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[Federal Register: March 18, 2004 (Volume 69, Number 53)]
[Notices]
[Page 12855-12862]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr18mr04-55] =======================================================================
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FEDERAL DEPOSIT INSURANCE CORPORATION
Intra-Agency Appeal Process: Guidelines for Appeals of Material
Supervisory Determinations and Guidelines for Appeals of Deposit
Insurance Assessment 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 revise its Guidelines for Appeals of Material Supervisory
Determinations; these revisions are intended to enhance the Supervision
Appeals Review Committee (``SARC'') process by reconstituting the SARC
and modifying the procedures for appeals to the SARC. The FDIC also
proposes to issue Guidelines for Appeals of Deposit Insurance
Assessment Determinations, which will reconstitute the Assessment
Appeals Committee (``AAC''), and will also set forth procedures for
pursuing appeals to the AAC. These changes are intended to benefit
insured institutions seeking review of material supervisory
determinations and assessment determinations.
DATES: Comments must be submitted on or before April 19, 2004.
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 on the FDIC Web site.
E-mail: comments@FDIC.gov. Include ``SARC/AAC
Guidelines'' in the subject line of the message.
Mail: Robert E. Feldman, Executive Secretary,
Attention: Comments/Legal
[[Page 12856]]
ESS, Federal Deposit Insurance Corporation, 550 17th Street, NW.,
Washington, DC 20429.
Hand Delivery/Courier: Comments may be hand-
delivered to the guard station located at the rear of the FDIC's 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 ``SARC/AAC Guidelines''. The FDIC may post comments
on its Internet site at: http://www.fdic.gov/regulations/laws/federal/propose.html
.
Docket: For access to the docket to read background documents or
comments received, go to the FDIC Public Information Center, Room 100,
801 17th Street, NW., Washington, DC, between 9 a.m. and 4:30 p.m. on
business days.
FOR FURTHER INFORMATION CONCERNING THE SARC GUIDELINES CONTACT: Lisa K.
Roy, Associate Director, Division of Supervision and Consumer
Protection, (202) 898-3764; Christopher Bellotto, Counsel, Legal
Division, (202) 898-3801, Federal Deposit Insurance Corporation, 550
17th St., NW., Washington, DC 20429.
FOR FURTHER INFORMATION CONCERNING THE AAC GUIDELINES CONTACT: William
V. Farrell, Chief, Assessment Management Section, Division of Finance,
(202) 416-7156; Diane Ellis, Associate Director, Division of Insurance
and Research, (202) 898-8978; Lisa K. Roy, Associate Director, Division
of Supervision and Consumer Protection, (202) 898-3764; Christopher
Bellotto, Counsel, (202) 898-3801, Legal Division, Federal Deposit
Insurance Corporation, 550 17th Street, NW., Washington, DC 20429.
SUPPLEMENTARY INFORMATION: The FDIC is publishing for notice and
comment proposed revisions to the Guidelines for Appeals of Material
Supervisory Determinations as well as proposed Guidelines for Appeals
of Deposit Insurance Assessment Determinations. The FDIC considers it
desirable in this instance to garner comments regarding these
guidelines, although notice and comment rulemaking may not be employed
in making future amendments.
The proposed revised Guidelines for Appeals of Material Supervisory
Determinations would be effective upon adoption and would supersede the
FDIC's current Guidelines for Appeals of Material Supervisory
Determinations that were adopted by the FDIC's Board of Directors on
March 21, 1995. The proposed guidelines would incorporate changes to
the composition of the SARC, reducing it from five to three voting
members, and would make changes to the existing procedures governing
SARC appeals. These amendments include new rules under which the FDIC's
Division of Supervision and Consumer Protection (``DSC'') would issue
written decisions if it denies requests for review of material
supervisory determinations; if dissatisfied with the division's
determination, institutions would decide for themselves whether to
appeal to the SARC; and SARC decisions would be published, with exempt
material redacted. The types of determinations that are eligible for
review by the SARC and the standards by which such appeals are decided
would remain unchanged.
The AAC provides for FDIC appellate review of assessment payment
computation and assessment risk classification determinations. The
proposed Guidelines for Appeals of Deposit Insurance Assessment
Determinations will change the composition of the AAC, reducing it from
seven to five voting members, and will set forth procedures to be
followed by insured depository institutions that choose to appeal
adverse assessment determinations they have received from the
appropriate FDIC division. As with the SARC, AAC decisions would be
published, with exempt material redacted. The types of determinations
that are eligible for review by the AAC and the standards by which such
appeals are decided would remain unchanged.
The FDIC has sought to conform the SARC and AAC structures and
procedures to the extent appropriate, making both processes easier for
institutions to navigate and the FDIC to administer.
I. Proposed Revised Guidelines for Appeals of Material Supervisory
Determinations
Section 309(a) of the Riegle Community Development and Regulatory
Improvement Act of 1994 (Public Law 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) to establish an
independent intra-agency appellate process to review material
supervisory determinations. On March 21, 1995, the FDIC's Board of
Directors adopted Guidelines for Appeals of Material Supervisory
Determinations, which established and set forth procedures governing
the SARC, whose purpose was to consider and decide appeals of material
supervisory determinations as required by the Riegle Act.
A. Membership
As set forth in the original guidelines, the SARC consisted of the
FDIC Vice Chairperson (as chair of the SARC), the Director of the
Division of Supervision (``DOS''), the Director of the Division of
Compliance and Consumer Affairs (``DCA''), the Ombudsman, and the
General Counsel (or their designees).
The SARC guidelines were amended to add the Director of the
Division of Insurance (now the Director of the Division of Insurance
and Research (``DIR'')) as a voting SARC member, to provide formally
that the Directors of DOS and DCA (now the DSC Director) would not vote
on cases brought before the SARC by their respective (now consolidated)
divisions, to provide that designees would be limited to the most
senior members of a SARC member's staff, and to include Truth-in-
Lending (Regulation Z) restitution. In addition, the SARC was expressly
authorized to consider appeals of denied filings as set forth in 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'') (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 DSC.
While the current guidelines satisfy the Riegle Act's requirement
to establish an independent appellate process for the review of
material supervisory determinations, the proposed changes, based on
eight years' experience since approval of the original 1995 guidelines,
should serve 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.
The FDIC is proposing to modify its guidelines and change the
composition of the SARC so that division directors and the Ombudsman no
longer serve on the SARC, and new SARC members are drawn from the most
senior levels of the Corporation. The Director of the DSC, who is
responsible for the operations of two former divisions (DOS and DCA)
and who represents the division that made the material supervisory
determination under review, the Director of DIR, as well as the
Ombudsman, would no longer be SARC members. As revised, the SARC
membership would consist of three (3) voting members: (1) One FDIC
Board
[[Page 12857]]
member, either the Chairperson, the Vice Chairperson, or the Director
(Appointive), as designated by the FDIC Chairperson (this person would
serve as the Chairperson of the SARC); (2) and (3) one deputy to each
of the FDIC Board members who are not designated as the SARC
Chairperson. The General Counsel would be the fourth, and non-voting,
member of the SARC. The FDIC Chairperson would designate alternate
member(s) to the SARC if vacancies occur so long as the alternate
member was not directly or indirectly involved in making or affirming
the material supervisory determination under review. In addition, a
member of the SARC could designate and authorize the most senior member
of his or her staff--within the substantive area--to act on his or her
behalf in SARC matters.
The DSC Director would retain the delegated authority formerly
granted, respectively to the DOS and DCA Directors under the current
SARC guidelines, to grant requests for review of material supervisory
determinations in favor of banks dissatisfied with a decision made by
their respective divisions.
The current guidelines preclude the Ombudsman from considering the
merits of any material supervisory determination for which an appeal
had been initiated or a final decision made by the SARC, other than in
the Ombudsman's role as a SARC member. 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.
Any other problems, however, that an institution may have in dealing
with the FDIC are eligible for consideration by the Ombudsman.
B. Appeal
Under the current SARC guidelines, if the Director of DSC
determines not to grant a request for review of a material supervisory
determination, no written determination is issued. Instead, the
Director must forward that request directly to the SARC for its
appellate determination. In this sense, the institution's request for
review is also its appeal to the SARC, if the DSC Director does not
grant the request. This process of automatic appeal to the SARC differs
from the AAC process, under which an institution must file an appeal to
the AAC if it wishes to obtain further review of a determination
received at the division level.
Under the proposed SARC guidelines, an automatic appeal to the SARC
is eliminated. Instead, institutions that wish to obtain SARC review of
material supervisory determinations would be required to file an
appeal--within 30 calendar days from the date of the division
director's written determination--to the SARC. The FDIC believes that
this procedural change will benefit both institutions seeking review of
material supervisory determinations and the FDIC. Unlike the present
process, institutions would receive a written determination issued by
DSC within 30 days, setting forth the reasons for the division's
denial. Based on DSC's determination, institutions could then decide
for themselves whether to appeal to the SARC. Institutions may, for
example, decide that the issue presented is not one that merits
expending the time or effort of seeking a SARC determination. The SARC
could also benefit from a diminished caseload since not every
institution that receives a denial at the division level may choose to
file a SARC appeal. Finally, the appeal requirement for SARC will bring
that process closer in line with the AAC process, making both easier
for institutions to navigate and the FDIC to administer.
An appeal to the SARC would be considered filed if received by the
FDIC within 30 calendar days from the date of the determination being
appealed or if placed in the United States mail within 30 calendar days
from the date of that determination. Institutions would include their
name and address, the name and address of any representative, a copy of
the determination being appealed, and all of the reasons, factual or
legal, why the institution disagrees with the DSC Director's
determination. FDIC staff would analyze the filing for the SARC. Any
FDIC staff analysis would be considered part of the intra-agency
deliberative process and would not be disclosed to insured
institutions. The decision of the SARC would be provided to the
institution and would set forth the rationale for the agency's
determination.
The original SARC guidelines permitted the institution to request
an appearance before the SARC to present evidence or otherwise support
its position, which the SARC may allow in its discretion. Under the
proposed guidelines, the SARC would have the discretion, whether or not
a request is made, to determine to allow an oral presentation. If an
institution wishes to make an oral presentation, it should include in
its appeal a statement to that effect. Oral presentations would
generally be granted only if the SARC determines in its discretion that
the oral presentation would be helpful or would otherwise be in the
public interest. At the oral presentation, the institution would
present its position and respond to any questions the SARC might have.
The SARC could also require that FDIC staff participate in the oral
presentation as the SARC deems appropriate.
Only matters previously reviewed at the division level, resulting
either in a written determination or direct referral to the SARC, could
be appealed to the SARC. Submission of new evidence not presented at
the division level would be prohibited unless authorized by the SARC
Chairperson. No discovery or other such rights would be created in the
SARC process.
C. Other Provisions
The current guidelines also provide that while SARC decisions
constitute the final supervisory determination of the FDIC, the SARC
can reconsider its decision if new information is presented and good
cause is shown why that information is material to the dispute. In
practice, however, such new information has never been presented to the
SARC, and therefore the FDIC proposes to eliminate this reconsideration
provision. In doing so, the FDIC notes that both the SARC and the AAC
have implicit authority to correct errors or omissions that may have
occurred in the administrative process and to revise final decisions as
necessary.
The types of determinations that are eligible for review by the
SARC and the standards by which SARC appeals are decided remain
unchanged.
II. Proposed Guidelines for Appeals of Deposit Insurance Assessment
Determinations
The FDIC Board of Directors created the AAC in 1999 to provide a
high-level process for considering all deposit insurance assessment
appeals brought from determinations made by the appropriate FDIC
Divisions. Responsibility for deposit insurance assessments is shared
by the Division of Finance (``DOF''), DIR and, in some respects, DSC.
DOF is responsible for calculating the assessments owed by individual
insured institutions based on assessment risk classifications assigned
by DIR, which in turn uses supervisory information provided by DSC. To
calculate an institution's assessment, DOF applies the assessment rate
that corresponds to the institution's assessment risk classification to
that institution's assessment base. DOF determines the assessment base
from deposit and other data submitted in the institution's Report of
Condition or Thrift Financial Report. An insured
[[Page 12858]]
institution may request revision of its quarterly assessment payment by
following the procedures set forth at 12 CFR 327.3(h); similarly, an
insured institution may request review of its assessment risk
classification by following the procedures set forth at 12 CFR
327.4(d). Having complied with those procedures and received a
determination from the appropriate division, an institution
dissatisfied with that division's determination may file an appeal with
the AAC. After reviewing the determination made at the division level,
the AAC will issue a final determination.
A. Membership
As presently constituted, the AAC membership consists of the Vice
Chairperson of the Board (as Chairperson of the AAC), the Deputy to the
Office of the Comptroller of the Currency's (``OCC'') member on the
FDIC's Board of Directors, the Deputy to the Office of Thrift
Supervision's (``OTS'') member on the FDIC's Board of Directors; the
General Counsel, the Director of the Division of Supervision and
Consumer Protection; the Deputy to the Chairperson and Chief Financial
Officer or the DOF Director; and the DIR Director. Any member may
designate the most senior members of his or her staff to act in the
member's stead. If a member's division made the determination that is
subject to appeal, that member or designee does not vote with respect
to that appeal.
Since its creation in 1999, the AAC membership has included
individuals who are knowledgeable and experienced in matters related to
the FDIC's assessment activities, bringing to the AAC the necessary
experience and judgment to make well-informed decisions concerning
determinations on appeal. The FDIC believes that the long-range
interests of both the agency and the institutions it insures are best
served by assuring that all assessment determinations are as fair and
accurate as possible, both in practice and in perception.
The FDIC is now proposing to modify the composition of the AAC by
eliminating the division directors and drawing new members from the
most senior levels of the Corporation. As revised, the AAC would
consist of five (5) voting members: (1) One FDIC Board member, either
the Vice Chairperson or the Director (Appointive), as designated by the
FDIC Chairperson (this person would serve as Chairperson of the AAC);
(2) a deputy to the FDIC Chairperson, to be designated by the FDIC
Chairperson; (3) a deputy to the OCC member on the FDIC's Board of
Directors; (4) a deputy to the OTS member on the FDIC's Board of
Directors; and (5) a deputy to either the Vice Chairperson or the FDIC
Director (Appointive), whoever is not the AAC Chairperson. The General
Counsel would be the sixth, and non-voting, member of the AAC. The FDIC
Chairperson would designate alternate member(s) to the AAC if vacancies
occur so long as the alternate member was not directly or indirectly
involved in making or affirming the determination under review. A
member of the AAC could designate and authorize the most senior member
of his or her staff within the substantive area to act on his or her
behalf in AAC matters.
The proposed changes, which would eliminate division directors as
AAC members, should serve to underscore the perception of the AAC as a
fair and independent high-level body for review of assessment disputes.
B. AAC Proceedings
Under the FDIC's assessment regulations, institutions that dispute
the computation of their quarterly assessment payments must comply with
the filing requirements set forth at 12 CFR 327.3(h) and institutions
that dispute their risk classification must comply with the filing
requirements set forth at 12 CFR 327.4(d).
Current Sec. 327.3(h) provides that an institution may request
revision of the computation of its quarterly assessment payment and
sets out the procedures for doing so. Any such request must be made
within 60 days of the quarterly assessment invoice for which a revision
is requested, or within 60 days of detection of an error in the
institution's quarterly Call Report and must include any supporting
documentation. Assessment audit and assessment refund determinations
are also subject to review under section 327.3(h), although not
expressly mentioned in the rule. Any additional information requested
by the FDIC must be provided within 21 days. Section 327.3(h) mandates
that the FDIC respond within 60 days and provides that the response
should include the FDIC's determination wherever feasible; otherwise,
the FDIC's determination--rendered by the Chief Financial Officer or
designee (usually DOF)--is to be made as promptly as possible.
Under current Sec. 327.4(d), an institution may request review of
its assessment risk classification within 90 days from the date it
receives notice of that classification by the FDIC. Supporting
documentation must be included with the request. Any additional
information requested by the FDIC must be provided within 21 days. The
FDIC--through the appropriate division--either DIR or DSC--must
promptly notify the institution of its determination.
An insured depository institution that is dissatisfied with the
determination made by the appropriate division pursuant to 12 CFR
327.3(h) or 327.4(d) may appeal that determination to the AAC. The AAC
will review the determination being appealed and, unless the AAC
determines to refer the matter to the FDIC Board of Directors for
consideration, render a final determination which will constitute final
agency action. FDIC staff would analyze the filing for the AAC. Any
FDIC staff analysis would be considered part of the intra-agency
deliberative process and would not be disclosed to insured
institutions. The decision of the AAC would be provided to the
institution and would set forth the rationale for the agency's
determination.
As with the SARC, the AAC would have the discretion, whether or not
a request is made, to determine to allow an oral presentation. The
institution's appeal should contain a statement regarding whether it
wishes to make an oral presentation. Oral presentations would generally
be granted only if the AAC determines in its discretion that oral
presentation would be helpful or would otherwise be in the public
interest. At the oral presentation, the institution would present its
position and respond to any questions the AAC might have. The AAC could
also require that FDIC staff participate as the AAC deems appropriate.
Only matters previously reviewed at the division level would be
subject to AAC review. Submission of new evidence not presented at the
division level would be prohibited unless authorized by the AAC
Chairperson. No discovery or other such rights would be created in the
AAC process.
Like the SARC, the AAC has implicit authority to correct errors
that may have occurred in the administrative process and to revise
final decisions as necessary.
For the aforementioned reasons, the FDIC Board of Directors
proposes the Guidelines for Appeals of Material Supervisory
Determinations be revised as set forth below. The Board's proposed
Guidelines for Appeals of Deposit Insurance Assessment Determinations
immediately follow the proposed revisions to the Guidelines for Appeals
of Material Supervisory Determinations.
* * * * *
[[Page 12859]]
Proposed Revised Guidelines for Appeals of Material Supervisory
Determinations
A. Introduction
Section 309(a) of the Riegle Community Development and Regulatory
Improvement Act of 1994 (Public Law 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 FDIC adopted its Guidelines for
Appeals of Material Supervisory Determinations (``guidelines'') in 1995
and now proposes to revise them. The 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 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); (2) and (3) one deputy to each of the 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 (except
District 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 formal enforcement actions under section
8 of the Federal Deposit Insurance Act, 12 U.S.C. 1818 (including
assessment of civil money penalties) or under any other provisions of
law or regulation; and
(e) Decisions to initiate informal enforcement actions (such as
memoranda of understanding).
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.
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:
[[Page 12860]]
(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 request for review with the Division of Supervision
and Consumer Protection.
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.
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. 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 at the
division level may be submitted 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 would be helpful or would otherwise be in the public
interest. 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.
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.
[[Page 12861]]
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.
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.
* * * * *
Proposed Guidelines for Appeals of Deposit Insurance Assessment
Determinations
A. Introduction
The Assessment Appeals Committee (``AAC'') was formed in 1999 and,
pursuant to the direction of the FDIC Board of Directors, has been
functioning as the appellate entity responsible for making final
determinations pursuant to part 327 of the FDIC's regulations regarding
the assessment risk classification and the assessment payment
calculation of insured depository institutions. The AAC provides a
process for considering all deposit insurance assessment appeals
brought from determinations made by the appropriate FDIC divisions. The
procedures set forth in these guidelines apply to all appeals to the
AAC.
B. AAC Membership
The following individuals comprise the five (5) voting members of
the AAC, representing each member of the FDIC Board of Directors: (1)
One FDIC Board member, either the Vice Chairperson or the Director
(Appointive), as designated by the FDIC Chairperson (this person would
serve as Chairperson of the AAC); (2) one of the deputies to the FDIC
Chairperson, to be designated by the FDIC Chairperson; (3) a deputy to
the Office of the Comptroller of the Currency's member on the FDIC's
Board of Directors; (4) a deputy to the Office of the Office of Thrift
Supervision's member on the FDIC's Board of Directors; and (5) a deputy
to either the Vice Chairperson or the Director (Appointive), whoever is
not the AAC Chairperson. The General Counsel is a non-voting member of
the AAC. The FDIC Chairperson may designate alternative member(s) for
the AAC if vacancies occur. A member of the AAC may designate and
authorize the most senior member of his or her staff within the
substantive area of responsibility related to cases before the AAC to
act on his or her behalf.
C. Institutions Eligible to Appeal
These guidelines apply to all depository institutions insured by
the FDIC.
D. Determinations Subject to Appeal
The AAC, upon appeal by an insured depository institution, reviews
determinations of the Director of the Division of Insurance and
Research or the Director of the Division of Supervision and Consumer
Protection made pursuant to the procedures set forth at 12 CFR 327.4(d)
regarding the assessment risk classification assigned by the FDIC to
the institution and renders a final determination. The AAC also, upon
appeal by an insured depository institution, reviews determinations
made pursuant to 12 CFR 327.3(h) by the Chief Financial Officer (or the
Director of the Division of Finance, as designee) regarding the
computation of the institution's assessment payment and renders a final
determination.
E. Appeal to the AAC
An institution that does not agree with the written determination
rendered by the appropriate division director pursuant to 12 CFR
327.4(d) and 12 CFR 327.3(h) must appeal that determination to the AAC
within 30 calendar days from the date of the determination. The
division director's determination will inform the institution of the
30-day time limit for filing with the AAC and will provide the mailing
address for any appeal the institution may wish to file. Failure to
file within the 30-day time period may result in denial of the appeal
by the AAC. If a division director 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
AAC, transfer the matter directly to the AAC without issuing a
determination.
F. Filing With the AAC
An appeal to the AAC 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.
G. Contents of Appeal
The appeal should be labeled to indicate that it is an appeal to
the AAC 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. Only matters previously reviewed at the
division level, resulting in either a written determination or a direct
referral to the AAC, may be appealed to the AAC. Evidence not presented
at the division level may be submitted only if authorized by the AAC
Chairperson. The institution should set forth all of the reasons, legal
and factual, why it disagrees with the determination. Nothing in the
AAC administrative process shall create any discovery or other such
rights.
H. 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.
I. Oral Presentation
The AAC may, in its discretion, whether or not a request is made,
determine to allow an oral presentation. The AAC generally grants a
request for oral presentation only if it determines that oral
presentation would be helpful or would otherwise be in the public
interest. If oral presentation is held, the institution will be allowed
to present its position on the issues raised in the appeal and to
respond to any questions from the AAC. The AAC may also
[[Page 12862]]
require that FDIC staff participate as the AAC deems appropriate.
J. Dismissal and Withdrawal
An appeal may be dismissed by the AAC if it is not timely filed, if
the legal or factual basis for the appeal is not discernable from the
appeal, or if the institution moves to withdraw the appeal.
K. Scope of Review and Decision
The AAC will review all submissions concerning an appeal, review
the final determination being appealed, consider any other matters it
deems in its discretion to be appropriate, and issue a written decision
within 60 days from the date the appeal is filed, or within 60 days
from oral presentation, if held.
L. Publication of Decisions
AAC decisions will be published. Published AAC decisions will be
redacted to avoid disclosure of exempt information. Published decisions
of the AAC may be cited as precedent in appeals to the AAC.
M. AAC Guidelines Generally
Appeals to the AAC will be governed by these guidelines. The AAC
will retain the discretion to waive any provision of the guidelines for
good cause; the AAC may adopt supplemental rules governing AAC
operations; the AAC may order that material be kept confidential; and
the AAC may consolidate similar appeals.
N. Effect on Deposit Insurance Assessment Payments
The use of the procedures set forth in these guidelines by an
insured institution will not affect, delay, or impede the obligation of
that institution to make timely payment of any deposit insurance
assessment.
Dated at Washington, DC, this 10th day of March, 2004.
By order of the Board of Directors.
Federal Deposit Insurance Corporation.
Robert E. Feldman,
Executive Secretary.
[FR Doc. 04-6112 Filed 3-17-04; 8:45 am]
BILLING CODE 6714-01-P
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