Prudential Regulatory Settlement Agreement

A Prudential Regulatory Settlement Agreement (PRSA) is an agreement that is entered into between a financial institution and its regulatory authority to address deficiencies in the institution`s compliance with applicable laws, regulations, and supervisory requirements.

The regulatory authority may identify deficiencies during the course of an examination or review, or the institution may voluntarily report them. A PRSA is typically negotiated to avoid formal enforcement actions, such as civil money penalties or cease and desist orders.

The terms of a PRSA depend on the specific deficiencies identified, but may include requirements for the institution to:

– Develop and implement policies and procedures to address the deficiencies

– Enhance its risk management practices

– Conduct independent reviews of its compliance with applicable laws and regulations

– Hire additional staff or consultants to assist with compliance efforts

– Provide periodic progress reports to the regulatory authority

The institution must also pay any applicable fines or penalties, and may be required to take other actions to remediate the deficiencies.

PRSAs are typically confidential, but some information may be made public if the regulatory authority determines that disclosure is in the public interest. Institutions should take PRSAs seriously and work to address the identified deficiencies promptly and thoroughly to avoid further regulatory action.

In conclusion, a PRSA is an important tool for regulatory authorities to enforce compliance with applicable laws and regulations. Financial institutions that enter into a PRSA should take it seriously and work diligently to address the identified deficiencies to avoid further enforcement action.