ICBA told the FDIC that in revising the agency’s supervisory appeals process, the FDIC should ensure that reviewers have significant community banking experience.
Details: In a comment letter on the agency’s proposed Guidelines for Appeals of Material Supervisory Determinations, ICBA said it preferred a Federal Financial Institutions Examination Council appeals office but supported the proposed enhancements to the FDIC’s internal supervisory appeals process. Specifically, ICBA:
Recommended requiring each review panel to include at least one reviewing official with significant community bank expertise.
Urged the FDIC to clarify the burden of proof by applying a preponderance of the evidence standard.
Requested the FDIC publish informational materials explaining the supervisory appeals process.
Background: The FDIC in July proposed amending its guidelines for appealing material supervisory determinations to make the process more independent. The FDIC proposal would create the Office of Supervisory Appeals—an independent, standalone office within the FDIC—to replace the existing Supervision Appeals Review Committee, which is typically composed of FDIC board members and other senior FDIC officials.
ICBA Advocacy:
ICBA has long called for reforms to the FDIC appeals process in response to community banker concerns, noting the SARC is not an independent or impartial decision-making body.
ICBA supported the creation of the Office of Supervisory Appeals to replace the SARC, strongly opposed the FDIC’s 2022 decision to summarily restore the SARC as the final level of review in the agency’s supervisory appeals process, and said proposed updates to its overhaul fell short of needed reforms.
Separately, ICBA has supported the FAIR Exams Access Act, which would create an Independent Examination Review Director within the FFIEC to address examination complaints and procedures.