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Federal Deposit
Insurance Corporation

Each depositor insured to at least $250,000 per insured bank

Transparency & Accountability - Bank Examinations: Requests for Review of Material Supervisory Determinations

Requests for Review of Material Supervisory Determinations
Decisions Issued from January 1, 2018 to June 30, 2018


On July 18, 2017, the FDIC Board of Directors adopted revised Guidelines for Appeals of Material Supervisory Determinations, which included certain reporting requirements for requests for review of material supervisory determinations that are acted on by the applicable division director. The table below provides detailed information on the requests for review decisions issued between January 1, 2018, and June 30, 2018.

Transparency & Accountability - Bank Examinations: Requests for Review of Material Supervisory Determinations
Division Date Determination(s) Contested Decision
Division of Risk Management Supervision 2/26/2018 Classification of two credits from the August 2017 Shared National Credit (SNC) Review and Appeal Program, including the nonaccrual treatment of one of the credits. The Director determined that numerous well-defined weaknesses supported the assigned adverse classifications. Recent operating results, as well as projections for revenues, income, and cash flow, reflected inadequate repayment capacity in light of the borrowers' debt positions. Secondary repayment sources and related support were also not sufficient to change the assigned adverse classifications.
Division of Risk Management Supervision 6/4/2018 Management and Liquidity ratings. Determination that deposits from homeowners associations and deposits associated with prepaid debit cards are brokered deposits. Characterization of the chief executive officer as a dominant official. The Director determined that the Management component rating should be upgraded because although the board and senior management have not fully addressed persistent risk management issues, these deficiencies do not appear to threaten the viability of the Bank at this time. The Director determined the assigned Liquidity rating was appropriate and concluded that homeowners association deposits should not be reported as brokered deposits if they are acquired directly from the association. Based upon the facts and circumstances presented, deposits tied to prepaid debit cards facilitated by a third party were determined to be brokered deposits. The Director determined that the record supported the determination of a dominant officer as described by the FDIC's Risk Management Manual of Examination Policies.

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