[Federal Register Volume 87, Number 98 (Friday, May 20, 2022)]
[Notices]
[Pages 30942-30947]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-10904]
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FEDERAL DEPOSIT INSURANCE CORPORATION
RIN 3064-ZA20
Guidelines for Appeals of Material Supervisory Determinations
AGENCY: Federal Deposit Insurance Corporation.
ACTION: Notice and request for comment.
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SUMMARY: On May 17, 2022, the Federal Deposit Insurance Corporation
(FDIC) adopted revised Guidelines for Appeals of Material Supervisory
Determinations. The revisions generally restore the Supervision Appeals
Review Committee as the final level of review in the supervisory
appeals process, consistent with the agency's longstanding practice of
providing Board-level review of material supervisory determinations.
DATES: The revised Guidelines for Appeals of Material Supervisory
Determinations took effect on May 17, 2022. Written comments must be
received by the FDIC on or before June 21, 2022 for consideration.
ADDRESSES: Interested parties are invited to submit written comments,
identified by RIN 3064-ZA20, by any of the following methods:
Agency website: https://www.fdic.gov/resources/regulations/federal-register-publications/. Follow the instructions for
submitting comments.
Email: [email protected]. Include ``Guidelines for Appeals
of Material Supervisory Determinations--RIN 3064-ZA20'' in the subject
line of the message.
Mail: James P. Sheesley, Assistant Executive Secretary,
Attention: Comments--RIN 3064-ZA20, Federal Deposit Insurance
Corporation, 550 17th Street NW, Washington, DC 20429.
Hand Delivery/Courier: Guard station at the rear of the
550 17th Street NW building (located on F Street NW) on business days
between 7:00 a.m. and 5:00 p.m. (EST).
Public Inspection: Comments received, including any
personal information provided, may be posted without change to https://www.fdic.gov/resources/regulations/federal-register-publications/.
Commenters should submit only information that the commenter wishes to
make available publicly. The FDIC may review, redact, or refrain from
posting all or any portion of any comment that it may deem to be
inappropriate for publication, such as irrelevant or obscene material.
The FDIC may post only a single representative example of identical or
substantially identical comments, and in such cases will generally
identify the number of identical or substantially identical comments
represented by the posted example. All comments that have been
redacted, as well as those that have not been posted, that contain
comments on the merits of this notice will be retained in the public
comment file and will be considered as required under all applicable
laws. All comments may be accessible under the Freedom of Information
Act.
FOR FURTHER INFORMATION CONTACT: Patricia Colohan, Associate Director,
Division of Risk Management Supervision, [email protected], 202-898-
7283; Tara Oxley, Associate Director, Division of Depositor and
Consumer Protection, [email protected], 202-898-6722; James Watts,
Counsel, Legal Division, [email protected], 202-898-6678.
SUPPLEMENTARY INFORMATION:
Background
Section 309(a) of the Riegle Community Development and Regulatory
Improvement Act of 1994 required the FDIC (as well as the other Federal
banking agencies and the National Credit Union Administration) to
establish an ``independent intra-agency appellate process'' to review
material supervisory determinations.\1\ The statute 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.'' \2\ In the appeals process, the FDIC is required to ensure
that: (1) An IDI's appeal of a material supervisory determination is
heard and decided expeditiously; and (2) appropriate safeguards exist
for protecting appellants from retaliation by agency examiners.\3\
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\1\ 12 U.S.C. 4806(a).
\2\ 12 U.S.C. 4806(f)(2).
\3\ 12 U.S.C. 4806(b).
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In 1995, the FDIC adopted Guidelines for Appeals of Material
Supervisory Determinations to implement section 309(a). At that time,
the FDIC's Board of Directors established the Supervision Appeals
Review Committee (SARC) to consider and decide appeals of material
supervisory determinations.\4\ The Board has modified the composition
of the SARC over the years, but as of 2021, the SARC included: One
inside member of the FDIC's Board of Directors (serving as
Chairperson); one deputy or special assistant to each of the other
inside Board members; and the General Counsel as a non-voting member.
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\4\ 60 FR 15923 (Mar. 28, 1995).
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In January 2021, the FDIC adopted Guidelines that generally
replaced the SARC as the final level of review in appellate process
with a standalone office within the FDIC, designated the Office of
Supervisory Appeals (Office).\5\ This Office was granted delegated
authority to consider and resolve appeals of material supervisory
determinations, and would be staffed by reviewing officials with bank
supervisory or examination experience. After appealing a material
supervisory determination to the relevant Division Director, an
institution would have the option to appeal to the Office. If a
material supervisory determination was appealed to the Office, a three-
or five-member panel of reviewing officials would consider the appeal
and issue a written decision to the institution. The Guidelines did not
provide for additional review beyond the Office.
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\5\ 86 FR 6880 (Jan. 25, 2021).
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Restoring Committee Structure
Prior to the establishment of the Office, the FDIC's supervisory
appeals process had always provided for Board-level review by including
a Board member on the SARC. The FDIC's experience suggests that its
longstanding practice of providing Board-level review of material
supervisory determinations would better promote independence and
accountability in the appellate process. Allowing material supervisory
determinations to be appealed to a Board-level committee underscores
the significance of an independent review and lends credibility to the
process. Furthermore, Board-level review has historically ensured that
accountability for the FDIC's supervisory determinations ultimately
remains with the agency's Board of Directors, consistent with sound
corporate governance principles.
The FDIC also believes that restoring the SARC as the final level
of review for supervisory appeals will address staffing concerns that
were inherent in the Office structure and may potentially threaten to
hinder the effectiveness of the process going forward. The Guidelines
provided that the Office
[[Page 30943]]
would be staffed with reviewing officials hired for terms, and current
government officials were ineligible to serve as reviewing officials.
The FDIC also noted that it expected to employ reviewing officials on a
part-time, intermittent basis.\6\ Given these constraints, experience
suggests that it may be challenging to recruit and retain individuals
with sufficient expertise and judgment to make final supervisory
decisions on behalf of the agency. Inability to adequately staff the
Office on an ongoing basis would prevent the agency from satisfying its
statutory mandate to expeditiously hear and decide appeals of material
supervisory determinations. By contrast, vacancies on the SARC can be
filled more promptly through existing routine internal processes,
minimizing potential impact on the administration of appeals. Reliance
on existing staff rather than employees dedicated solely to the appeals
function (even on a part-time basis) is also a more cost-effective use
of the Deposit Insurance Fund, given the historically infrequent nature
of supervisory appeals.\7\
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\6\ 85 FR 54377, 54378 (Sep. 1, 2020).
\7\ In the fifteen years prior to the establishment of the
Office, 51 appeals were submitted to the SARC out of 113,448
examinations. Some of these appeals were withdrawn prior to a
decision, raised issues that were not reviewable under the
Guidelines, or became moot because the institution had failed.
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For these reasons, the FDIC has reconstituted the SARC and adopted
revised Guidelines that restore the SARC as the final level of review
of material supervisory determinations made by the FDIC.\8\ Consistent
with the composition of the SARC as it stood in 2021, the SARC will
include: One inside member of the FDIC's Board of Directors (serving as
Chairperson); a deputy or special assistant to each of the other inside
Board members; and the General Counsel as a non-voting member. Also
consistent with the prior structure of the SARC, the Chairperson of the
FDIC's Board of Directors will have the authority to designate
alternate members in the event of vacancies.
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\8\ While the FDIC has periodically amended the Guidelines
through the notice and comment process that generally applies to
rulemakings, soliciting comment is not required.
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The revised Guidelines also include changes to certain procedural
provisions that are intended to reflect the restoration of the SARC
structure in the appeals process. For example, the SARC Chairperson
will have the authority to extend the timeframes where supervisory
appeal rights are suspended while a formal enforcement action is being
pursued, and to approve an institution's submission of evidence that
was not previously submitted to the Division Director for review. The
SARC Chairperson also may provide guidance to Division Directors in
response to procedural questions relating to appeals. These authorities
are consistent with the SARC Chairperson's authorities under the
Guidelines that were in effect until December 2021.
Communications With Supervisory Staff
The revised Guidelines also eliminate a provision that was added in
2021 specifically to accommodate an independent Office of Supervisory
Appeals. This provision required that any communications between the
Office and supervisory staff be in writing and shared with an appealing
bank. As a conforming change, and given the broad responsibilities that
SARC members have in their normal duties, the FDIC believes that a
provision limiting communications with supervisory staff is no longer
appropriate.
Formal Enforcement-Related Decisions
In the revised Guidelines, the FDIC is retaining the provisions for
considering formal enforcement-related decisions (and their underlying
facts and circumstances) that were adopted in 2021 to clarify the
intersection of the supervisory appeals process and the administrative
enforcement process. The revised Guidelines include one enhancement to
these provisions. Specifically, the Guidelines previously stated that
if the FDIC provided written notice to an institution that it is
determining whether a formal enforcement action is merited, the FDIC
would have 120 days from the date of the notice to issue an Order of
Investigation, a Notice of Charges, or to provide the institution with
a draft consent order; if the FDIC failed to do so, supervisory appeal
rights would be made available under the Guidelines. In some instances,
however, when the FDIC provides notice that it is determining whether a
formal enforcement action is merited, it invites the institution to
provide additional information. This can serve as an important channel
of communication between institutions and supervisory staff, but the
timeframes contained in the Guidelines did not account for the
possibility of an institution providing information in response to the
FDIC's notice. The FDIC believes that the process should provide ample
opportunity to review information provided by the institution before
taking enforcement action. Accordingly, the revised Guidelines provide
that the FDIC has 120 days to take action from the date of its notice
to the institution or the date of the most recent submission of
information from the institution, whichever is later.
Other Aspects of the Appeals Process
Aside from the substitution of the SARC for the Office as the final
level of review, most aspects of the supervisory appeals process remain
unchanged. The revised Guidelines continue to encourage institutions to
make good-faith efforts to resolve disputes with the on-site examiner
and/or the appropriate Regional Office. While such efforts are not
required under the process, the FDIC's experience suggests that they
may narrow the matters in dispute or eliminate the need for an appeal
in some instances.
The revised Guidelines also continue to provide for review by the
appropriate Division Director before an appeal to the SARC may be
submitted. The Division Director will have 45 days to consider the
appeal and issue a written decision on the supervisory matters at
issue.
In addition, the revised Guidelines continue to include provisions
for considering formal enforcement-related decisions (and their
underlying facts and circumstances) that were adopted in 2021 to
clarify the intersection of the supervisory appeals process and the
administrative enforcement process. These provisions were intended to
allow sufficient time to review the facts and circumstances that lead
to formal enforcement actions and ensure that such actions were not
brought prematurely, and to allow sufficient time for institutions to
consider and execute consent orders.\9\ The FDIC believes these
clarifying provisions have been beneficial and should be retained.
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\9\ See 85 FR 54377, 54380 (Sep. 1, 2020).
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Effective Date
These revised Guidelines took effect on May 17, 2022. The FDIC
believes that taking action quickly in this instance minimizes the
potential for confusion among insured depository institutions with
respect to the process they must follow in the event they wish to
appeal a material supervisory determination.
Request for Comment
The FDIC invites comment on all aspects of the revised Guidelines.
In particular, the FDIC is considering how it may further enhance the
supervisory appeals process to include the Ombudsman's perspective.
When the FDIC amended the Guidelines in 2021, it formalized its process
for including the Ombudsman's views in the consideration of appeals.
Specifically, copies of appeals to the Office were also
[[Page 30944]]
provided to the Ombudsman, and the Ombudsman could submit views to the
panel for consideration. The revised Guidelines retain this process,
allowing the Ombudsman to submit views regarding an appeal to the SARC.
Are there other enhancements to the process the FDIC should consider to
include the Ombudsman's perspective, while remaining consistent with
the Ombudsman's role as a neutral liaison between supervised
institutions and the FDIC?
For the reasons set out in the preamble, the Federal Deposit
Insurance Corporation adopts the Guidelines for Appeals of Material
Supervisory Determinations as set forth below.
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 (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, insured
branches of foreign banks, and state savings associations), and to
other insured depository institutions for 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.
(1) Material supervisory determinations include:
(a) CAMELS ratings under the Uniform Financial Institutions Rating
System;
(b) IT ratings under the Uniform Rating System for Information
Technology;
(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 appropriateness of loan loss
reserve provisions;
(j) Classifications of loans and other assets in dispute the amount
of which, individually or in the aggregate, exceeds 10 percent of an
institution's total capital;
(k) Determinations relating to violations of a statute or
regulation that may affect 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 Act (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 Federal
Deposit Insurance Act (FDI Act), 12 U.S.C. 1829 (which are contained in
12 CFR 308, subparts D, L, and M, respectively), if the filing was
originally denied by the Director, Deputy Director, or Associate
Director of the Division of Depositor and Consumer Protection (DCP) or
the Division of Risk Management Supervision (RMS);
(n) Decisions to initiate informal enforcement actions (such as
memoranda of understanding);
(o) Determinations regarding the institution's level of compliance
with a formal enforcement action; however, if the FDIC determines that
the lack of compliance with an existing formal enforcement action
requires an additional formal enforcement action, the proposed new
enforcement action is not appealable;
(p) Matters requiring board attention; and
(q) Any other supervisory determination (unless otherwise not
eligible for appeal) that may affect the capital, earnings, operating
flexibility, or capital category for prompt corrective action purposes
of an institution, or that otherwise affects the nature and level of
supervisory oversight accorded an institution.
(2) Material supervisory determinations do not include:
(a) Decisions to appoint a conservator or receiver for an insured
depository institution, and other decisions made in furtherance of the
resolution or receivership process, including but not limited to
determinations pursuant to parts 370, 371, and 381, and section 360.10
of the FDIC's rules and regulations;
(b) Decisions to take prompt corrective action pursuant to section
38 of the FDI 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); and
(d) 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.
(3) A formal enforcement-related action or decision commences, and
becomes unappealable, when the FDIC initiates a formal investigation
under 12 U.S.C. 1820(c) (Order of Investigation), issues a notice of
charges or a notice of assessment under 12 U.S.C. 1818 or other
applicable laws (Notice of Charges), provides the institution with a
draft consent order, or otherwise provides written notice to the
institution that the FDIC is reviewing the facts and circumstances
presented to determine if a formal enforcement action is merited under
applicable
[[Page 30945]]
statutes or published enforcement-related policies of the FDIC,
including written notice of a referral to the Attorney General pursuant
to the Equal Credit Opportunity Act (ECOA) or a notice to the Secretary
of Housing and Urban Development (HUD) for violations of ECOA or the
Fair Housing Act (FHA). Such notice may be provided in the transmittal
letter accompanying a Report of Examination. For the purposes of these
Guidelines, remarks in a Report of Examination do not constitute
written notice that the FDIC is reviewing the facts and circumstances
presented to determine if a proposed enforcement action is merited.
Commencement of a formal enforcement-related action or decision will
not suspend or otherwise affect a pending request for review or appeal
that was submitted before the commencement of the formal enforcement-
related action or decision.
(4) Additional Appeal Rights:
(a) In the case of any written notice from the FDIC to the
institution that the FDIC is determining whether a formal enforcement
action is merited, the FDIC must issue an Order of Investigation, issue
a Notice of Charges, or provide the institution with a draft consent
order within 120 days of such a notice, or the most recent submission
of information from the institution, whichever is later, or appeal
rights will be made available pursuant to these Guidelines. If the FDIC
timely provides the institution with a draft consent order and the
institution rejects the draft consent order in writing, the FDIC must
issue an Order of Investigation or a Notice of Charges within 90 days
from the date on which the institution rejects the draft consent order
in writing or appeal rights will be made available pursuant to these
Guidelines. The FDIC may extend these periods, with the approval of the
SARC Chairperson, after the FDIC notifies the institution that the
relevant Division Director is seeking formal authority to take an
enforcement action.
(b) In the case of a referral to the Attorney General for
violations of the ECOA, beginning on the date the referral is returned
to the FDIC, the FDIC must proceed in accordance within paragraph (a),
including within the specified timeframes, or appeal rights will be
made available pursuant to these Guidelines.
(c) In the case of providing notice to HUD for violations of the
ECOA or the FHA, beginning on the date the notice is provided, the FDIC
must proceed in accordance within paragraph (a), including within the
specified timeframes, or appeal rights will be made available pursuant
to these Guidelines.
(d) Written notification will be provided to the institution within
10 days of a determination that appeal rights have been made available
under this section.
(e) The relevant FDIC Division and the institution may mutually
agree to extend the timeframes in paragraphs (a), (b), and (c) if the
parties deem it appropriate.
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 the appropriate Regional Office is encouraged, but seeking
such a resolution is not a condition to filing a request for review
with the appropriate Division, either DCP, RMS, or the Division of
Complex Institution Supervision and Resolution (CISR), or to filing a
subsequent appeal with the SARC under these Guidelines.
F. Filing a Request for Review With the Appropriate Division
(1) An institution may file a request for review of a material
supervisory determination with the Division that made the
determination, either the Director, DCP, the Director, RMS, or the
Director, CISR (Director or Division Director), 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. Requests for review also may be
submitted electronically. To ensure confidentiality, requests should be
submitted through securemail.fdic.gov, directing the message to
[email protected]. 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 or senior
management has considered the merits of the request and has authorized
that it be filed. Senior management is defined as the core group of
individuals directly accountable to the board of directors for the
sound and prudent day-to-day management of the institution. If an
institution's senior management files an appeal, it must inform the
board of directors of the substance of the appeal before filing and
keep the board of directors informed of the appeal's status.
(2) Within 45 calendar days after receiving a request for review
described in paragraph (1), the Division Director will:
(a) Review the appeal, considering whether the material supervisory
determination is consistent with applicable laws, regulations, and
policy, make his or her own supervisory determination without deferring
to the judgments of either party, and issue a written determination on
the request for review, setting forth the grounds for that
determination; or
(b) refer the request for review to the SARC for consideration as
an appeal under Section G and provide written notice to the institution
that the request for review has been referred to the SARC.
(3) No appeal to the SARC will be allowed unless an institution has
first filed a timely request for review with the appropriate Division
Director.
(4) In any decision issued pursuant to paragraph (2)(a) of this
section, the Director 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.
(5) The Division Director may request guidance from the SARC
Chairperson or the Legal Division as to procedural or other questions
relating to any request for review.
G. Appeal to the SARC
An institution that does not agree with the written determination
rendered by the Division Director may appeal that determination to the
SARC within 30 calendar days after the date of receipt of that
determination. Failure to file within the 30-day time limit may result
in denial of the appeal by the SARC.
1. 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
[[Page 30946]]
days after the date of receipt of the Division Director's written
determination or if the written appeal is placed in the U.S. mail
within that 30-day period. The appeal should be sent to the address
indicated on the Division Director's determination being appealed, or
sent via email to [email protected]. An acknowledgment of the appeal
will be provided to the institution, and copies of the institution's
appeal will be provided to the Office of the Ombudsman and the
appropriate Division Director.
2. 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
Division Director's determination being appealed. If oral presentation
is sought, that request should be included in the appeal. If expedited
review is requested, the appeal should state the reason for the
request. Only matters submitted to the appropriate Division Director in
a request for review may be appealed to the SARC. Evidence not
presented for review to the Division Director is generally not
permitted; such evidence may be submitted to the SARC only if approved
by the SARC Chairperson and with a reasonable time for the Division
Director to review and respond. The institution should set forth all of
the reasons, legal and factual, why it disagrees with the Division
Director's determination. Nothing in the SARC administrative process
shall create any discovery or other such rights.
3. 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.
4. Submissions From the Ombudsman and the Division Director
The Ombudsman and the Division Director each may submit views
regarding the appeal to the SARC within 30 calendar days of the date on
which the appeal is received by the SARC.
5. Oral Presentation
The SARC will, if a request is made by the institution or by FDIC
staff, allow an oral presentation. The SARC may hear oral presentations
in person, telephonically, electronically, or through other means
agreed upon by the parties. If an oral presentation is held, the
institution and FDIC staff will be allowed to present their positions
on the issues raised in the appeal and to respond to any questions from
the SARC.
6. Consolidation, Dismissal, and Rejection
Appeals based upon similar facts and circumstances may be
consolidated for expediency. 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.
The SARC will decline to consider an appeal if the institution's right
to appeal is not yet available under Section D(4), above.
7. Scope of Review and Decision
The SARC will be an appellate body and will make independent
supervisory determinations. 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. The SARC's 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 will
not consider any aspect of an appeal that seeks to change or modify
existing FDIC rules or policy. The SARC, after consultation with the
Legal Division, will refer any appeals that raise policy matters of
first impression to the Chairperson's Office for its consideration. The
SARC will notify the institution, in writing, of its decision
concerning the disputed material supervisory determination(s) within 45
days after the date the SARC meets to consider the appeal, which
meeting will be held within 90 days after either the date of the filing
of the appeal or the date that the Division Director refers the appeal
to the SARC.
H. Publication of Decisions
Decisions of the SARC will be published as soon as practicable, and
the published decisions will be redacted to avoid disclosure of the
name of the appealing institution and any information exempt from
disclosure under the Freedom of Information Act and the FDIC's document
disclosure regulations found in 12 CFR part 309. In cases in which
redaction is deemed insufficient to prevent improper disclosure,
published decisions may be presented in summary form. Published SARC
decisions may be cited as precedent in appeals to the SARC. Annual
reports on the SARC's decisions and Division Directors' decisions with
respect to institutions' requests for review of material supervisory
determinations also will be published.
I. Appeal Guidelines Generally
Appeals to the SARC will be governed by these Guidelines. The SARC,
with the concurrence of the Legal Division, will retain discretion to
waive any provision of the Guidelines for good cause. Supplemental
rules governing the SARC's operations may be adopted.
Institutions may request extensions of the time period for
submitting appeals under these Guidelines from either the appropriate
Division Director or the SARC Chairperson, as appropriate. If a filing
under these Guidelines is due on a Saturday, Sunday, or a Federal
holiday, the filing may be made on the next business day.
J. 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.
However, pursuant to Section (G)(4) of these Guidelines, the Ombudsman
may submit views to the SARC for its consideration in connection with
any pending appeal.
K. 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, DCP, the Director, RMS, or the
Director, CISR, as appropriate, 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 regulatory
authority will be left to those parties to resolve.
L. 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 during the appeal or
[[Page 30947]]
affect the FDIC's authority to take any supervisory or enforcement
action against that institution.
M. 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 that
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.
N. 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, 3501 Fairfax Drive Suite E-2022,
Arlington, Virginia, 22226, 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 appropriate Division
Director to resolve the allegation of retaliation.
Federal Deposit Insurance Corporation.
By order of the Board of Directors.
Dated at Washington, DC, on May 17, 2022.
James P. Sheesley,
Assistant Executive Secretary.
[FR Doc. 2022-10904 Filed 5-19-22; 8:45 am]
BILLING CODE 6714-01-P