Banking Agencies Issue Statement on Enforcement Coordination

The Office of the Comptroller of the Currency, the FDIC and the Board of Governors of the Federal Reserve System (“Agencies”) issued an updated policy statement on coordination among the federal banking agencies during formal enforcement actions. The text of the statement was published in the Federal Register. The statement reflects the recent rescission of the Federal Financial Institutions Examination Council’s Revised Policy Statement on “Interagency Coordination of Formal Corrective Action by the Federal Bank Regulatory Agencies.”

The new statement outlines how a federal banking agency should proceed after deciding to take a formal enforcement action against any federally insured depository institution, depository institution holding company, non-bank affiliate or institution-affiliated party. According to the statement, each agency should first evaluate if the enforcement action relates to any areas that are regulated by other agencies. If it is determined that another agency has an interest in the enforcement action, then the agency proposing to take the action should notify the relevant agency (i) before notifying the party to the action or (ii) when the appropriate official determines that a formal action is expected to be taken. An agency should also share information with the other agency that will enable it to investigate the party.

Additionally, two or more agencies that plan to bring a complementary action are expected to coordinate on the preparation, processing, presentation, potential penalties, service and follow-up of the enforcement action.