Appeals of Material Supervisory Determinations: Guidelines & Decisions
The Division of Supervision and Consumer Protection's (DSC) Guidelines for Processing Requests for Review of Material Supervisory Determinations
On June 28, 2004, the FDIC Board of Directors adopted revised Guidelines for Appeals of Material Supervisory Determinations (Guidelines), which govern the Supervision Appeals Review Committee (SARC). The guidelines were published in the Federal Register on July 9, 2004, and distributed to insured state nonmember institutions via Financial Institution Letter-113-2004, dated October 13, 2004. See Guidelines.
Sections D, E, and F of the Guidelines describe the material supervisory determinations that are subject to appeal, the good faith resolution process with the appropriate Regional Office, and the procedures for filing a request for review of a material supervisory determination(s) with the DSC Director. Described below are DSC's procedures for processing requests for review of material supervisory determinations.
DSC's Request for Review Processing Guidelines
The DSC Director will issue a written determination within 30 days after receiving an institution's request for review of a material supervisory determination (Review Request). DSC will take the following steps when processing Review Requests.
- Review Requests involving risk management issues will be assigned to the Supervision & Applications Branch, and Review Requests involving consumer compliance and CRA issues will be assigned to the Compliance Policy & Examination Support Branch.
- The assigned branch will contact the institution to address any identified deficiencies if the Review Request does not meet the standards in Sections D and F of the Guidelines. If unable to resolve the deficiencies, the assigned branch will prepare a letter describing the Review Request's deficiencies and return the Review Request to the institution. No further action will be taken on the matter.
- If the Review Request meets the applicable requirements, the assigned branch will prepare and mail a letter acknowledging receipt of the Review Request.
- Upon receipt of an acceptable Review Request, a Review Panel (Panel) will be formed to evaluate the Review Request. The Panel will consist of senior professional employees from DSC or other FDIC divisions, if appropriate. Panel members may be subject matter experts on issues presented in the Review Request. Panel members will not have been involved in any aspect of making or reviewing the initial material supervisory determination.
- The Panel will provide copies of the Review Request to the Regional Office that rendered the material supervisory decision(s) presently being reviewed. If the material supervisory determination was made jointly with State banking authority, copies of the Review Request will also be provided to the State banking authority.
- The Regional Office and State banking authority, if necessary, will provide to the Panel a detailed, factual written response to the issues raised in the Review Request.
- The Panel will review the institution's Review Request, the Regional Office's response, and if applicable, the State banking authority's response to the Review Request to ensure the documents are sufficient to allow an independent and complete assessment of the Review Request.
- The Panel will request, if necessary, additional information from the institution, Regional Office, or if applicable, State banking authority, in order to properly assess the Review Request.
- The Panel will consider only those facts and circumstances that existed prior to or at the time that the material supervisory determination(s) was made, even if later discovered. The Panel will not consider any facts or circumstances that occurred or corrective action taken after the material supervisory determination(s) was made.
- The Panel will prepare a memorandum that summarizes the institution's position, the Regional Office's position, and if applicable, the State banking authority's position, as well as the basis for the Panel's recommendation regarding each material supervisory determination. The Panel's memorandum will not include any reference to facts or circumstances that occurred or corrective action taken after the material supervisory determination(s) was made.
- The Panel will prepare a binder that contains the Panel's memorandum as well as pertinent information submitted by the institution, the Regional Office, and, if applicable, the State banking authority, which will be reviewed by the appropriate Associate Director, Deputy Director, and the DSC Director.
- Based on the information provided by the Panel, the institution, the Regional Office, and if applicable, the State banking authority, the DSC Director will issue a written determination, including grounds for the DSC Director's decision, to the institution.
If dissatisfied with the DSC Director's written determination, the institution has the discretion to appeal to the SARC. The DSC Director's written determination will inform the bank of the 30-day time period for filing an appeal with the SARC along with the mailing address for any appeal the institution may wish to file. Refer to Section G of the Guidelines for the requirements for filing an appeal with the SARC.