On January 19th the CFPB and other financial regulators issued a new final rule codifying the prior issued statement on the role of supervisory guidance. The CFPB acted together with the Federal Reserve, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, and the National Credit Union Administration. The rule codifies a joint statement issued by the Agencies in 2018. DocMagic previously wrote about the agencies’ joint statement on the role of supervisory guidance here.
The rule makes a distinction between regulations and rules which create binding legal obligations and supervisory guidance that is issued by an agency to “advise the public prospectively of the manner in which the agency proposes to exercise a discretionary power”. In short, it relates to how the agency will interpret a provision in their practical applications such as examinations, based on current information, staff and internal policies. Supervisory guidance may include examples of practices that mitigate risks, or their expectations and priorities in enforcement.
The rule has not yet been published in the Federal Register and may be impacted by the Biden Administration’s recently freeze on publishing new rules. The rule is otherwise effective 30 days after publication in the Federal Register.
