On August 6, the U.S. Senate Banking Committee sent a letter to the Fed’s Vice Chair for Supervision, Michelle Bowman, as well as Comptroller Jonathan Gould, and the FDIC’s Acting Chairman Travis Hill, urging them to address what it contends are shortcomings in the Matters Requiring Attention (MRAs) process as part of their review of the broader supervisory framework. MRAs are supervisory findings identified during bank examinations that highlight deficiencies or violations of law and which would require remediation.
The Committee noted MRAs could serve as valuable supervisory tools to mitigate issues and maintain financial stability; however, according to the letter, the lack of structure, uniformity and legal basis has led to inconsistencies in the MRA process among prudential regulators. According to the Committee, the OCC, the Fed, and the FDIC have each developed their own internal definitions and standards for issuing and resolving MRAs — resulting in fragmented interpretations that can confuse financial institutions regarding expectations, severity and regulatory consequences.
The Committee called for MRAs to be used judiciously — reserved for material risks and accompanied by legal grounding and clear expectations for banks — and urged regulators to be held accountable for their enforcement as a meaningful supervisory tool.
[View source.]
