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BOARD OF GOVERNORS

OF THE

FEDERAL RESERVE SYSTEM

WASHINGTON, D.C. 20551

DIVISION OF SUPERVISION

AND REGULATION

DIVISION OF CONSUMER AND

COMMUNITY AFFAIRS

 SR 21-4/CA 21-2

 February 26, 2021

TO THE OFFICER IN CHARGE OF SUPERVISION AT EACH FEDERAL RESERVE 

BANK AND TO FINANCIAL INSTITUTIONS SUPERVISED BY THE FEDERAL 

RESERVE

SUBJECT: Inactive or Revised SR Letters Related to the Federal Reserve’s Supervisory

Expectations for a Firm’s Boards of Directors

Applicability: This guidance applies to domestic bank and savings and loan holding companies 

(including insurance and commercial savings and loan holding companies), regardless of asset 

size.

The purpose of this letter is to present the results of the Federal Reserve’s review of 

supervisory expectations for boards of directors1 of bank and savings and loan holding 

companies (hereafter referred to as “firm”) that are presented in certain existing Supervision 

and Regulation and Consumer Affairs letters (“SR/CA letters”). The purpose of the initiative 

was to review and revise, as appropriate, supervisory views on boards of directors for all 

domestic bank holding companies and savings and loan holding companies contained in 

certain existing Supervision and Regulation (SR) and Consumer Affairs (CA) letters to better 

align with the Board’s supervisory framework. 

The review identified supervisory expectations for boards of directors that may not 

align with their core responsibilities.

2

 The review also identified supervisory expectations that 

did not clearly distinguish responsibilities of a firm’s board from those of the firm’s senior 

management. The results of the review and accompanying revisions to or rescissions of 

Federal Reserve guidance are discussed in more detail below.3

1 The terms “board” or “board of directors” also refer to committees of the board of directors, as appropriate.

2 Refer to SR letter 21-3/CA letter 21-1, “Supervisory Guidance on Board of Directors’ Effectiveness,” (board 

effectiveness guidance).

3 This review focused on supervisory expectations for boards of directors. The Board periodically reviews existing

guidance it issues for accuracy and relevance. See, for example SR letter 16-9, “Inactive Supervisory Guidance.” In 

subsequent guidance reviews, the Federal Reserve will assess language on supervisory expectations for boards of 

directors for alignment with SR letter 18-5/CA letter 18-7, “Interagency Statement Clarifying the Role of 

Supervisory Guidance.”
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Review Results

In reviewing the supervisory letters, the Federal Reserve identified 27 SR/CA letters 

for potential elimination or revision. The Federal Reserve considered whether it would be 

appropriate to either revise those expectations to better align with the attributes of effective 

boards set forth in the board effectiveness guidance or SR letter 16-11, “Supervisory Guidance 

for Assessing Risk Management at Supervised Institutions with Total Consolidated Assets 

Less than $100 Billion.” In some cases, the review indicated that a letter should be made 

inactive as the letter was no longer used in the supervisory process.

After seeking public comment on the review of these 27 SR/CA letters as part of the 

proposal on the “Board Effectiveness Guidance,”4 the Board decided to revise twelve letters, 

make inactive nine letters, and retain six letters without change. The attachment sets forth the 

disposition of the letters that were revised or made inactive. While the revisions to the 12 SR/CA

letters align the board effectiveness guidance and SR letter 16-11, the Federal Reserve did not 

make any other changes to these letters.

To the extent that the content of a revised or inactive letter appears in the Bank 

Holding Company Supervision Manual or Commercial Bank Examination Manual, the Federal 

Reserve intends to revise the manual content at a later date. In the meantime, firms are not 

expected to rely on the manuals for board expectations, and the Federal Reserve does not 

intend to refer to the board expectations included in the manuals in conducting a supervisory 

assessment of a firm’s governance and controls. 

Reserve Banks are asked to distribute this letter to the appropriate supervised institutions 

in their districts, as well as to supervisory and examination staff. In addition, supervised 

institutions may send questions regarding the guidance via the Board’s public website.5

Michael S. Gibson Eric S. Belsky

 Director Director

 Division of Supervision Division of Consumer and

 and Regulation Community Affairs

Attachment

• Table with Results of Supervisory Letter Review

Cross references

• SR letter 21-3/CA letter 21-1, “Supervisory Guidance on Board of Directors’ 

Effectiveness”

• SR letter 16-11, “Supervisory Guidance for Assessing Risk Management at Supervised 

Institutions with Total Consolidated Assets Less than $100 Billion”

4 See https://www.federalreserve.gov/newsevents/pressreleases/bcreg20180104a.htm

5 See http://www.federalreserve.gov/apps/contactus/feedback.aspx.
Attachment to SR 21-4/CA 21-2 February 26, 2021

Table with Results of Supervisory Letter Review

Letters in Which Guidance on the Roles and Responsibilities

For Boards of Directors of Holding Companies

Have Been Made Inactive, Revised, or Retained

SR/CA

letter No.

Title Disposition1 Comment Institution Applicability 

SR 16-17 Supervisory Expectations 

for Risk Management of 

Reserve-Based Energy 

Lending Risk

Retained without 

change

Expectations related to the responsibilities of 

the board of directors in this letter are 

consistent with the board effectiveness 

guidance and SR letter 16-11.

Activities based. State member banks, 

U.S. branches and agencies of foreign 

banking organizations, and depository 

institution holding companies and 

nonbank subsidiaries of such holding 

companies involved in energy lending.

SR 14-8 Consolidated Recovery 

Planning for Certain 

Large Domestic Bank 

Holding Companies

Retained without 

change

Expectations related to the responsibilities of 

board of directors in this letter are consistent 

with the board effectiveness guidance.

Eight domestic bank holding companies 

that may pose elevated risk to U.S. 

financial stability.2

SR 13-19 / 

CA 13-21

Guidance on Managing

Outsourcing Risk

Content revised Expectations related to the responsibilities of 

board of directors in this letter were revised to 

be consistent with the board effectiveness

guidance and SR letter 16-11.

All financial institutions supervised by the 

Federal Reserve.

1

 “Content revised” means that the expectations relating to boards of directors contained in the letter have been revised to better align with either the final board 

effectiveness guidance in SR letter 21-3/CA letter 21-1, “Supervisory Guidance on Board of Directors’ Effectiveness,” (final board effectiveness guidance) and

SR letter 16-11, “Supervisory Guidance for Assessing Risk Management at Supervised Institutions with Total Consolidated Assets Less than $100 Billion.” The 

letters are otherwise unchanged. “Retain without change” means that the supervisory expectations for boards of directors described in the letter are consistent 

with the final board effectiveness guidance and SR letter 16-11. “Made inactive” means the supervisory letter, in its entirety, was no longer relevant to the 

Federal Reserve’s current supervision because it contained guidance that was outdated, unnecessary, or redundant. Relevant elements of supervisory letters 

which are made inactive may be retained in the Commercial Bank Examination Manual (CBEM) or the Bank Holding Company Supervision Manual. 

2

 See footnote 1 to SR letter 14-8, “Consolidated Recovery Planning for Certain Large Domestic Bank Holding Companies,” for the list of eight domestic bank 

holding companies that may pose elevated risk to U.S. financial stability.
SR/CA

letter No.

Title Disposition1 Comment Institution Applicability 

SR 13-13 / 

CA 13-10

Supervisory

Considerations for the 

Communication of

Supervisory Findings

Retained without 

change

The Board continues to consider comments to the 

proposed supervisory communications guidance and

therefore is not adopting guidance to replace SR 

letter 13-13/CA 13-10 at this time.

SR 13-13/CA 13-10 applies to all financial 

institutions supervised by the Federal Reserve.

SR 12-17 / 

CA 12-14

Consolidated Supervision 

Framework for Large 

Institutions

Retained without 

change

Expectations related to the responsibilities of board 

of directors in this letter are consistent with the 

board effectiveness guidance. 

SR 12-17/CA 12-14 remains applicable to: 

• Large Institution Supervision 

Coordinating Committee (LISCC) firms;

• Domestic bank and savings and loan 

holding companies with consolidated assets of 

$50 billion or more that are not included in the 

LISCC portfolio; and 

• Foreign banking organizations with 

combined assets of U.S. operations of $50 

billion or more that are not included in the 

LISCC portfolio.

SR 11-15 Disposal of Problem 

Assets through 

Exchanges

Content revised Expectations related to the responsibilities of board 

of directors in this letter were revised to be 

consistent with the board effectiveness guidance and 

SR letter 16-11.

Activities based. All state member banks, bank 

holding companies, and their nonbank 

subsidiaries, and savings and loan holding 

companies that engage in asset exchange 

transactions.

SR 11-14 Supervisory Expectations 

for Risk Management of 

Agricultural Credit Risk

Content revised Expectations related to the responsibilities of board 

of directors in this letter were revised to be 

consistent with the board effectiveness guidance and 

SR letter 16-11.

Activities based. All financial institutions 

supervised by the Federal Reserve with 

significant exposure to agriculture-related credit 

risk.

SR 09-4 Applying Supervisory 

Guidance and 

Regulations on the 

Payment of Dividends, 

Stock Redemptions, and 

Stock Repurchases at 

Bank Holding 

Companies

Retained without 

change

Expectations related to the responsibilities of board 

of directors in this letter are consistent with the 

board effectiveness guidance and SR letter 16-11.

Bank and savings and loan holding companies 

with less than $50 billion in assets. 
SR/CA

letter No.

Title Disposition1 Comment Institution Applicability 

SR 08-9 / 

CA 08-12

Consolidated Supervision 

of Bank Holding 

Companies and the 

Combined U.S. 

Operations of Foreign 

Banking Organizations

Retained without 

change

Expectations related to the responsibilities of board 

of directors in this letter are consistent with the 

board effectiveness guidance and SR letter 16-11. 

Attachment A.2 applies to regional banking 

organizations. 

SR 08-8 / 

CA 08-11

Compliance Risk 

Management Programs 

and Oversight at Large 

Banking Organizations 

with Complex 

Compliance Profiles

Content revised Expectations related to the responsibilities of board 

of directors were revised to be consistent with the 

board effectiveness guidance. 

Applies to banking organizations with $50 

billion or more in total consolidated and have 

multiple legal entities. Extended to appropriate 

savings and loan holding companies per SR 

letter 14-9. 

SR 01-13 Supervisory Guidance 

Relating to a Change to 

Permissible Securities 

Activities of State 

Member Banks

Made inactive Outdated guidance. Refer to the Commercial Bank 

Examination Manual for information on securities 

activities. Expectations related to the responsibilities 

of board of directors will be revised in the 

Commercial Bank Examination Manual consistent 

with the board effectiveness guidance and SR letter 

16-11.

Activities based. State member banks meeting 

certain criteria as described in the GrammLeach-Bliley Act.

SR 01-8 Supervisory Guidance on 

Complex Wholesale 

Borrowings

Made inactive Outdated guidance. Refer to the Trading and Capital 

Markets Activities Manual sections on Liquidity 

Risk and Interest-Rate Risk Management; SR letter 

10-6, “Interagency Policy Statement on Funding and 

Liquidity Risk Management,” and Regulation YY, 

as relevant.

Not applicable. 

SR 00-9 Supervisory Guidance on 

Equity Investment and 

Merchant Banking 

Activities

Content revised Expectations related to the responsibilities of board 

of directors in this letter were revised to be 

consistent with the board effectiveness guidance and 

SR letter 16-11.

Activities based. Applies to equity investment 

activities of bank holding companies, state 

member banks, and their subsidiaries and 

affiliates— regardless of the statutory or 

regulatory authority under which investments 

are made. Extended to savings and loan holding 

companies per SR letter 14-9.
SR/CA

letter No.

Title Disposition1 Comment Institution Applicability 

SR 99-7 Supervisory Guidance 

Regarding the Investment 

of Fiduciary Assets in 

Mutual Funds and 

Potential Conflicts of 

Interest

Content revised Expectations related to the responsibilities of board 

of directors in this letter were revised to be 

consistent with the board effectiveness guidance and 

SR letter 16-11.

Activities based. Domestic and foreign banking 

organizations with asset and wealth 

management activities supervised by the Federal 

Reserve.

SR 98-25 Sound Credit Risk 

Management and the Use 

of Internal Credit Risk 

Ratings at Large Banking 

Organizations

Content revised Expectations related to the responsibilities of board 

of directors in this letter were revised to be 

consistent with the board effectiveness guidance and 

SR letter16-11.

The letter notes that the guidance applies to 

“large and complex banking organizations.” 

Extended to savings and loan holding 

companies per SR letter 14-9.

SR 98-18 Lending Standards for 

Commercial Loans

Made inactive Outdated guidance. Activities based.

SR 98-9 Assessment of 

Information Technology 

in the Risk-Focused 

Frameworks for the 

Supervision of 

Community Banks and 

Large Complex Banking 

Organizations

Content revised Expectations related to the responsibilities of board 

of directors in this letter were revised to be 

consistent with the board effectiveness guidance and 

SR letter 16-11.

State member banks, bank holding companies, 

and foreign banking organizations. Extended to 

savings and loan holding companies as per SR 

letter 14-9. 

SR 97-25 Risk-Focused 

Framework for the 

Supervision of 

Community Banks

Made inactive Outdated guidance. Refer to the Commercial Bank 

Examination Manual for information on the 

supervisory framework of community banks.

SR letter 97-25 applies to community banks.
SR/CA

letter No.

Title Disposition1 Comment Institution Applicability 

SR 97-24 Risk-Focused 

Framework for 

Supervision of Large 

Complex Institutions

Made inactive Outdated guidance. Refer to the Bank Holding 

Company Supervision Manual for information on 

the supervisory framework of banks and holding 

companies in the regional and large and foreign 

banking supervision portfolios.

SR letter 97-24 applies to large complex 

institutions are defined as those that generally 

have a functional management structure; abroad 

array of products, services, and activities; 

operations that span multiple supervisory 

jurisdictions; and consolidated assets of $1 

billion or more. These institutions may be 

domestic or foreign in origin, and include U.S. 

bank holding companies (together with their 

nonbank and foreign subsidiaries), state member 

banks, Edge Act and agreement corporations, 

and branches and agencies of foreign banks. 

SR 97-21 Risk Management and 

Capital Adequacy of 

Exposures Arising from 

Secondary Market Credit 

Activities

Made inactive The letter will be made inactive and the expectations 

related to the responsibilities of board of directors 

will be revised in the Bank Holding Company 

Supervision Manual to be consistent with the board 

effectiveness guidance and SR letter 16-11. 

Activities based. Institutions supervised by the 

Federal Reserve that conduct secondary market 

credit activities. Extended to savings and loan 

holding companies per SR letter 14-9

SR 97-3 Conversion of Common 

Trust Funds to Mutual 

Funds

Content revised Expectations related to the responsibilities of board 

of directors in this letter were revised to be 

consistent with the board effectiveness guidance and 

SR letter 16-11.

Activities based. State member banks and bank 

holding companies. Extended to savings and 

loan holding companies per SR letter 14-9.

SR 96-10 Risk-Focused Fiduciary 

Examinations

Content revised Expectations related to the responsibilities of board 

of directors in this letter were revised to be 

consistent with the board effectiveness guidance and 

SR letter 16-11.

Activities based. Institutions supervised by the 

Federal Reserve that conduct asset and wealth 

management activities. Extended to savings and 

loan holding companies per SR letter 14-9.

SR 95-51 Rating the Adequacy of 

Risk Management 

Processes and Internal 

Controls at State Member 

Banks and Bank Holding 

Companies

Content revised Expectations related to the responsibilities of board 

of directors in this letter were revised to be 

consistent with the board effectiveness guidance.

SR letter 95-51 applies to state member banks

and bank holding companies with consolidated 

assets of $100 billion or more.

3

 The Board is 

reviewing the existing guidance applicable to 

firms with total consolidated assets between $50 

billion and $100 billion.

3 See SR 21-3/CA letter 21-1, “Supervisory Guidance on Board of Directors’ Effectiveness” for more information regarding how the Federal Reserve will use the 

guidance to inform its supervision of firm practices.
SR/CA

letter No.

Title Disposition1 Comment Institution Applicability 

SR 94-53 Investment Adviser 

Activities

Content revised Expectations related to the responsibilities of board 

of directors in this letter were revised to be 

consistent with the board effectiveness guidance and 

SR letter 16-11

Activities based. Bank holding companies, state 

member banks, and state-licensed U.S. branches 

and agencies of foreign banks that provide 

investment advisory services to mutual funds or 

trust department common investment funds.

SR 93-69 Examining Risk 

Management and Internal 

Controls for Trading 

Activities of Banking 

Organizations

Made inactive Outdated guidance. SR letter 93-69 specifically targets trading, 

market making, and customer accommodation 

activities in cash and derivative instruments at 

State member banks, branches and agencies of 

foreign banks, and Edge corporations.

SR 90-22 Policy Statement on the 

Use of “Points” in 

Settling Foreign 

Exchange Contracts

Made inactive Outdated guidance. SR letter 90-22 is applicable to U.S. commercial 

bank, Edge or Agreement corporation, and 

branch, agency and commercial lending 

company associated with a foreign bank, subject 

to U.S. federal bank regulatory agencies' 

supervisory jurisdiction that deals in foreign 

exchange.

SR 90-16 Implementation of 

Examination Guidelines 

for the Review of Asset 

Securitization Activities

Made inactive Outdated guidance. Activities based.