an Interagency Statement encouraging financial institutions to work with borrowers affected

On October 17, 2019, the Board of Governors of the Federal Reserve System, Office of the Comptroller of the Currency, Federal Deposit Insurance Corporation, and National Credit Union Administration released for public comment a proposed interagency policy statement on allowances for credit losses (“ACLs”).  The proposed policy statement reflects the Financial Accounting Standards Board’s adoption of the current expected credit losses (“CECL”) methodology.

Continue Reading Agencies Propose CECL Policy Statement

On December 3, 2018, the Board of Governors of the Federal Reserve System (“Federal Reserve), the Federal Deposit Insurance Corporation (“FDIC”), the Financial Crimes Enforcement Network (“FinCEN”), the National Credit Union Administration (“NCUA”), and the Office of the Comptroller of the Currency (“OCC”) (collectively, “agencies”) released a joint statement on innovative efforts to combat money laundering and terrorist financing.

In the joint statement, the agencies encouraged banks to consider and, if appropriate, responsibly implement innovative approaches with respect to their anti-money laundering (“AML”) and Bank Secrecy Act (“BSA”) compliance obligations. In particular, the agencies discussed innovative internal financial intelligence units that may be tasked with “identifying complex and strategic illicit finance vulnerability and threats.” The agencies also discussed artificial intelligence and digital identity technologies and recognized the value of these innovative approaches in strengthening banks’ BSA/AML compliance programs, as well as potentially reducing compliance costs.


Continue Reading Financial Agencies Release Joint Statement on Innovative Efforts to Combat Money Laundering and Terrorist Financing

On Tuesday October 2, leaders of the federal prudential regulators testified before the Senate Committee on Banking, Housing, and Urban Affairs (“Banking Committee”) on their agencies’ efforts to implement the Economic Growth, Regulatory Relief, and Consumer Protection Act (“EGRRCPA” or the “Act”). All of the regulators expressed support for the goals of EGRRCPA, particularly with respect to tailoring regulations, and highlighted the steps being taken to implement the law.

The witnesses at the hearing were: Joseph Otting, Comptroller, Office of the Comptroller of the Currency (“OCC”); Randal Quarles, Vice Chairman for Supervision, Board of Governors of the Federal Reserve System (“FRB”); Jelena McWilliams, Chairman, Federal Deposit Insurance Corporation (“FDIC”); and J. Mark McWatters, Chairman, National Credit Union Administration (“NCUA”).

This post summarizes below, as highlighted in the witnesses’ testimony:

  • some of the key steps these agencies have taken to implement the Act, which include the release of a number of proposed and interim final rules; and
  • the steps the agencies intend to take next, including tailoring enhanced prudential standards for larger bank holding companies (“BHCs”).


Continue Reading After Senate Banking Committee Testimony, Where Does Dodd-Frank Reform Stand?

On September 11, 2018, the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the National Credit Union Administration, and the Bureau of Consumer Financial Protection (the “Bureau”, and, collectively, the “Agencies”) issued a statement “clarifying the role of supervisory guidance.” The release affirms that the Agencies “do not take enforcement actions based on supervisory guidance” and that such guidance “does not have the force and effect of law.” This statement continues a recent pattern in regulatory policy of downplaying the force of guidance documents, at least as they relate to enforcement actions.

The statement explains that, rather than create binding rules with the force and effect of law, guidance “outlines supervisory expectations or priorities” and/or provides examples of practices the Agencies consider acceptable under applicable legal standards, such as safety and soundness standards. Further, the Agencies state that guidance is often issued in part as a response to requests from supervised institutions to “provide insight to industry” and help “ensure consistency in the supervisory approach.”


Continue Reading Banking Regulators Issue Joint Policy Statement Downplaying the Role of Supervisory Guidance in Enforcement

The Financial Accounting Standards Board (“FASB”) will hold an open meeting on June 12, 2017, to hear concerns from financial institutions regarding FASB’s recently finalized Accounting Standards Update for measuring credit losses on financial instruments (the Current Expected Credit Loss standard, or “CECL”) under Generally Accepted Accounting Principles (“GAAP”).

FASB issued the new CECL standard