On 10/29/2020, the joint regulators (OCC, CFPB, FDIC, Federal Reserve, and NCUA) issued a proposal outlining the agencies’ use of supervisory guidance for supervision of regulated financial institutions. This proposal would formalize the joint agencies’ prior September 2018 statement that clarified the differences between regulations and guidance.
In the CFPB’s release, it was explained that supervisory guidance does not have the force and effect of a law, unlike a law or regulation, and the agencies do not take enforcement actions or issue supervisory criticisms based on non-compliance with supervisory guidance. Rather, supervisory guidance outlines supervisory expectations and priorities, or articulates views regarding appropriate practices for a given subject area. Alternatively, regulations do have the force and effect of law and enforcement actions can be taken if regulated institutions are in violation. Regulations are also generally required to go through the notice and comment process, where supervisory guidance is not.
Comments are due 60 days after publication in the Federal Register.
The CFPB’s version of the proposed rule can be found here.
