Agencies issue proposed rule on guidance; NCUA to follow

The role of “supervisory guidance” would be clarified as meaning it doesn’t have the force of law in a proposed rule issued this week by federal banking regulators, CFPB and, soon, NCUA.

The FDIC, Federal Reserve, OCC, CFPB and NCUA are all listed on the proposal, which was issued for a 60-day comment period by the FDIC Board at its open meeting this week. The proposed rule, according to its summary, would codify an interagency statement issued by all of the agencies in September 2018. That statement was intended to make clear that, unlike a statute or regulation, supervisory guidance does not have the force and effect of law. “Supervisory guidance does not have the force and effect of law, and the agencies do not take enforcement actions based on supervisory guidance,” the 2018 statement read.

However, apparently the statement was not enough for some. The American Bankers Association (along with the Bank Policy Institute), filed a petition in 2018 with the banking agencies and CFPB (but not NCUA) calling on them to institutionalize the statement by codifying it in a formal rulemaking. Specifically, according to ABA, the bankers’ groups urged their regulators to clarify that matters requiring attention, matters requiring immediate attention and other such supervisory actions may only be based on a violation of statute or regulation, and not on a failure to comply with supervisory guidance.

This week, the ABA said the proposed rule “codifying” the statement was in response to their petition.

Late Thursday, the NCUA Board scheduled a meeting for next week (Wednesday, Oct. 28 at 2 p.m.) to consider its own rule on “supervisory guidance” (even though the agency was already listed on the proposal issued by the FDIC and the other agencies).

Last week, Chairman Rodney Hood opened the board’s October meeting by announcing the members had agreed to remove from the agenda a proposed “request for information” regarding supervisory guidance review and “improvements in communications.” No reason was given for the removal of the agenda item.

FDIC Proposed Rule on The Role of Supervisory Guidance: