WASHINGTON — Five financial regulators issued a proposed rulemaking to weaken the authority of supervisory guidance, codifying an announcement from 2018 that declared that guidance does not carry the force of law.
Thursday’s rulemaking,
“Unlike a law or regulation, supervisory guidance does not have the force and effect of law and the agencies do not take enforcement actions or issue supervisory criticisms based on non-compliance with supervisory guidance,” the agencies said in a joint press release. “Rather, supervisory guidance outlines supervisory expectations and priorities, or articulates views regarding appropriate practices for a given subject area.”
The regulation builds off guidance from
The more formal rulemaking proposal, with public feedback due 60 days after being published in the Federal Register, codifies that position and addresses some lingering concerns from the banking industry.
Shortly after the so-called guidance on guidance was published, the American Bankers Association and the Bank Policy Institute
Thursday’s filing from the five financial regulators acknowledges the petition and its concerns from the ABA and the Bank Policy Institute several times, writing that “the agencies reiterate that examiners will not base supervisory criticisms on a ‘violation’ of or ‘non-compliance with’ supervisory guidance.”
Regulators also stressed the value of guidance in certain instances, writing that “in some situations, examiners may reference (including in writing) supervisory guidance to provide examples of safe and sound conduct, appropriate consumer protection and risk management practices, and other actions for addressing compliance with laws or regulations.”