NCUA Board Adopts Proposed Rule Clarifying Use of Guidance in Enforcement Actions
NCUA Chairman Rodney Hood says the proposed rule “clarifies that supervisory guidance alone is not enforceable.”
The NCUA board approved a proposed rule Wednesday that would make it clear that the agency will not take action against a credit union solely based on administrative guidance.
The other banking regulators already have approved publishing the proposed rule, which now will be open for public comment. The NCUA board adopted it during a special meeting Wednesday.
The rule would codify a 2018 policy statement issued by bank and credit union regulators that attempted to assure banks, credit unions and other financial businesses that supervisory guidance does not carry the force of law.
After that policy statement was released, the American Bankers Association and the Bank Policy Institute petitioned their regulators, asking that the statement be codified, Scott Neat, the NCUA’s associate director in the Office of Examination and Insurance told the board. The NCUA was not included in that petition, Neat said.
However, he said all the agencies that issued the policy statement agreed to consider the proposed rule.
NCUA Chairman Rodney Hood said the proposed rule “clarifies that supervisory guidance alone is not enforceable.”
Board member Todd Harper said the proposed rule confirms “that the agencies will continue to respect administrative law.”
“We should in all instances tie our administrative actions, in an objective and fair-minded manner, to specific provisions of the Federal Credit Union Act, final agency regulation or judicial holdings,” Board Member J. Mark McWatters added.
Hood said there had been confusion about whether the NCUA already had adopted the proposed rule. The FDIC circulated the proposal last week, listing the NCUA as one of the agencies involved.
Neat said the proposed rule had been on the board’s regularly scheduled Oct. 15 meeting, but was pulled from the agenda because it was not clear whether the other banking regulators had adopted it.
CUNA officials have said they support the proposed rule.
A key House Republican had been pushing the agencies to draw a clear distinction between supervisory guidance and rules.
Rep. Blaine Luetkemeyer (R-Mo.), ranking Republican on the House Consumer Protection and Financial Institutions Subcommittee, introduced legislation in 2018 clearly specifying the difference between the two.
“For too long, regulators sidestepped Congress and used guidance as a tool to inappropriately force private industry to behave in a way that appeased the ideals of bureaucrats,” said Luetkemeyer, a former Missouri state banking regulator whose family owns community banks.