Interagency Examiner Guidance for Assessing Safety and Soundness Considering the Effect of the COVID-19 Pandemic on Institutions

June 23, 2020 – Interagency guidance was provided to outline supervisory principles for assessing the safety and soundness of institutions given the ongoing impact of the COVID-19 pandemic.

FDIC and FRB also issued letters to financial institutions highlighting guidance provisions.

Instructs examiners to consider unique, evolving, possibly long-term issues that confront institutions due to COVID-19, and exercise appropriate flexibility in response.

Guidance Highlights
Examiners will continue to assess institutions according to existing policies and procedures. May provide supervisory feedback, or downgrade an institution’s composite or component ratings, when it is determined that their conditions have deteriorated.

Supervisory ratings will still be assigned according to the CAMELS and ROCA rating systems. Examiners are to consider whether an institution managed risk appropriately, including appropriate actions in response to stresses caused by COVID-19 impacts. Includes considerations for assigning composite, component CAMELS and ROCA ratings.

Consideration to be given to challenges involved in assessing risk, as well as the response by the institution in real-time given the available information, and the stage of local economic recovery.

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