The Federal Reserve recently issued a statement announcing the adoption of a new final rule that outlines and confirms the use of supervisory guidance for regulated institutions. The final rule was based on a statement from September of 2018 that clarified the difference between regulations and guidance.

Supervisory guidance, unlike laws and regulations, holds less force and are not able to lead to enforcement actions from the agencies. Guidelines simply outline expectations and priorities or provide views on appropriate practices. Examiners may continue to reference guidance to provide examples of safe-and-sound conduct, appropriate protection and risk management, and other actions addressing compliance.

This rule will become effective on April, 30th 2021 and you can read full statement of this new rule here.

Sincerely,

Sarah Smith, CRCM, CAFP