Supervisory Actions

In most instances, regulators have considerable discretion about which supervisory actions to pursue. However, in a limited number of circumstances, such as certain capital deficiencies, the law requires regulators to take specified formal supervisory actions.

Supervisory actions fall into two categories: formal actions and informal actions. Formal actions are public, while informal actions are not.

  Formal Actions Informal Actions
When are they used?

Formal actions are used to address practices that are unlawful, unsafe or unsound.

Informal actions are used when a bank’s overall condition is sound, but it is necessary to obtain written commitments from a bank’s board of directors to ensure that identified concerns will be corrected.

Examples

Formal actions include:

  • Cease and desist orders
  • Prompt corrective action directives
  • Safety and soundness orders
  • Capital directives
  • Removal and prohibition orders
  • Civil money penalties
  • Written agreements

Informal actions include:

  • Memoranda of understanding (MOU)
  • Board resolutions
  • Commitments