Comments on proposed guidelines issued Oct. 3 on corporate governance and risk management for insured depository institutions with total consolidated assets of $10 billion or more are due to the federal bank deposit insurance agency by Dec. 11, according to a notice in Friday’s Federal Register.
The proposed guidelines were issued by the Federal Deposit Insurance Corp. (FDIC) Board by notational vote Oct. 3. The proposal, the agency said, would apply to all insured state nonmember banks, state-licensed insured branches of foreign banks, and insured state savings associations that are subject to Section 39 (safety and soundness authority) of the Federal Deposit Insurance Act (FDI Act), with total consolidated assets of $10 billion or more on or after the effective date of the final guidelines.
“The FDIC observed during the 2008 financial crisis and more recent bank failures in 2023 that financial institutions with poor corporate governance and risk management practices were more likely to fail,” according to Friday’s notice. “Reports reviewing the recent 2023 bank failures noted that poor corporate governance and risk management practices were contributing factors.”
If finalized, the guidelines would be issued as Appendix C to the FDIC’s standards for safety and soundness regulations in part 364, pursuant to the FDI Act’s section 39, and would be enforceable under Section 39, the agency said.
The agency said it also proposes to make corresponding amendments to parts 308 and 364 of its regulations to implement the proposed guidelines.