Federal Deposit Insurance Corporation consults on replacing the Supervision Appeals Review Committee with an Office of Supervisory Appeals

The Federal Deposit Insurance Corporation (FDIC) has opened a consultation on proposed amendments to its Guidelines for Appeals of Material Supervisory Determinations that would replace the current Supervision Appeals Review Committee (SARC) with a new, standalone Office of Supervisory Appeals as the final level of review for material supervisory determinations. The proposed changes would apply to all FDIC-supervised financial institutions. Under the proposal, the Office would be independent of the FDIC divisions that make supervisory determinations, and institutions could appeal to the Office after the relevant Division Director has reviewed the determination. Reviewing panels would be staffed by officials with direct supervisory-process experience and could include former government officials, former bankers, and other former industry professionals, with at least one panel member required to have bank supervisory experience; confidentiality and conflict-of-interest requirements would apply. The Office would make its own supervisory determination without deferring to either party’s judgment, based on the reasonableness of and support for the positions advanced. Comments are due 60 days after publication in the Federal Register. The FDIC expects the Office to be fully operational upon or following issuance of the final revised Guidelines and plans to begin hiring in the near term; until then, the existing Guidelines remain in effect and SARC continues to review appeals of Division Directors’ decisions.