AMERICAN BANKERS ASSOCIATION
April 19, 2004
Robert E. Feldman, Executive Secretary
Attention: Comments/Legal
ESS
Federal Deposit Insurance Corporation
550 17th Street, NW.
Washington, DC 20429
Re: SARC/AAC Guidelines: FDIC Proposed Changes to the Guidelines
for Appeals of Material Supervisory Determinations; 69 Federal Register
12855; March 18, 2004
Dear Mr. Feldman:
The Federal Deposit Insurance Corporation (FDIC) proposes to make
changes to the appeals process for material supervisory determinations
and to provide for appeals of deposit insurance determinations. Part
of the proposal would essentially strip the FDIC's Ombudsman from
ay participation in an appeal of a material supervisory determination.
The American Bankers Association (ABA) strongly objects to the FDIC's
proposal. ABA brings together all categories of banking institutions
to best represent the interests of this rapidly changing industry.
Its membership - which includes community, regional and money center
banks and holding companies, as well as savings associations, trust
companies and savings banks - makes ABA the largest banking trade
association in the country.
The FDIC proposes
to reduce the membership of the Supervision Appeals Review Committee
(SARC)
from five members to three, with the result
that the FDIC's Ombudsman would no longer have a vote on nor be allowed
to participate in supervisory matters before the SARC. The FDIC writes
that this is to "facilitate the disposition of SARC appeals
and further underscore the perception of the SARC as a fair and independent
high-level body for review of material supervisory determinations
within the FDIC." While ABA agrees that the change in all likelihood
will "facilitate the disposition of appeals," ABA believes
it highly unlikely that it will "underscore the perception of
the SARC as a fair and independent highlevel body" for review
of appeals. We believe the removal of the ombudsman from the SARC
in fact will diminish its credibility in bankers' eyes as an appropriate
appeals review body.
ABA strongly supported the provisions of Section 309 of the Riegle
Community Development and Regulatory Improvement Act of 1994 (Act)
that require each Agency to have a formal appeals process for supervisory
determinations. ABA also strongly supported the other provision
in Section 309 of that Act that requires that each Agency create
and maintain an Ombudsman to assist bankers in dealing with the
Agency when supervisory issues arise. The duties of the Ombudsman,
as set out in the Act, are to:
"(A) act
as a liaison between the agency and any affected person with respect
to any
problem such party may have in dealing with the
agency resulting from the regulatory activities of the agency; and
(B) assure that safeguards exist to encourage complainants to come
forward and preserve confidentiality."
At the time that the Agencies implemented this law by creating an
appeals process, ABA applauded the Office of the Comptroller of the
Currency's (OCC) willingness to grant real supervisory review authority
to its Ombudsman and was less supportive of the FDIC's approach,
which gave the Ombudsman only one vote out of five on the FDIC's
SARC. ABA believed then and continues to believe now that the OCC's
approach is to be preferred and that it also more closely meets the
requirements of the law.
Now the FDIC
proposes to reduce even further the authority of its Ombudsman
by removing
the Ombudsman from the review committee, which
has the additional effect of removing the Ombudsman entirely from
the process. As the FDIC writes in its proposal, "under the
proposed guidelines, the subject matter of a material supervisory
determination that has been appealed to the SARC or that has been
resolved in a final SARC decision is similarly ineligible for consideration
by the Ombudsman."
ABA opposes the FDIC's proposal. ABA believes that, at a minimum,
the Ombudsman must continue as part of the SARC, if the FDIC will
not grant to the Ombudsman the authority to
actually decide appeals. ABA believes that the FDIC's proposal does
not conform with the statutory requirement for the Ombudsman and
will definitely not "underscore the perception of the SARC as
a fair and independent high-level body" for review of appeals,
at least with bankers. ABA urges the FDIC not to adopt this part
of the proposal.
Sincerely,
Paul Smith
Senior Counsel
|
