Bank Regulatory Agencies Issue Statement Clarifying the Role of Supervisory Guidance

September 17, 2018
Financial Regulation Reform Tracker

The FRB, the OCC, the FDIC, the NCUA and the CFPB issued a statement on September 11, 2018, clarifying that supervisory guidance does not have the force and effect of law and that the agencies do not take enforcement actions based on supervisory guidance. The agencies stated that they intend to limit the use of numerical thresholds or other “bright lines” in describing expectations in supervisory guidance and that, where numerical thresholds are used, they are intended to be exemplary only and not suggestive of requirements. One area that particularly bears watching is the impact of the statement on the Leveraged Lending Guidance issued by the agencies in 2013, which includes a bright line threshold relating to borrower leverage.

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