In response to the recent COVID-19 outbreak, on March 6, 2020, the Federal Financial Institutions Examination Council (FFIEC) issued an Interagency Statement on Pandemic Planning on behalf of the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, National Credit Union Administration, Office of the Comptroller of the Currency, Consumer Financial Protection Bureau and the State Liaison Committee.

The Statement identifies actions that financial institutions should take to minimize the potential adverse effects of a pandemic and provides specific items that should be addressed in a financial institution’s business continuity plan (BCP).  Due to the wide variety of possible ramifications from a pandemic, BCPs should be updated to provide for a “preventative program, a documented strategy scaled to the stages of pandemic outbreak, a comprehensive framework to ensure the continuance of critical operations, a testing program, and an oversight program to ensure that the plan is reviewed and updated.”

The Statement provides further specifics with respect to how these updates should be made:

A Preventative Program:  The preventative program should focus on reducing the possibility that the financial institutions operations will be significantly impeded by a pandemic.  This requires institutions to monitor potential outbreaks, focus on employee education, communication and coordination with key service providers and suppliers.  The preventative program also requires financial institutions to ensure that their employees have proper hygiene training and tools.

A Documented Strategy:  It is insufficient for a financial institution to have a strategy; each component of the institution’s strategy must be scaled for each stage of a pandemic outbreak such as those described by the Center for Disease Control and Prevention (CDC).

A Comprehensive Framework:  Financial institutions must have the ability to continue critical operations even in the event that a significant portion of their staff are unavailable.  Procedures include providing employees the opportunity to work remotely or from alternate sites, minimizing contact with others, and the ability to scale up the use of online and telephone banking services.

A Testing Program:  It is insufficient to merely have a system in place; the procedures and policies must be tested to ensure that they will effective so as to allow continuity of critical operations.

An Oversight Program:  Due to the evolving nature of pandemics, it is important that a financial institutions periodically review their policies, standards, and procedures so that they are up-to-date.

As all industries are grappling with a response to COVID-19, it is imperative that financial institutions are in step with these recent and additional regulatory requirements that are being imposed by regulators.

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