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Board Report: 2020-SR-B-006 March 18, 2020

The Board Can Enhance Certain Aspects of Its Enforcement Action Monitoring Practices

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The Board delegates to Reserve Banks the authority to supervise certain financial institutions in their Districts, with oversight by the Board. Significant supervisory concerns about an institution could lead to the use of various enforcement tools to compel its management to address the issues. We assessed the effectiveness of the Board's and the Reserve Banks' enforcement action monitoring practices.

The Reserve Banks in our sample have implemented some effective practices for monitoring enforcement actions. However, they use different information systems for monitoring enforcement actions against institutions in the community banking organization portfolio. Also, in certain instances, Reserve Bank staff did not post supervised institutions' progress reports describing their enforcement action remediation efforts to the required system of record.

Our report contains a recommendation designed to enhance the effectiveness of the Board's enforcement action monitoring practices.