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FDIC updates its enforcement actions manual

Agency Rule-Making & Guidance Federal Issues Bank Regulatory FDIC FDI Act Enforcement

Agency Rule-Making & Guidance

On July 25, the FDIC announced that it updated chapters its Formal and Informal Enforcement Actions Manual, entitled Overview and Administrative Matters and Cease-and-Desist Actions, respectively, regarding the agency’s minimum standards for terminating cease and desist and consent orders issued under Section 8(b) of the FDI Act. According to the FDIC, “the manual provides direction for professional staff related to the work necessary to pursue formal and informal enforcement actions,” and is “intended to support the work of the field, regional, and Washington office’s staff involved in processing and monitoring enforcement actions.” The FDIC is authorized to issue a cease-and-desist order if an insured depository institution has engaged, or is about to engage, in “an unsafe or unsound practice in conducting the business of the institution, or [a] violation of a law and/or regulation, written agreement with the FDIC, or written condition imposed by the FDIC in connection with the granting of any application or other request.” The updates, among other things, clarify that cease-and-desist or consent orders may be terminated if: (i) the institution is in full compliance with all provisions of the order and has fully corrected legal violations, unsafe or unsound practices, or other conditions that led to the issuance of the order; (ii) any provisions deemed “not in compliance” have become outdated or irrelevant; or (iii) deterioration or any provisions deemed “not in compliance” leads to issuance of a new or revised formal action.