TO THE OFFICER IN CHARGE OF SUPERVISION AT EACH FEDERAL RESERVE BANK
For many years, the Federal Reserve and the other federal financial
institutions supervisory agencies have been operating under two interagency
notification and coordination policy statements relating to enforcement actions issued
by the FFIEC in 1979 and 1984. These statements basically required that a banking
agency proposing to take a formal or informal enforcement action notify in writing
other federal banking authorities, and in some cases state bank supervisors, about its
proposed action and, to the extent necessary, coordinate the enforcement action.
Multiple written notifications were required at regional and Washington, D.C.
headquarters levels, and the 1979 policy statement contained a process for
coordinating enforcement matters among the federal banking agencies.
In 1996, pursuant to the requirements of section 303 of the Community
Development and Regulatory Improvement Act of 1994, an interagency task force
working under the auspices of the FFIEC was formed to review the agencies'
experience over the past several years with the policy statements, and to determine if
enhancements were needed. As a result of the review, a single revised policy
statement was considered by the agencies' representatives to the Council, and
published in the Federal Register on February 20, 1997. A copy of the new policy
statement is attached. Each of the federal financial institutions supervisory agencies
are now adopting the policy statement.
The revised policy statement establishes a uniform system of interagency
written notification for both formal and informal actions, and is designed to encourage
useful notification at the earliest time practicable by providing the following:
An important change in the revised policy statement is the designation of
a contact person or persons for the purposes of notification for both formal and
informal actions, and the elimination of duplicative notifications at regional and
headquarters offices. We expect that the designation of individuals responsible for
notifications about enforcement actions at the other federal banking agencies will
enhance our ability to coordinate enforcement matters of mutual interest.
For the purposes of the new interagency notification procedures
concerning formal and informal enforcement actions set forth in the revised policy
statement, Herbert A. Biern, Deputy Associate Director, Division of Banking
Supervision and Regulation, is the Board's designated official. Under Mr. Biern's
direction, the staff of the Enforcement Section of the Division of Banking Supervision
and Regulation will both send notifications to and receive notifications from the contact
persons at the other federal bank regulatory agencies. Reserve Banks will no longer
have to send or receive their own interagency notifications to their colleagues at the
regional offices of the other federal financial institutions supervisory agencies or,
where needed, to state bank supervisors. In coordination with the domestic and
foreign bank supervision staff of the Division, Enforcement Section staff will notify
appropriate members of your Reserve Bank's staff about any formal or informal
enforcement action that we are notified about by the FDIC, OCC, OTS, or NCUA
which may relate to a financial institution supervised by your Reserve Bank or an
institution-affiliated party associated with such an institution.
To facilitate the Federal Reserve's interagency notification responsibilities
concerning informal enforcement actions, we request that your staff notify Mr. Biern
whenever your Reserve Bank decides to take an informal action, such as a
memorandum of understanding, against a domestic or foreign banking organization,
and also to provide him with information concerning any affiliations or relationships the
banking organization that will be subject to the informal action may have with another
financial institution. Upon the receipt of notification from you about a proposed
informal enforcement action, Mr. Biern will coordinate the matter with Board and
Reserve Bank supervision staff and, where necessary, transmit a notification letter to
the designated contact person or persons at the other federal banking agency
supervising an affiliated bank or thrift.
It should be emphasized that the new revised policy statement principally
addresses the ministerial requirement to provide written notifications to other federal
and state bank supervisory authorities concerning informal and formal enforcement
actions. Under the guidelines set forth above, the written notification letters will be
the responsibility of the Division's Enforcement Section. The staffs of the Reserve
Banks should continue to coordinate any planned enforcement actions with their
colleagues at other regulatory agencies where there are mutual interests and to share
pertinent information and documents at the earliest practical time.
Questions regarding this policy statement or its implementation should be
directed to Mr. Biern, at (202) 452-2620.
Director
Policy Statement on Interagency Notification and Coordination of Enforcement Actions by the Federal Bank Regulatory Authorities
ACTIONS BY THE FEDERAL BANK REGULATORY AUTHORITIES
When there is an affiliation or other inter-institutional relationship, any
federal banking regulatory agency that proposes to take an informal enforcement
against any federally regulated financial institution or institution-affiliated party shall
notify in writing the other appropriate federal banking regulatory agencies and, where
appropriate, a state supervisory authority prior to or at the initiation of such action.
In the event that complementary action (e.g., action involving a bank and
its parent holding company, or a U.S. branch or agency and a foreign bank) is
considered appropriate by two or more federal banking regulatory agencies, the
preparation, processing, presentation, service, and follow-up of the enforcement action
shall be coordinated by the agencies directly involved. The purpose of these procedures is to encourage notification to appropriate federal and state bank regulatory authorities at the earliest practicable date. These procedures are not intended to preclude or forestall any federal banking regulatory agency from initiating an enforcement action alone and on a timely basis against an institution or institution-affiliated party for which it has primary supervisory jurisdiction.
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