Compliance Journal January 2023
Special Focus FDIC’s Revised Guidelines for Appeals of Material Supervisory Determinations The Federal Deposit Insurance Corporation (FDIC) recently adopted revised Guidelines for Appeals of Material Supervisory Determinations (Guidelines). The revisions expand and clarify the role of FDIC’s Ombudsman, add the Ombudsman to the Supervision Appeals Review Committee as a non-voting member, and require that materials considered by the Supervision Appeals Review Committee be shared with both parties to the appeal on a timely basis, subject to applicable legal limitations on disclosure. In addition, the revised Guidelines allow insured depository institutions to request a stay of a material supervisory determination while an appeal is pending. Insured depository institutions (IDIs) should know the process and timelines associated with the revised Guidelines to effectively file an appeal should the need arise. The revised Guidelines are effective December 13, 2022. The Guidelines apply to IDIs that FDIC supervises (i.e., insured State nonmember banks, insured branches of foreign banks, and state savings associations), and to other IDIs for which FDIC makes material supervisory determinations. Introduction Section 309(a) of the Riegle Community Development and Regulatory Improvement Act required FDIC to establish an independent intra-agency appellate process to review material supervisory determinations made at IDIs that it supervises. The Guidelines describe the types of determinations that are eligible for review and the process by which appeals will be considered and decided. The procedures set forth in the Guidelines establish an appeals process for the review of material supervisory determinations by the Supervision Appeals Review Committee (SARC). SARC Membership The following individuals comprise the three (3) voting members of SARC: (1) One inside FDIC Board member, either the Chairperson, the Vice Chairperson, or the FDIC Director (Appointive), as designated by the FDIC Chairperson (this person would serve as the Chairperson of SARC); and (2) one deputy or special assistant to each of the inside FDIC Board members who are not designated as SARC Chairperson. The General Counsel and the Ombudsman are non-voting members of SARC. The FDIC Chairperson may designate alternate member(s) to SARC if there are vacancies so long as the alternate member was not involved in making or affirming the material supervisory determination under review. A member of SARC may designate and authorize a member of his or her staff within the member’s area of responsibility related to cases before SARC to act on his or her behalf. Determinations Subject to Appeal An IDI may appeal any material supervisory determination pursuant to the procedures set forth in the Guidelines. Under the Guidelines, a material supervisory determination includes: • •
CAMELS ratings under the Uniform Financial Institutions Rating System; IT ratings under the Uniform Rating System for Information Technology;