NCUA, federal regulators clarify role of supervisory guidance

Sept. 11, 2018 -- NCUA Tuesday joined the Federal Reserve Board, the Bureau of Consumer Financial Protection (BCFP), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC) in releasing a statement explaining the role of supervisory guidance and describing the agencies’ approach to supervisory guidance.

In the statement, the agencies make a clear distinction between laws and regulations and supervisory guidance. The statement notes that “unlike a law or regulation, supervisory guidance does not have the force and effect of law.” The agencies further state they will not take enforcement actions based on supervisory guidance but will use the guidance to outline the agencies’ supervisory expectations or priorities and articulate their general views regarding appropriate practices for a given subject area.

The financial regulators also clarified the following policies and practices related to supervisory

  • The agencies will limit the use of numerical thresholds or other “bright-lines” in
  • describing expectations in supervisory guidance;
  • Financial institutions will not be penalized for supervisory guidance;
  • The agencies will seek comments on supervisory guidance;
  • The agencies will limit the number supervisory guidance on the same topic; and 
  • The agencies will reiterate the role of supervisory guidance to examiners and institutions.

Agencies Issue Statement Reaffirming the Role of Supervisory Guidance