When Things Go Wrong

Many examination findings can be addressed by bank management through routine follow-up to the examination report. However, some concerns are of such a serious or repetitive nature, or their correction is beyond the abilities of bank management, that bank regulators are compelled to take more formal action than just addressing the issues in an examination report. These actions are referred to as supervisory or enforcement actions.

This section describes the range of supervisory actions that regulators may take to address problems or deficiencies at a bank. These actions may be taken against the bank, bank management, directors, employees or institution-affiliated parties. Additionally, this section discusses general approaches you might take to help ensure your bank’s compliance with a supervisory action.

Learning Objectives

After you complete this lesson, you should be able to:

  • differentiate between informal and formal supervisory actions;
  • recognize the role of the board of directors in addressing deficiencies or problems at the bank; and
  • identify potential ramifications of noncompliance with a supervisory action.