Given the ongoing coronavirus pandemic, the Fed’s renewed supervisory undertaking aims to conduct examination activities offsite until conditions improve.
The Federal Reserve Board has announced that it will resume examination activities for all financial institutions, including those with total consolidated assets of less than $100 billion. Having previously reduced its exam activity temporarily in light of COVID-19, the Fed now is of the opinion that "banks have had time to implement contingency operating plans and adapt their operations, so exam activity will resume." At the same time, the federal agency anticipates that examination activities, including full-scope examinations, "will be conducted offsite until conditions improve to facilitate on-site examinations." Further, the Fed will "continue to work with banks to understand any specific issues they may be facing."
In March 2020, in response to the initial economic impact of the coronavirus pandemic, the Fed communicated that it was focusing on "outreach and monitoring" measures, while reducing its examination activities—"with the greatest reduction for smaller banks."
Fed statement. The Fed emphasizes that examination activities contribute to the agency’s ability to "understand the safety and soundness of each institution" and to evaluate a firm’s compliance with laws and regulations, including those pertaining to consumer protection. Moreover, in its June 15, 2020, statement, the Fed recognizes that "the current situation is significantly affecting institutions and communities in different ways, through no fault of their own." Along these lines, the Fed recommends that supervised financial institutions "work directly with their Reserve Bank and state banking agencies, as applicable, if they have questions on planned supervisory activities."
MainStory: TopStory BankingFinance BankingOperations CommunityDevelopment Covid19 FederalReserveSystem FedTracker FinancialStability PrudentialRegulation StateBankingLaws
Interested in submitting an article?
Submit your information to us today!Learn More
Banking and Finance Law Daily: Breaking legal news at your fingertips
Sign up today for your free trial to this daily reporting service created by attorneys, for attorneys. Stay up to date on banking and finance legal matters with same-day coverage of breaking news, court decisions, legislation, and regulatory activity with easy access through email or mobile app.