ICBA - Publications - FDIC Clarifies Guidance on Sarbanes-Oxley

FDIC Clarifies Guidance on Sarbanes-Oxley

JULY 18, 2003


FDIC Clarifies Guidance On Sarbanes-Oxley

FDIC chairman Don Powell has written to ICBA to clarify the agency's position on how the Sarbanes-Oxley Act impacts small, privately held banks. Attaching a memorandum to FDIC regional directors, Powell said the clarification was needed due to "confusion and concern over enforcement of perceived different standards among banking regulators." The FDIC's original guidance (FIL-17-2003), which was issued before guidance from the three other bank regulators, appeared to adopt a higher corporate governance standard.

The memo to regional directors says the FRB, OCC and OTS guidance "differs in language, but not in substance" from the FDIC guidance. The memo specifically states, "FIL-17-2003 does not establish any new mandates for non-public institutions with total assets of less than $500 million." FDIC-insured institutions are expected to continue to follow sound corporate governance practices based on existing law, regulations and guidelines.

Banks are encouraged to periodically review their policies and procedures relating to corporate governance and auditing matters "to ensure they are consistent with applicable law and regulations, and are appropriate to the institution's size, operations, and resources," the memo says. "As always, examiners should exercise sound judgment and good common sense when evaluating management's decisions," the memo concludes.