UPDATED: FDIC Board, others, finalize rules codifying role of supervisory guidance as not having force of law

A new rule codifying that supervisory guidance does not have the force of law, and that enforcement actions are not based on the guidance, was finalized Tuesday by the federal insurer of bank deposits.

Three other federal financial institution regulators also announced Tuesday they had finalized the rule.

The final rule approved by the Federal Deposit Insurance Corp. (FDIC) Board takes effect in 30 days after publication in the Federal Register. It only affects FDIC-insured financial institutions; it is not a joint rulemaking with other federal financial institution regulators, the FDIC said.

In approving the final rule, the agency board noted that supervisory guidance does not create binding, enforceable legal obligations; that the agency does not issue supervisory criticisms (which includes, in the FDIC’s case, matters requiring board attention (MRBAs)) for “violations” of or “non-compliance” with supervisory guidance; and describes the appropriate use of supervisory guidance.

The final rule, the agency added, codifies a 2018 interagency statement on the role of supervisory guidance that was intended to clarify the differences between regulations and guidance. The final rule also states that the statement is binding on the agency.

“Unlike a law or regulation, supervisory guidance does not have the force and effect of law, and the FDIC does not take enforcement actions based on supervisory guidance,” the agency said in a release. “Rather, supervisory guidance outlines the FDIC’s supervisory expectations or priorities and articulates the FDIC’s general views regarding appropriate practices for a given subject area.”

In separate actions, the Consumer Financial Protection Bureau (CFPB), National Credit Union Administration (NCUA) and the Office of the Comptroller of the Currency (OCC) all announced later Tuesday that they, too, had approved the final rule, which had been issued jointly by those agencies, the FDIC and the Federal Reserve. The Fed has yet announced approval of a final rule.

FDIC Approves Rule on the Role of Supervisory Guidance

OCC Approves Final Rule on Supervisory Guidance

Consumer Financial Protection Bureau Issues Final Rule on the Role of Supervisory Guidance