Type of Action |
Description of Action |
| Informal Action |
Informal actions are voluntary commitments made by an insured financial institution’s board of directors. Such actions are designed to correct noted safety and soundness deficiencies or ensure compliance with federal and state banking laws. Informal actions are not legally enforceable and are undisclosed to the public. Informal action is generally appropriate for institutions that receive a composite rating of 3 for safety and soundness. |
| Bank Board Resolution |
A bank-generated document designed to address one or more specific concerns identified by examiners. It is an informal action and is not a binding legal document. |
| MOU |
A bilateral agreement seeking informal corrective action from institutions considered to have supervisory concerns but which have not deteriorated to the point at which they warrant formal action. An MOU is not a binding legal document. |
| Formal Action |
The purpose of a formal action is to correct noted safety and soundness deficiencies, ensure compliance with federal and state banking laws, and/or enforce removal proceedings. Formal actions are legally enforceable and available to the public after issuance. A formal action is generally initiated against an institution with a composite rating of 4 or 5 for safety and soundness. The FDIC can issue the following formal actions: termination of federal deposit insurance; C&D orders; removal, prohibition, and suspension actions; and civil money penalties. In addition, section 38 of the FDI Act authorizes the FDIC to issue prompt corrective action directives to undercapitalized institutions. |
| C&D Order |
A formal bilateral agreement signed by the bank’s board of directors and regulatory supervisor. Under the agreement, the supervisory agency may order an insured bank and its directors, officers, employees, and agents to cease and desist from certain practices and violations and take affirmative action to correct the resulting conditions. The failure of a bank to comply with a C&D order can be the basis for subsequent legal actions. |