Guidance Is Nice. Sure…But Do We Have To Follow It?

by Anthony Demangone

Chances are, most members of a credit union’s executive team did not come up the ranks of the credit union’s compliance or audit teams.

Thoughts of the Code of Federal Regulations or legal citations might give you chills.  While that may be, I’d bet that you still respect the fact that there are rules to be followed.

But that begs the question.  Are all rules the same?  More specifically, what should we do with guidance? Regulatory guidance is all of the “stuff” that regulators issue that tells you what you “should” do.  Legal opinion letters.  Letters to credit unions.  The Bank Secrecy Act manual.

That “stuff” is not law.  It is not regulation.  So what exactly are you to do with it?

Enter the Bank Lawyer’s Blog, written by Kevin Funnell. Kevin is a man I respect, and he is even more snarky than me on occasion.  He wrote about the difference between regulation and guidance recently, and it should be required reading for credit union managers.

Kevin first quotes an FDIC official who helped write the FFIEC’s proposed guidance on social media. The official was quick to point out that guidance is not mandatory.

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