Agency restores SARC for supervisory appeals, kicking to curb 2021 ‘Supervision Appeals Review Committee’

The final level of review in the federal insurer of bank deposits supervisory appeals process is restored – as it was before last year – to an independent intra-agency appeals process to review material supervisory determinations made at banks that it supervises, the agency said in revised guidelines issued, and effective, Tuesday.

The Federal Deposit Insurance Corp. (FDIC) said its Supervision Appeals Review Committee (SARC) is restored under its revised Guidelines for Appeals of Material Supervisory Determinations. The SARC was mandated under a 1994 law (the Riegle Community Development and Regulatory Improvement Act).

The agency said it is seeking comments, over 30 days, on the guidelines revisions.

In a financial institution letter (FIL-22-2021), the agency said the SARC generally replaces the Office of Supervisory Appeals as the final level of review in the FDIC’s supervisory appeals process. The agency said that consistent with the 2021 composition of the SARC, it will include: one inside member of the FDIC’s board of directors (serving as chairperson); a deputy or special assistant to each of the other “inside” board members (that is, those appointed specifically to the FDIC Board, and not members by way of their positions as leaders at the Consumer Financial Protection Bureau [CFPB] and the Office of the Comptroller of the Currency [OCC]); and the general counsel as a non-voting member.

Other than restoring the SARC as the final level of review, most aspects of the agency’s supervisory appeals process remain the same.

“The revised Guidelines continue to encourage institutions to make good-faith efforts to resolve disputes with on-site examiners and/or the appropriate Regional Office,” the agency said in the letter. “The Guidelines also continue to provide for review by the appropriate Division Director before submission of an appeal to the SARC.”

The agency added that the revised guidelines “expressly permit” electronic submission of appeals and provide email addresses that institutions may use to submit a request for review to the appropriate division director or an appeal to the SARC.

Amendments to Guidelines for Appeals of Material Supervisory Determinations