With Fed’s final action on supervisory guidance, all agencies accounted for

A final rule that outlines and confirms the use of supervisory guidance for regulated institutions – and specifying that supervisory guidance does not have the force and effect of law – was announced Wednesday by the Federal Reserve Board.

The Fed was the lone holdout on a joint final rule, which four other agencies – the Consumer Financial Protection Bureau (CFPB) Federal Deposit Insurance Corp. (FDIC), National Credit Union Administration (NCUA), and Office of the Comptroller of the Currency (OCC) – announced in January. As long as it took for the Fed Board to act, it did so with unanimity on this final rule. The board approved the final rule March 25, the Fed’s website shows, with all six governors voting in favor of it.

The final rule generally codifies a statement issued in September 2018 clarifying the differences between regulations and guidance and is substantially similar to the proposal issued last year.

“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 Fed noted in its announcement Wednesday. “Rather, guidance outlines expectations and priorities, or articulates views regarding appropriate practices for a specific subject.”

The Fed’s final rule will take effect 30 days after publication in the Federal Register.

Federal Reserve Board adopts final rule outlining and confirming the use of supervisory guidance for regulated institutions

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