On September 8, 2025, the FDIC updated chapter four of its Formal and Informal Enforcement Actions Manual, entitled Cease-and-Desist Actions, regarding the agency’s minimum standards for terminating cease-and-desist and consent orders issued under Section 8(b) of the Federal Deposit Insurance Act. The manual provides direction for professional staff related to the work necessary to pursue formal and informal enforcement actions.
Section 8(b) of the FDI Act allows the FDIC to issue a cease-and-desist order, known as a “consent order” if there is evidence that an insured depository institution has engaged, or is about to engage, in a) unsafe or unsound business practices, or b) violations of laws, regulations, written agreements with the FDIC, or conditions set by the FDIC when granting any applications or requests. In 2022, the FDIC modified its procedures for terminating consent orders, wherein termination of an order is precluded under Section 8(b) unless the IDI was in full compliance with all provisions of the order.
The recent revision in the FDIC’s policy will allow greater discretion in terminating such orders. Specifically, section 8(b) cease and desist orders may be considered for termination under any of the following conditions:
The IDI has achieved at least substantial compliance with the order.
The order is no longer applicable to the IDI’s current circumstances, including situations in which the IDI is closed, self-liquidated, or merges.
Deterioration leads to the issuance of a new or revised formal action.
Read the FDIC’s announcement here.
The revised manual can be found here.