A key supervisory practice of the banking regulators is the issuance of a “supervisory criticism” that directs a bank to take certain prescribed actions to address an identified problem or issue, including a:
- “Matter Requiring Attention” or MRA, which the bank must remediate; and
- “Matter Requiring Immediate Attention” or MRIA, which the bank must remediate on an urgent basis (MRIAs are only issued by the Federal Reserve).
This supervisory criticism process is not established in or required by law but instead has been created by the banking regulators over time. Thus, there are no prescribed penalties for the issuance of an MRA/MRIA or for the failure to remediate one. Read The 3 Letters at the Heart of Bank Supervision Dysfunction for more information on MRAs.
However, in practice, the explicit or implicit threat of enforcement action or ratings downgrade by examiners typically means that these types of supervisory criticisms are binding, such that banks must acquiesce with whatever examiners have demanded or else face serious repercussions.
