The Federal Deposit Insurance Corporation updated Chapter 4 of its Formal and Informal Enforcement Actions Manual on 8 September 2025, revising the standard required for the termination of Section 8(b) cease-and-desist and consent orders. Under the revised policy, consent orders may be terminated when a supervised institution has achieved substantial compliance with their terms, replacing the prior requirement that full compliance be demonstrated before the FDIC would consider lifting a formal enforcement action.
Consent orders are legally binding agreements entered into between the regulator and a supervised institution that set out remedial actions required to address identified supervisory deficiencies.
DEPARTURE FROM THE 2022 FULL-COMPLIANCE STANDARD
The previous FDIC policy, set in July 2022 (FIL-34-2022), generally precluded termination of a Section 8(b) order unless the institution was in full compliance with all of its provisions.
Under the new policy, examiners and supervisory staff will assess whether the principal objectives of a consent order have been met, even if minor or isolated conditions remain outstanding. The revised manual defines substantial compliance as satisfying an order's essential requirements even where minor or isolated requirements have not been fully met.
STATUTORY BASIS
The FDIC made the change through an update to its Formal and Informal Enforcement Actions Manual. The change applies to consent orders under Section 8(b) of the Federal Deposit Insurance Act, the principal statutory provision governing formal enforcement actions by the FDIC against banks within its supervisory jurisdiction.