Summary highlights supervisory guidance proposal

(Nov. 13, 2020) NASCUS has posted a new summary of a proposal by federal financial institution regulators – including NCUA and CFPB – aimed at clarifying and codifying the role of supervisory guidance. The summary is available to members only.

Voting unanimously at a rare second monthly board meeting Oct. 28, the NCUA Board agreed to join the interagency proposal on the role of supervisory guidance issued by the agencies. Under the proposal, the meaning of “supervisory guidance” would be clarified as meaning, essentially, it doesn’t have the force of law.

If finalized, the proposal 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 is not the same as statute or regulation. “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.

But some in the financial services industry (most vocally, banks) wanted more than a statement. They developed a petition to the federal banking agencies and CFPB requesting that the statement be adopted by the agencies in the form of the rule. NCUA was not an initial target of the petition but, since the credit union regulator signed on to the original statement, it was obligated to consider signing on to the proposed rule.

When the board considered the proposal two weeks ago, staff asserted that it would not impose a burden on credit unions. That’s at least partially because, they said, the agency has followed the intent of the proposal for at least the last seven years. Staff pointed out that NCUA has, at least since 2013, tied all “documents of resolution” for credit unions to specific statutory and regulatory citations – a practice, the agency staff (and board members) vowed would not change under the proposed rule.

Comments on the proposal are due Jan. 4, following a 60-day comment period.

Summary — Interagency Proposed Rule re: Role of Supervisory Guidance