[Federal Register Volume 73, Number 102 (Tuesday, May 27, 2008)]
[Notices]
[Pages 30393-30398]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-11416]


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FEDERAL DEPOSIT INSURANCE CORPORATION


Guidelines for Appeals of Material Supervisory Determinations

AGENCY: Federal Deposit Insurance Corporation.

ACTION: Notice and request for comment.

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SUMMARY: The Federal Deposit Insurance Corporation (FDIC) proposes to 
amend its Guidelines for Appeals of Material Supervisory Determinations 
to better align the FDIC's Supervisory Appeals Review Committee (SARC) 
process with the material supervisory determinations appeals procedures 
at the other Federal banking agencies. The proposed amendments would 
modify the supervisory determinations eligible for appeal to eliminate 
the ability of an FDIC-supervised institution to file an appeal with 
the SARC with respect to determinations or the facts and circumstances 
underlying a formal enforcement-related action or decision, including 
the initiation of an investigation. The proposed amendments also 
include limited technical amendments.

DATES: Written comments on the Proposal must be received by the FDIC on 
or before July 28, 2008 for consideration.

ADDRESSES: Interested parties are invited to submit written comments to 
the FDIC by any of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Agency Web Site: http://www.fdic.gov/regulations/laws/federal/propose.html. Follow the instructions for submitting comments.
     E-mail: [email protected]. Include ``Guidelines for 
Appeals of Material Supervisory Determinations'' in the subject line of 
the message.
     Mail: Robert E. Feldman, Executive Secretary, Attention: 
Comments/Legal ESS, Federal Deposit Insurance Corporation, 550 17th 
Street, NW., Washington, DC 20429.
     Hand Delivery: Comments may be hand-delivered to the guard 
station located at the rear of the FDIC's 550 17th Street building 
(accessible from F Street) on business days between 7 a.m. and 5 p.m.
    Instructions: All submissions received must include the agency name 
and use the title ``Guidelines for Appeals of Material Supervisory 
Determinations.''
    All comments received will be posted without change to, http://www.fdic.gov/regulations/laws/federal/propose.html, including any 
personal information provided.
    Comments may be inspected and photocopied in the FDIC Public 
Information Center, Room E-1002, 3501 North Fairfax Drive, Arlington, 
VA 22226 between 9 a.m. and 4:30 p.m. on business days.

FOR FURTHER INFORMATION CONTACT: Frank Gray, Section Chief, FDIC, 550 
17th Street, NW., Washington, DC 20429 [F-4054]; telephone: (202) 898-
3508; or electronic mail: [email protected]; or Richard Bogue, Counsel, 
FDIC, 550 17th Street, NW., Washington, DC 20429 [MB-3014]; telephone: 
(202) 898-3726; facsimile: (202) 898-3658; or electronic mail: 
[email protected].

SUPPLEMENTARY INFORMATION: The FDIC is publishing for notice and 
comment proposed amendments to the Guidelines for Appeals of Material 
Supervisory Determinations. The FDIC considers it desirable in this 
instance to garner comments regarding these amendments to the 
guidelines, although notice and comment is not required and may not be 
employed in any future amendments.
    The proposed amendments would be effective upon adoption and are 
intended to more closely align the FDIC's Guidelines for Appeals of 
Material Supervisory Determinations to the material supervisory 
determination appeals processes of the other Federal banking agencies.

Background

    Section 309(a) of the Riegle Community Development and Regulatory 
Improvement Act of 1994 (Pub. L. 103-325, 108 Stat. 2160) (Riegle Act), 
required the FDIC (as well as the other Federal banking agencies and 
the National Credit Union Administration Board (NCUA)) to establish an 
independent intra-agency appellate process to review material 
supervisory determinations. The Riegle Act defines the term 
``independent appellate process'' to mean a review by an agency 
official who does not directly or indirectly report to the agency 
official who made the material supervisory determination under review. 
In the appeals process, the FDIC is required to ensure that (1) an 
appeal of a material supervisory determination by an insured depository 
institution is heard and decided expeditiously; and (2) appropriate 
safeguards exist for

[[Page 30394]]

protecting appellants from retaliation by agency examiners.
    The term ``material supervisory determinations'' is defined in the 
Riegle Act to include determinations relating to: (1) Examination 
ratings; (2) the adequacy of loan loss reserve provisions; and (3) 
classifications on loans that are significant to an institution. The 
Riegle Act specifically excludes from the definition of ``material 
supervisory determinations'' a decision to appoint a conservator or 
receiver for an insured depository institution or to take prompt 
corrective action pursuant to section 38 of the Federal Deposit 
Insurance Act (``FDI Act''), 12 U.S.C. 1831o. Finally, Section 309(g) 
(12 U.S.C. 4806(g)) expressly provides that the Riegle Act's 
requirement to establish an appeals process shall not affect the 
authority of the Federal banking agencies to take enforcement or 
supervisory actions against an institution.
    On December 28, 1994, the FDIC published in the Federal Register, 
for a 30-day comment period, a notice of and request for comments on 
proposed Guidelines for Appeals of Material Supervisory Determinations 
(``Guidelines'') (59 FR 66965). In the proposed Guidelines, the FDIC 
proposed that the term ``material supervisory determinations,'' in 
addition to the statutory exclusions noted above, also should not 
include: (1) Determinations for which other appeals procedures exist 
(such as determinations relating to deposit insurance assessment risk 
classifications); (2) decisions to initiate formal enforcement actions 
under section 8 of the FDI Act; (3) decisions to initiate informal 
enforcement actions (such as memoranda of understanding); (4) 
determinations relating to a violation of a statute or regulation; and 
(5) any other determinations not specified in the Riegle Act as being 
eligible for appeal.
    Commenters to the proposed Guidelines suggested that the proposed 
limitations on determinations eligible for appeal were too restrictive. 
In response to comments received, the FDIC modified the proposed 
Guidelines. The FDIC added a final clarifying sentence to the listing 
of ``Determinations Not Eligible for Appeal'' in the Guidelines as 
follows: ``The FDIC recognizes that, although determinations to take 
prompt corrective action or initiate formal or informal enforcement 
actions are not appealable, the determinations upon which such actions 
may be based (e.g., loan classifications) are appealable provided they 
otherwise qualify.'' (60 FR 15929, March 28, 1995). On March 21, 1995, 
the FDIC's Board of Directors adopted the proposed Guidelines. (60 FR 
15923).
    On March 18, 2004, the FDIC published in the Federal Register, for 
a 30-day comment period, a notice and request for comments respecting 
proposed revisions to the Guidelines. (69 FR 12855). On July 9, 2004, 
the FDIC published in the Federal Register a notice of guidelines 
which, effective June 28, 2004, adopted the revised Guidelines changing 
the composition and procedures of the SARC. (69 FR 41479). The revised 
Guidelines were disseminated to FDIC-supervised financial institutions 
through a Financial Institution Letter, FIL-113-2004, issued October 
13, 2004.

Proposed Amendments

I. Amendment of Determinations Eligible for Review

    Determinations underlying enforcement actions, such as the citation 
of apparent violations of law or regulation, have been appealable under 
the FDIC's Guidelines since their enactment in 1995. Recent SARC 
appeals by FDIC-supervised institutions have, however, highlighted a 
situation where an appeal to the SARC is inconsistent with the intent 
of the Riegle Act that ``the appeals process not impair, in any way, 
the agencies' litigation or enforcement authority.'' (Senate Report No. 
103-169). Accordingly, the proposed amendments to the Guidelines would 
eliminate the ability of an FDIC-supervised institution to file an 
appeal with the SARC with respect to determinations or the facts and 
circumstances underlying formal enforcement-related actions or 
decisions, including the initiation of a formal investigation. The 
proposed amendments to the Guidelines satisfy the requirements of the 
Riegle Act and better align the FDIC's material supervisory 
determination appeals procedures with those of the other Federal 
banking agencies.
 A. Independent Review Requirement
    Section 309(a) of the Riegle Act required the FDIC to establish an 
appellate process to review material supervisory determinations. The 
SARC must make its decision based on ``facts of record,'' which are 
limited to the Report of Examination, the FDIC-supervised institution's 
appeal, an FDIC staff response, and, in some cases, a brief oral 
presentation before the SARC. The SARC appeals process does not involve 
any further factual development through investigation or discovery.
    Decisions to proceed with a formal enforcement action, on the other 
hand, must be supported by facts demonstrating both the existence of 
the violation at issue as well as facts that satisfy all of the 
required elements of the enforcement action to be pursued. All FDIC 
formal enforcement actions are reviewed by a number of high-level FDIC 
officials both prior and subsequent to their initiation. The ability to 
initiate (through issuance of a notice or stipulated order) routine 
cease-and-desist actions under section 8(b) of the FDI Act has for more 
than a decade been delegated to FDIC Regional Directors. Decisions to 
initiate enforcement actions pursuant to section 8(b) of the FDI Act 
must be made at the Deputy Regional Director or Regional Director 
level, following review and concurrence by the Regional Counsel.
    All other, non-routine formal enforcement actions are generally 
reviewed at the highest levels of the FDIC before issuance. Ultimately, 
the FDIC Board of Directors (the Board) decides the outcome of any 
contested enforcement action and that decision is fully supported by a 
factual record compiled through investigation, discovery, and an 
administrative hearing held before an impartial administrative law 
judge who makes findings of facts, conclusions of law and recommends a 
decision to the Board. The FDIC's current procedures for initiating 
formal enforcement actions ensure review of material supervisory 
determinations by high level FDIC officials. Thus, there is no need for 
determinations underlying formal enforcement actions to be separately 
reviewable by the SARC.
B. Parity With Other Federal Agencies
    As previously noted, the Riegle Act required all of the Federal 
banking agencies and the NCUA to establish appellate processes to 
review material supervisory determinations. While the various appellate 
processes adopted by the Federal banking agencies differ in substance 
and procedure, no Federal bank agency, other than the FDIC, expressly 
allows review of determinations that underlie formal enforcement 
actions.
    OCC Bulletin 2002-9, National Bank Appeals Procedures (February 25, 
2002) (OCC Guidelines), which governs the appeals procedure adopted at 
the OCC, exempts from its definition of appealable matters ``any formal 
enforcement-related actions or decisions, including decisions to: (a) 
Seek the issuance of a formal agreement or cease and desist order, or 
the assessment of a civil money penalty

[[Page 30395]]

pursuant to Section 8 of the [FDI Act] * * * and (d) commence formal 
investigations pursuant to 12 U.S.C. 481, 1818(n) and 1820(c) * * *.'' 
Additionally, OCC Guidelines define the term ``formal enforcement-
related actions or decisions'' as including ``the underlying facts that 
form the basis of a recommended or pending formal enforcement action, 
the acts or practices that are the subject of a pending formal 
enforcement action, and OCC determinations regarding compliance with an 
existing formal enforcement action.''
    The supervisory determinations that may be reviewed on appeal by 
the OTS, as defined by Thrift Bulletin TB 68a (June 10, 2004), include 
examination ratings, adequacy of loan loss reserve provisions, and 
significant loan classifications, but does not extend to decisions 
relating to ``formal enforcement-related action'' such as 
``[i]nitiating a formal investigation[,]'' ``[f]iling a notice of 
charges[,]'' and ``[a]ssessing civil money penalties.'' Both the OCC 
and the OTS specifically include formal investigations in the 
definitions of enforcement-related actions excepted from appeal.
    During the adoption of its internal appeals process, the Board of 
Governors of the Federal Reserve System (Federal Reserve) specifically 
rejected a suggestion received through comment that institutions 
consenting to the issuance of a formal enforcement action, such as a 
cease-and-desist order, be allowed to use the internal appeals process 
to challenge the material supervisory determinations that led to the 
enforcement action. The Federal Reserve found this suggestion to be 
inconsistent with the intent of the Riegle Act, which was to ``provide 
an avenue for the review of material supervisory determinations and not 
to contest enforcement actions for which an alternative appeals 
mechanism exists.'' (60 FR 16472, March 30, 1995).
    The National Credit Union Association (NCUA) limits the type of 
determinations eligible for review under its appeals process to the 
determinations expressly stated in section 309, namely: (1) Composite 
CAMEL rating of 3, 4, and 5 and all component ratings of those 
composite ratings; (2) adequacy of loan loss reserve provisions; and 
(3) loan classifications on loans that are significant as determined by 
the appealing credit union. (60 FR 14795, March 20, 1995).
    Thus, in addition to satisfying the Riegle Act's requirement that 
the Federal banking agencies adopt independent review processes, the 
proposed amendments would modify the FDIC's current Guidelines so as to 
be consistent with the other Federal banking agencies, promoting equal 
treatment of all banks and thrifts appealing material supervisory 
determinations.
C. Notice of Enforcement-Related Action or Decision
    At present, only the OCC's Guidelines explicitly provide that a 
decision to pursue a formal enforcement action will cut off rights to 
file a material supervisory determination appeal. In this regard, OCC 
Bulletin 2002-9 states that a formal enforcement-related action or 
decision ``commences when a Supervision Review Committee determines 
that the OCC will pursue a formal action,'' at which time the matter 
becomes unappealable. The OCC has Supervision Review Committees at both 
the Regional and Washington offices with delegations of authority to 
initiate different types of formal enforcement actions. The FDIC 
structure of enforcement matter decisionmaking is different, generally 
vesting authority to initiate formal enforcement actions in designated 
DSC officials, in some cases with concurrence requirements and in some 
cases following oversight by the Case Review Committee in Washington.
    The essence of the OCC's cut-off date is that a decision has been 
made by appropriately authorized officials that a formal enforcement 
action will be pursued. In order to mirror the cut-off date as closely 
as possible, the proposed amendments would establish the FDIC's cut-off 
date as the date when ``the FDIC * * * provides written notice to the 
bank indicating its intention to pursue available formal enforcement 
remedies * * *.'' Operational procedures will be established that 
provide that when an FDIC official with authority to initiate a formal 
enforcement action decides that the facts and circumstances then known 
warrant initiation of such action, a letter to the bank will be sent 
notifying the bank of the decision to pursue formal action. Such notice 
will render the underlying facts and circumstances that form the basis 
of the enforcement action unappealable.

II. Additional Technical Amendments

    Paragraph C of the Guidelines (Institutions Eligible to Appeal) 
states that the Guidelines apply to insured depository institutions 
that the FDIC supervises ``(i.e., insured State nonmember banks (except 
District banks) and insured branches of foreign banks).'' The 2004 
District of Columbia Omnibus Authorization Act, Public Law No. 108-386, 
Sec.  8, extended to the FDIC regulatory and supervisory authority over 
District of Columbia banks. Consequently, the parenthetical ``except 
District banks'' would be stricken from Paragraph C of the Guidelines.
    Paragraph G of the Guidelines (Appeal to the SARC) provides that 
the Director of the Division of Supervision and Consumer Protection 
may, with the approval of the SARC Chairperson, transfer a request for 
review directly to the SARC if the Director determines that the 
institution is entitled to relief that the Director lacks delegated 
authority to grant. This provision expedites the SARC process by 
eliminating the need for the Division Director to deny relief to an 
institution to enable it to file its appeal to the SARC. In order to 
further facilitate the prompt resolution of requests for review, a 
mechanism through which the Division Director may seek guidance from 
the SARC Chairperson is proposed for Paragraph G. An addition to 
Paragraph G would read: ``The Division Director may also request 
guidance from the SARC Chairperson as to procedural or other questions 
relating to any request for review.''
    For the aforementioned reasons, the FDIC Board of Directors 
proposes to revise the Guidelines for Appeals of Material Supervisory 
Determinations as set forth below.
* * * * *

Proposed Amended Guidelines for Appeals of Material Supervisory 
Determinations

A. Introduction

    Section 309(a) of the Riegle Community Development and Regulatory 
Improvement Act of 1994 (Pub. L. 103-325, 108 Stat. 2160) (``Riegle 
Act'') required the Federal Deposit Insurance Corporation (``FDIC'') to 
establish an independent intra-agency appellate process to review 
material supervisory determinations made at insured depository 
institutions that it supervises. The Guidelines for Appeals of Material 
Supervisory Determinations (``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 
these guidelines establish an appeals process for the review of 
material supervisory determinations by the Supervision Appeals Review 
Committee (``SARC'').

B. SARC Membership

    The following individuals comprise the three (3) voting members of 
the SARC: (1) One inside FDIC Board member, either the Chairperson, the 
Vice Chairperson, or the FDIC Director

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(Appointive), as designated by the FDIC Chairperson (this person would 
serve as the Chairperson of the SARC); and (2) one deputy or special 
assistant to each of the inside FDIC Board members who are not 
designated as the SARC Chairperson. The General Counsel is a non-voting 
member of the SARC. The FDIC Chairperson may designate alternate 
member(s) to the 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 the SARC may designate and 
authorize the most senior member of his or her staff within the 
substantive area of responsibility related to cases before the SARC to 
act on his or her behalf.

C. Institutions Eligible To Appeal

    The guidelines apply to the insured depository institutions that 
the FDIC supervises (i.e., insured State nonmember banks and insured 
branches of foreign banks) and also to other insured depository 
institutions with respect to which the FDIC makes material supervisory 
determinations.

D. Determinations Subject To Appeal

    An institution may appeal any material supervisory determination 
pursuant to the procedures set forth in these guidelines. Material 
supervisory determinations include:
    (a) CAMELS ratings under the Uniform Financial Institutions Rating 
System;
    (b) EDP ratings under the Uniform Interagency Rating System for 
Data Processing Operations;
    (c) Trust ratings under the Uniform Interagency Trust Rating 
System;
    (d) CRA ratings under the Revised Uniform Interagency Community 
Reinvestment Act Assessment Rating System;
    (e) Consumer compliance ratings under the Uniform Interagency 
Consumer Compliance Rating System;
    (f) Registered transfer agent examination ratings;
    (g) Government securities dealer examination ratings;
    (h) Municipal securities dealer examination ratings;
    (i) Determinations relating to the adequacy of loan loss reserve 
provisions;
    (j) Classifications of loans and other assets in dispute the amount 
of which, individually or in the aggregate, exceed 10 percent of an 
institution's total capital;
    (k) Determinations relating to violations of a statute or 
regulation that may impact the capital, earnings, or operating 
flexibility of an institution, or otherwise affect the nature and level 
of supervisory oversight accorded an institution;
    (l) Truth in Lending (Regulation Z) restitution;
    (m) Filings made pursuant to 12 CFR 303.11(f), for which a Request 
for Reconsideration has been granted, other than denials of a change in 
bank control, change in senior executive officer or board of directors, 
or denial of an application pursuant to section 19 of the FDI Act 
(which are contained in 12 CFR 308, subparts D, L, and M, 
respectively), if the filing was originally denied by the DSC Director, 
Deputy Director or Associate Director; and
    (n) Any other supervisory determination (unless otherwise not 
eligible for appeal) that may impact the capital, earnings, operating 
flexibility, or capital category for prompt corrective action purposes 
of an institution, or otherwise affect the nature and level of 
supervisory oversight accorded an institution.
    Material supervisory determinations do not include:
    (a) Decisions to appoint a conservator or receiver for an insured 
depository institution;
    (b) Decisions to take prompt corrective action pursuant to section 
38 of the Federal Deposit Insurance Act, 12 U.S.C. 1831o;
    (c) Determinations for which other appeals procedures exist (such 
as determinations of deposit insurance assessment risk classifications 
and payment calculations);
    (d) Decisions to initiate informal enforcement actions (such as 
memoranda of understanding); and
    (e) Formal enforcement-related actions and decisions, including 
determinations and the underlying facts and circumstances that form the 
basis of a recommended or pending formal enforcement action, and FDIC 
determinations regarding compliance with an existing formal enforcement 
action.
    A formal enforcement-related action or decision commences, and 
therefore becomes unappealable, when the FDIC initiates a formal 
investigation under 12 U.S.C. 1820(c) or provides written notice to the 
bank indicating its intention to pursue available formal enforcement 
remedies under applicable statutes or published enforcement-related 
policies of the FDIC, including written notice of a referral to the 
Attorney General or a notice to the Secretary of Housing and Urban 
Development for violations of the Equal Credit Opportunity Act or the 
Fair Housing Act. For the purposes of these guidelines, remarks in a 
Report of Examination do not constitute written notice of intent to 
pursue formal enforcement remedies.

E. Good Faith Resolution

    An institution should make a good faith effort to resolve any 
dispute concerning a material supervisory determination with the on-
site examiner and/or the appropriate Regional Office. The on-site 
examiner and the Regional Office will promptly respond to any concerns 
raised by an institution regarding a material supervisory 
determination. Informal resolution of disputes with the on-site 
examiner and/or the appropriate Regional Office is encouraged, but 
seeking such a resolution is not a condition to filing a request for 
review with the Division of Supervision and Consumer Protection or an 
appeal to the SARC under these guidelines.

F. Filing a Request for Review With the FDIC Division of Supervision 
and Consumer Protection

    An institution may file a request for review of a material 
supervisory determination with the Director, Division of Supervision 
and Consumer Protection, 550 17th Street, NW., Room F-4076, Washington, 
DC 20429, within 60 calendar days following the institution's receipt 
of a report of examination containing a material supervisory 
determination or other written communication of a material supervisory 
determination. A request for review must be in writing and must 
include:
    (a) A detailed description of the issues in dispute, the 
surrounding circumstances, the institution's position regarding the 
dispute and any arguments to support that position (including citation 
of any relevant statute, regulation, policy statement or other 
authority), how resolution of the dispute would materially affect the 
institution, and whether a good faith effort was made to resolve the 
dispute with the on-site examiner and the Regional Office; and
    (b) A statement that the institution's board of directors has 
considered the merits of the request and authorized that it be filed.
    The Director, Division of Supervision and Consumer Protection, will 
issue a written determination of the request for review, setting forth 
the grounds for that determination, within 30 days of receipt of the 
request. No appeal to the SARC will be allowed unless an institution 
has first filed a timely request for review with the Division of 
Supervision and Consumer Protection.

[[Page 30397]]

G. Appeal to the SARC

    An institution that does not agree with the written determination 
rendered by the Director of the Division of Supervision and Consumer 
Protection must appeal that determination to the SARC within 30 
calendar days from the date of that determination. The Director's 
determination will inform the institution of the 30-day time period for 
filing with the SARC and will provide the mailing address for any 
appeal the institution may wish to file. Failure to file within the 30-
day time limit may result in denial of the appeal by the SARC. If the 
Director of the Division of Supervision and Consumer Protection 
determines that an institution is entitled to relief that the Director 
lacks delegated authority to grant, the Director may, with the approval 
of the Chairperson of the SARC, transfer the matter directly to the 
SARC without issuing a determination. Notice of such a transfer will be 
provided to the institution. The Division Director may also request 
guidance from the SARC Chairperson as to procedural or other questions 
relating to any request for review.

H. Filing With the SARC

    An appeal to the SARC will be considered filed if the written 
appeal is received by the FDIC within 30 calendar days from the date of 
the division director's written determination or if the written appeal 
is placed in the U.S. mail within that 30-day period. If the 30th day 
after the date of the division director's written determination is a 
Saturday, Sunday or Federal holiday, filing may be made on the next 
business day. The appeal should be sent to the address indicated on the 
determination being appealed.

I. Contents of Appeal

    The appeal should be labeled to indicate that it is an appeal to 
the SARC and should contain the name, address, and telephone number of 
the institution and any representative, as well as a copy of the 
determination being appealed. If oral presentation is sought, that 
request should be included in the appeal. Only matters previously 
reviewed at the division level, resulting in a written determination or 
direct referral to the SARC, may be appealed to the SARC. Evidence not 
presented for review to the DSC Director may be submitted to the SARC 
only if authorized by the SARC Chairperson. The institution should set 
forth all of the reasons, legal and factual, why it disagrees with the 
determination. Nothing in the SARC administrative process shall create 
any discovery or other such rights.

J. Burden of Proof

    The burden of proof as to all matters at issue in the appeal, 
including timeliness of the appeal if timeliness is at issue, rests 
with the institution.

K. Oral Presentation

    The SARC may, in its discretion, whether or not a request is made, 
determine to allow an oral presentation. The SARC generally grants a 
request for oral presentation only if it determines that oral 
presentation is likely to be helpful or would otherwise be in the 
public interest. Notice of the SARC's determination to grant or deny a 
request for oral presentation will be provided to the institution. If 
oral presentation is held, the institution will be allowed to present 
its positions on the issues raised in the appeal and to respond to any 
questions from the SARC. The SARC may also require that FDIC staff 
participate as the SARC deems appropriate.

L. Dismissal and Withdrawal

    An appeal may be dismissed by the SARC if it is not timely filed, 
if the basis for the appeal is not discernable from the appeal, or if 
the institution moves to withdraw the appeal.

M. Scope of Review and Decision

    The SARC will review the appeal for consistency with the policies, 
practices and mission of the FDIC and the overall reasonableness of and 
the support offered for the positions advanced, and notify the 
institution, in writing, of its decision concerning the disputed 
material supervisory determination(s) within 60 days from the date the 
appeal is filed, or within 60 days from oral presentation, if held. 
SARC review will be limited to the facts and circumstances as they 
existed prior to or at the time the material supervisory determination 
was made, even if later discovered, and no consideration will be given 
to any facts or circumstances that occur or corrective action taken 
after the determination was made. The SARC may reconsider its decision 
only on a showing of an intervening change in the controlling law or 
the availability of material evidence not reasonably available when the 
decision was issued.

N. Publication of Decisions

    SARC decisions will be published. Published SARC decisions will be 
redacted to avoid disclosure of exempt information. Published SARC 
decisions may be cited as precedent in appeals to the SARC.

O. SARC Guidelines Generally

    Appeals to the SARC will be governed by these guidelines. The SARC 
will retain the discretion to waive any provision of the guidelines for 
good cause; the SARC may adopt supplemental rules governing SARC 
operations; the SARC may order that material be kept confidential; and 
the SARC may consolidate similar appeals.

P. Limitation on Agency Ombudsman

    The subject matter of a material supervisory determination for 
which either an appeal to the SARC has been filed or a final SARC 
decision issued is not eligible for consideration by the Ombudsman.

Q. Coordination With State Regulatory Authorities

    In the event that a material supervisory determination subject to a 
request for review is the joint product of the FDIC and a State 
regulatory authority, the Director, Division of Supervision and 
Consumer Protection, will promptly notify the appropriate State 
regulatory authority of the request, provide the regulatory authority 
with a copy of the institution's request for review and any other 
related materials, and solicit the regulatory authority's views 
regarding the merits of the request before making a determination. In 
the event that an appeal is subsequently filed with the SARC, the SARC 
will notify the institution and the State regulatory authority of its 
decision. Once the SARC has issued its determination, any other issues 
that may remain between the institution and the State authority will be 
left to those parties to resolve.

R. Effect on Supervisory or Enforcement Actions

    The use of the procedures set forth in these guidelines by any 
institution will not affect, delay, or impede any formal or informal 
supervisory or enforcement action in progress or affect the FDIC's 
authority to take any supervisory or enforcement action against that 
institution.

S. Effect on Applications or Requests for Approval

    Any application or request for approval made to the FDIC by an 
institution that has appealed a material supervisory determination 
which relates to or could affect the approval of the application or 
request will not be considered until a final decision concerning the 
appeal is made unless otherwise requested by the institution.

[[Page 30398]]

T. Prohibition on Examiner Retaliation

    The FDIC has an experienced examination workforce and is proud of 
its professionalism and dedication. FDIC policy prohibits any 
retaliation, abuse, or retribution by an agency examiner or any FDIC 
personnel against an institution. Such behavior against an institution 
that appeals a material supervisory determination constitutes 
unprofessional conduct and will subject the examiner or other personnel 
to appropriate disciplinary or remedial action. Institutions that 
believe they have been retaliated against are encouraged to contact the 
Regional Director for the appropriate FDIC region. Any institution that 
believes or has any evidence that it has been subject to retaliation 
may file a complaint with the Director, Office of the Ombudsman, 
Federal Deposit Insurance Corporation, 550 17th Street, Washington, DC 
20429, explaining the circumstances and the basis for such belief or 
evidence and requesting that the complaint be investigated and 
appropriate disciplinary or remedial action taken. The Office of the 
Ombudsman will work with the Division of Supervision and Consumer 
Protection to resolve the allegation of retaliation.

    By order of the Board of Directors.

    Dated at Washington, DC, the 15th day of April, 2008.

Federal Deposit Insurance Corporation.
Valerie J. Best,
Assistant Executive Secretary.
[FR Doc. E8-11416 Filed 5-23-08; 8:45 am]
BILLING CODE 6714-01-P