FDIC Establishes Independent Office of Supervisory Appeals

The Federal Deposit Insurance Corporation ("FDIC") "adopt[ed] revised guidelines for Appeals of Material Supervisory Determinations to replace the existing Supervision Appeals Review Committee with an independent, standalone office to consider and decide supervisory appeals." 

In the final guidelines, the FDIC established the Office of Supervisory Appeals ("Office") as a standalone body which will replace the internal Supervision Appeals Review Committee. The FDIC said the Office will be staffed by reviewing officials who possess bank supervisory or industry experience. The agency specified that appeals will be heard by three-member panels, which must include at least one member with bank supervisory experience and one member with industry experience to ensure diverse perspectives.

The FDIC said the new guidelines were designed to enhance independence and transparency by: (i) requiring the Office to make independent supervisory determinations without deferring to the judgments of either party, while the burden of proof remains with the institution; (ii) expanding appeal rights to include facts underlying proposed formal enforcement actions, provided the action is not based on unsafe or unsound practices or anti-money laundering violations; (iii) generally expediting the review of such enforcement-related appeals before the action is initiated; and (iv) mandating that any ex parte communications between the Office and supervisory staff regarding an appeal be shared in writing with the institution.

The FDIC also updated the definition of "material supervisory determinations" to explicitly include compliance with informal enforcement actions and "matters requiring attention." Additionally, the guidelines provide that the Office may waive procedural requirements for good cause with Legal Division concurrence and require that institutions be provided with proposed redactions to written decisions prior to publication to address potential identification concerns.

The revised guidelines will become effective once the Office is fully operational.