US Regulators Finalize Definitions for Unsafe Banking Practices
US bank regulators have finalized rules defining 'unsafe and unsound' practices, giving examiners clearer guidance for the first time.
Two major U.S. banking regulators have finalized new rules that formally define what constitutes "unsafe and unsound" practices by banks. The Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) announced the move on Thursday, marking the first time a bank regulator has established formal definitions for such activities.
The rules, first proposed in October, are designed to give government examiners firm guidelines on how to police lenders. In a joint statement, the agencies said the new definitions will provide "clarity and certainty" during bank examinations.
The move comes as the Trump administration pushes to overhaul how the government supervises banks. Regulatory heads have argued that examiners should refocus on core financial risks rather than penalizing lenders for minor issues.
The Federal Reserve, which also supervises banks and oversees some of the nation's largest institutions, has not yet issued its own proposal defining such activities.