Federal Deposit Insurance Corporation updates enforcement manual to broaden discretion to terminate Section 8(b) cease and desist and consent orders

The Federal Deposit Insurance Corporation has updated Chapter 4 of its Formal and Informal Enforcement Actions Manual to revise 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 update moves away from the post-2022 approach that generally precluded termination unless an insured depository institution was in full compliance with all provisions of an order. Under the revised standards, a Section 8(b) cease-and-desist order may be considered for termination when the institution has achieved at least substantial compliance, when the order is no longer applicable to the institution’s current circumstances including where the institution is closed, self-liquidated, or merges, or when deterioration results in the issuance of a new or revised formal action. The guidance, issued through FIL-42-2025, applies to all FDIC-supervised financial institutions and is intended to support staff involved in supervising and assessing compliance with enforcement actions.