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Federal Register / Vol. 86, No. 14 / Monday, January 25, 2021 / Notices assessment or to open an order of investigation within those 90 days, the IDIs supervisory appeal rights to the Office would be made available. The IDI
would have 60 days to file an appeal, consistent with the standard timeline following a material supervisory determination.
The FDIC proposed that these time periods could be extended with the approval of the Chairpersons Office, or with the mutual agreement of both parties. The FDIC asked commenters whether this timeline would be too restrictive for some cases, and whether commenters expect to invoke the provisions allowing for an extension.
Several commenters stated that the proposed timeframe was appropriate. A
bank suggested that instead of the proposed extension provisions, the process should permit both the FDIC
and the institution to request a one-time extension of a deadline for 30 days. The FDIC believes that limiting the parties to a one-time 30-day extension could hinder the parties efforts to settle an enforcement action, and is therefore finalizing these provisions as proposed.
Transition Period The FDIC expects that a period of time will be necessary to establish and staff the Office. The current Guidelines, which permit appeals of Division Directors decisions to the SARC, will apply until the Office is fully operational. The FDIC will publish a notice to inform institutions when this occurs.
For the reasons set out in the preamble, the Federal Deposit Insurance Corporations Board of Directors adopts the Guidelines for Appeals of Material Supervisory Determinations as set forth below.
Guidelines for Appeals of Material Supervisory Determinations
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A. Introduction Section 309a of the Riegle Community Development and Regulatory Improvement Act of 1994
Pub. L. 103325, 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 Guidelines for Appeals of Material Supervisory Determinations 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
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for the review of material supervisory determinations by the Office of Supervisory Appeals Office.
B. Reviewing Officials The Office will be staffed with reviewing officials who have bank supervisory or examination experience.
Reviewing officials will be hired for terms, and only former, rather than current, government officials will be eligible to serve as reviewing officials.
Reviewing officials will consider and decide appeals submitted to the Office.
Each appeal will be reviewed and decided by a panel of either three or five reviewing officials who have no conflicts of interest with respect to the appeal or the parties to the appeal. All decisions related to which reviewing officials will serve on which panels will be decided by the Office.
C. Institutions Eligible To Appeal The Guidelines apply to the insured depository institutions that the FDIC
supervises i.e., insured State nonmember banks, insured branches of foreign banks, and state savings associations, and to other insured depository institutions for 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.
1 Material supervisory determinations include:
a CAMELS ratings under the Uniform Financial Institutions Rating System;
b IT ratings under the Uniform Rating System for Information Technology;
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 appropriateness of loan loss reserve provisions;
j Classifications of loans and other assets in dispute the amount of which, individually or in the aggregate, exceeds 10 percent of an institutions total capital;

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k Determinations relating to violations of a statute or regulation that may affect 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 Act Regulation Z restitution;
m Filings made pursuant to 12 CFR
303.11f, 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, 12 U.S.C. 1829 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 the Division of Depositor and Consumer Protection DCP or the Division of Risk Management Supervision RMS;
n Decisions to initiate informal enforcement actions such as memoranda of understanding;
o Determinations regarding the institutions level of compliance with a formal enforcement action; however, if the FDIC determines that the lack of compliance with an existing formal enforcement action requires an additional formal enforcement action, the proposed new enforcement action is not appealable;
p Matters requiring board attention;
and q Any other supervisory determination unless otherwise not eligible for appeal that may affect the capital, earnings, operating flexibility, or capital category for prompt corrective action purposes of an institution, or that otherwise affects the nature and level of supervisory oversight accorded an institution.
2 Material supervisory determinations do not include:
a Decisions to appoint a conservator or receiver for an insured depository institution, and other decisions made in furtherance of the resolution or receivership process, including but not limited to determinations pursuant to parts 370, 371, and 381, and 360.10 of the FDICs rules and regulations;
b Decisions to take prompt corrective action pursuant to section 38
of the FDI 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; and d Formal enforcement-related actions and decisions, including determinations and the underlying facts
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