news.cuna.org/articles/114830-supervisory-guidance-is-not-law-says-regulator-statement

Supervisory guidance is not law, says regulator statement

September 11, 2018

Supervisory guidance does not have the force and effect of law, NCUA and other federal financial regulatory agencies said Tuesday in a joint statement. CUNA supports this unified approach from regulators.

The statement comes from the Bureau of Consumer Financial Protection, Federal Reserve Board, Federal Deposit Insurance Corp. and Office of the Comptroller of the Currency, in addition to NCUA.

“Unlike a law 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 statement reads. “Rather, supervisory guidance outlines the agencies’ supervisory expectations or priorities and articulates the agencies’ general views regarding appropriate practices for a given subject area.”

The statement also notes:

  • The agencies intend to limit the use of numerical thresholds or other “bright-lines” in describing expectations in supervisory guidance;
  • Examiners will not criticize a supervised financial institution for a “violation” of supervisory guidance. Rather, any citations will be for violations of law, regulation, or non-compliance with enforcement orders or other enforceable conditions;
  • The agencies also have at times sought, and may continue to seek, public comment on supervisory guidance. Seeking public comment on supervisory guidance does not mean that the guidance is intended to be a regulation or have the force and effect of law;
  • The agencies will aim to reduce the issuance of multiple supervisory guidance documents on the same topic and will generally limit such multiple issuances going forward; and
  • The agencies will continue efforts to make the role of supervisory guidance clear in their communications to examiners and to supervised financial institutions, and encourage supervised institutions with questions about this statement or any applicable supervisory guidance to discuss the questions with their appropriate agency contact.