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Notice2025-13506

Guidelines for Appeals of Material Supervisory Determinations

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Published

July 18, 2025

Issuing agencies

Federal Deposit Insurance Corporation

Abstract

The Federal Deposit Insurance Corporation (FDIC) proposes to amend its Guidelines for Appeals of Material Supervisory Determinations to replace the existing Supervision Appeals Review Committee with an independent, standalone office that would consider and decide supervisory appeals.

Full Text

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<title>Federal Register, Volume 90 Issue 136 (Friday, July 18, 2025)</title>
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[Federal Register Volume 90, Number 136 (Friday, July 18, 2025)]
[Notices]
[Pages 33942-33949]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-13506]

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FEDERAL DEPOSIT INSURANCE CORPORATION

RIN 3064-ZA50

Guidelines for Appeals of Material Supervisory Determinations

AGENCY: Federal Deposit Insurance Corporation.

ACTION: Notice of guidelines; request for comments.

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SUMMARY: The Federal Deposit Insurance Corporation (FDIC) proposes to
amend its Guidelines for Appeals of Material Supervisory Determinations
to replace the existing Supervision Appeals Review Committee with an
independent, standalone office that would consider and decide
supervisory appeals.

DATES: Written comments must be received by the FDIC on or before
September 16, 2025 for consideration.

ADDRESSES: Interested parties are invited to submit written comments,
identified by RIN 3064-ZA50, by any of the following methods:
Agency Website: <a href="https://www.fdic.gov/federal-register-publications">https://www.fdic.gov/federal-register-publications</a>.
Follow instructions for submitting comments on the agency's website.
Email: <a href="/cdn-cgi/l/email-protection#b6d5d9dbdbd3d8c2c5f6f0f2fff598d1d9c0">[email&#160;protected]</a>. Include RIN 3064-ZA50 in the subject line
of the message.
Mail: Jennifer M. Jones, Deputy Executive Secretary, Attention:
Comments--RIN 3064-ZA50, Federal Deposit Insurance Corporation, 550
17th Street NW, Washington, DC 20429.
Hand Delivery/Courier: Comments may be hand-delivered to the guard
station at the rear of the 550 17th Street

[[Page 33943]]

NW building (located on F Street NW) on business days between 7 a.m.
and 5 p.m.
Public Inspection: Comments received, including any personal
information provided, may be posted without change to <a href="https://www.fdic.gov/federal-register-publications">https://www.fdic.gov/federal-register-publications</a>. Commenters should submit
only information they wish to make available publicly. The FDIC may
review, redact, or refrain from posting all or any portion of any
comment that it may deem to be inappropriate for publication, such as
irrelevant or obscene material. The FDIC may post only a single
representative example of identical or substantially identical
comments, and in such cases will generally identify the number of
identical or substantially identical comments represented by the posted
example. All comments that have been redacted, as well as those that
have not been posted, that contain comments on the merits of this
notice will be retained in the public comment file and will be
considered as required under all applicable laws. All comments may be
accessible under the Freedom of Information Act.

FOR FURTHER INFORMATION CONTACT: James Watts, Counsel, 202-898-6678,
<a href="/cdn-cgi/l/email-protection#2c465b4d58585f6c4a48454f024b435a">[email&#160;protected]</a>; Sarah Chung, Senior Attorney, 202-898-7376,
<a href="/cdn-cgi/l/email-protection#3645555e4358517650525f5518515940">[email&#160;protected]</a>; Legal Division.

SUPPLEMENTARY INFORMATION: The FDIC's Guidelines for Appeals of
Material Supervisory Determinations (Guidelines) provide the process by
which insured depository institutions (IDIs) may appeal material
supervisory determinations made by the FDIC.\1\ The Supervision Appeals
Review Committee (SARC) has been the final level of review of the
FDIC's material supervisory determinations. The FDIC is proposing to
revise the Guidelines to replace the SARC with an independent,
standalone office within the FDIC, known as the Office of Supervisory
Appeals (Office). The Office would have delegated authority to consider
and resolve appeals of material supervisory determinations.
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\1\ 87 FR 77112 (Dec. 16, 2022).
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I. Background

Section 309(a) of the Riegle Community Development and Regulatory
Improvement Act of 1994 (Riegle Act) required the FDIC (as well as the
other Federal banking agencies and the National Credit Union
Administration) to establish an ``independent intra-agency appellate
process'' to review material supervisory determinations.\2\ The Riegle
Act defines the term ``independent appellate process'' to mean ``a
review by an agency official who does not directly or indirectly report
to the agency official who made the material supervisory determination
under review.'' \3\ In the appeals process, the FDIC is required to
ensure that (1) an IDI's appeal of a material supervisory determination
is heard and decided expeditiously; and (2) appropriate safeguards
exist for protecting appellants from retaliation by agency
examiners.\4\
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\2\ 12 U.S.C. 4806(a).
\3\ 12 U.S.C. 4806(f)(2).
\4\ See 12 U.S.C. 4806(b).
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The Riegle Act defines ``material supervisory determinations'' to
include determinations relating to (1) examination ratings; (2) the
adequacy of loan loss reserve provisions; and (3) classifications on
loans that are significant to an institution.\5\ Expressly excluded
from this definition are decisions to appoint a conservator or receiver
for an IDI or to take prompt corrective action pursuant to section 38
of the Federal Deposit Insurance Act (FDI Act), 12 U.S.C. 1831o.\6\
Finally, section 309(g) of the Riegle Act expressly provides that the
requirement to establish an appeals process shall not affect the
authority of the Federal banking agencies to take enforcement or
supervisory actions against an IDI.\7\
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\5\ 12 U.S.C. 4806(f)(1)(A).
\6\ See 12 U.S.C. 4806(f)(1)(B).
\7\ See 12 U.S.C. 4806(g).
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On March 21, 1995, the FDIC's Board of Directors (Board) adopted
the Guidelines to implement section 309(a) and established the SARC to
consider and decide appeals of material supervisory determinations.\8\
Since that time, the SARC has been composed of FDIC Board members and
other senior FDIC officials.
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\8\ See 60 FR 15923 (Mar. 28, 1995).
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In January 2021, the FDIC adopted Guidelines that replaced the SARC
with an independent, standalone office within the FDIC, known as the
Office of Supervisory Appeals.\9\ The Office was granted delegated
authority to consider and resolve appeals of material supervisory
determinations and was staffed by reviewing officials with bank
supervisory or examination experience.
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\9\ See 86 FR 6880 (January 25, 2021).
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In May 2022, the FDIC adopted revised Guidelines that restored the
SARC as the final level of review of material supervisory
determinations made by the FDIC.\10\ Based on extensive experience over
many years, the FDIC believes that the Office should be reinstated in
order to promote and enhance the independence of the appeals process
and to ensure requisite expertise of reviewing officials.
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\10\ See 87 FR 30942 (May 20, 2022).
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II. Discussion of Guidelines

The FDIC is proposing to establish an Office of Supervisory Appeals
as the final level of review of material supervisory determinations
made by the FDIC, replacing the SARC in the appellate process. The FDIC
anticipates that the structure of the Office would be largely
consistent with that of the previous Office. The FDIC is also proposing
to make certain other enhancements to reflect its experience
administering the supervisory appeals process, as described below. In
other respects, including the timeline for the submission and review of
appeals, the proposed Guidelines would be consistent with the current
Guidelines.
The FDIC anticipates that an Office structure, like the one
established in 2021, could provide several advantages over the existing
supervisory appeals process and would address comments and concerns
articulated to the FDIC. For example, creating a standalone Office to
consider and resolve supervisory appeals, staffed with former industry
professionals and those with bank supervisory experience, would allow
the process to operate more independently and without perceived
conflicts of interest. In addition, establishing the Office within the
FDIC would continue to protect supervisory and confidential information
while still satisfying the FDIC's statutory requirement to have an
intra-agency appeals process. In addition, the proposal would ensure
that individuals who decide on appeals have a deep understanding of
banking and the supervisory process. These changes would facilitate a
robust, independent supervisory appeals process that would be
consistent over time.

Structure of the Office and Reviewing Officials

As it did in 2021, the FDIC is proposing to establish the Office as
a standalone office independent of the Divisions that make supervisory
determinations. The Office would be staffed by reviewing officials with
relevant experience, serving on term appointments. The Office would
report directly to the FDIC Chairperson's Office and would be granted
delegated authority from the Board to consider and resolve appeals.
When the FDIC previously established an Office of Supervisory
Appeals, the Guidelines required that reviewing officials be
individuals with bank supervisory or examination experience, such as
retired bank examiners, serving

[[Page 33944]]

on term appointments. The FDIC continues to believe direct experience
with the supervisory process is highly valuable for reviewing
officials. The FDIC recognizes this experience can be achieved through
both government and industry experience. Furthermore, it was the FDIC's
experience in 2021 that hiring only former government officials
resulted in a limited pool of candidates. Thus, in addition to former
government officials with supervisory experience, the FDIC will also
consider former bankers and other former industry professionals with
relevant experience to serve as reviewing officials. Reviewing
officials, as employees of the FDIC, will be part-time, intermittent
employees who have been cleared for conflicts of interest and are
subject to the FDIC's requirements for confidentiality. The FDIC may
also consider employees with relevant experience from other government
agencies to serve as reviewing officials on a part-time basis through
interagency agreement(s). Current FDIC employees will not be eligible
to serve in these roles, however. Based on past experience with respect
to staffing the Office, the FDIC plans to initiate the hiring process
in the near term so that the Office may be fully operational as soon as
the final Guidelines are in place.
When an appeal is submitted to the Office, a panel of three
reviewing officials would be assigned to consider the matter. Given the
value of experience with the supervisory process, at least one member
of any panel would be required to have bank supervisory experience.

Legal Support for the Office

The Legal Division would provide counsel to the Office and
generally advise the Office on FDIC policies and rules. To promote
independence, the Office would be advised by legal staff that were not
involved in making the material supervisory determinations under
review.
If an appeal seeks to change or modify FDIC policies or rules, or
raises a policy matter of first impression, the Legal Division would
provide notice, along with a written explanation, to the Office.
Afterwards, the Legal Division would refer the matter to the
Chairperson's Office.
In addition, the Legal Division would review decisions of the
Office for consistency with applicable laws, regulations, and policies
of the FDIC prior to their issuance. If the Legal Division determines
that an Office decision is contrary to a law, regulation, or FDIC
policy, the Legal Division would notify the Chairperson's Office of the
matter and the Office would be required to revise the decision to
conform with relevant laws, regulations, or policies. The Legal
Division would not exercise supervisory judgment or opine on the merits
of an appeal.
If an appeal raises procedural questions, including whether issues
raised by the institution are eligible for review, the appropriate
Division Director or the Office would refer such questions to the Legal
Division. The Legal Division would determine whether an appeal, or an
issue raised in an appeal, is ineligible for review if it fails to meet
the requirements in the Guidelines. The Legal Division would provide
notice, with a written explanation, to the Office if an appeal, or an
issue raised in an appeal, is deemed ineligible for review.

Burden of Proof and Standard of Review

The burden of proof as to all matters at issue in the appeal,
including timeliness of the appeal if timeliness is at issue, would
rest with the institution.
The proposed Guidelines retain the existing standard of review for
the Division Director. The Division Director would review the appeal by
considering whether the material supervisory determination is
consistent with applicable laws, regulations, and policy, and make his
or her own supervisory determination without deferring to the judgments
of either party.\11\ The Division Director would have discretion to
consider examination workpapers and other materials developed by staff
during an examination.
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\11\ The FDIC has previously noted that this may be considered a
de novo standard of review, but lays out with more specificity the
actual considerations to be applied. See 87 FR 64034 and 64038 (Oct.
21, 2022).
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The Office would review the appeal for consistency with the
policies (including regulations, guidance, policy statements,
examination manuals, and other written publications) of the FDIC and
the overall reasonableness of, and the support offered for, the
positions advanced. The Office's standard of review would align with
the Division Director's standard of review. Similar to the current SARC
Guidelines and the 2021 Office of Supervisory Appeals Guidelines, the
Office would make an independent supervisory determination. However,
unlike the current Guidelines or the 2021 Guidelines, the proposed
Guidelines would specify that the Office will make its determination
without deferring to the judgments of either party. This standard of
review would underscore the independence of the review by the Office,
subject to the reasonableness of the support for the positions advanced
by both parties.
The scope of the Office's review would be limited to the facts and
circumstances as they existed prior to, or at the time the material
supervisory determination was made, even if later discovered, and no
consideration would be given to any facts or circumstances that occur
or corrective action taken after the determination was made. As noted
above, the Office would not consider aspects of an appeal that seek to
change or modify FDIC policy or rules. Therefore, the Office could not
overturn a material supervisory determination if the result of such a
ruling would be inconsistent with the policies of the FDIC.

Formal Enforcement-Related Actions

Section 309 of the Riegle Act, which required the establishment of
an appellate process, also provides that ``[n]othing in this section
shall affect the authority of an appropriate Federal banking agency . .
. to take enforcement or supervisory action.'' \12\ To clarify how the
appellate and enforcement processes interact, the proposed Guidelines
would retain certain provisions, summarized below, specifically
addressing the appealability of formal enforcement actions and
determinations underlying formal enforcement actions.
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\12\ 12 U.S.C. 4806(g).
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The proposed Guidelines would continue to allow institutions to
appeal material supervisory determinations while preserving the FDIC's
ability to take enforcement action where appropriate. The proposed
Guidelines would define ``material supervisory determination'' to
exclude ``formal enforcement-related actions and decisions, including
determinations and the underlying facts and circumstances that form the
basis of a recommended or pending formal enforcement action.'' For
example, if a violation of law prompts an enforcement action against an
institution, neither the enforcement action nor the underlying
violation would be appealable through the supervisory appeals process;
however, the institution could contest those matters through the
administrative enforcement process.\13\
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\13\ In some instances, a determination such as an examination
rating might depend in part upon determinations that form the basis
for a formal enforcement action. In such cases, the institution may
still appeal the rating on grounds other than those that form the
basis of the formal enforcement action.
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For purposes of the proposed Guidelines, a formal enforcement
action would commence when the FDIC initiates a formal investigation,
issues a

[[Page 33945]]

notice of charges or notice of assessment, provides an institution with
a draft consent order, or provides written notice that the FDIC is
reviewing the facts and circumstances to determine if formal
enforcement action is merited. However, a formal enforcement action
would not suspend or affect a pending appeal that was previously
submitted.
The FDIC has, however, encountered issues in administering these
provisions of the Guidelines that it believes warrant further
consideration. First, the Guidelines' enforcement-related provisions
have been confusing to some institutions, leading to some uncertainty
as to which determinations are subject to appeal. Second, the
Guidelines provide for a piecemeal appeal in some instances by allowing
an institution to appeal certain determinations within the standard
timeframes established by the Guidelines and others only after a
decision is made on the enforcement action. Third, in many instances,
the facts underlying an enforcement action are relevant factors to
other material supervisory determinations (such as ratings downgrades),
but an institution that wants to appeal such determinations is unable
to include such facts as part of the record in an appeal. Finally, the
FDIC is concerned that because many enforcement actions result in a
stipulated order, an institution may not receive an independent review
of some supervisory determinations. Accordingly, the FDIC requests
comment on the provisions of the proposed Guidelines relating to formal
enforcement-related actions and decisions and how they might be
addressed in the context of material supervisory determinations that an
institution seeks to appeal.

Role of the Ombudsman

The Ombudsman currently serves as a non-voting member of the SARC.
The Ombudsman serves as a neutral liaison between the FDIC and
institutions, as provided by section 309 of the Riegle Act.\14\ Because
the FDIC sees value in the Ombudsman's perspective, the proposed
Guidelines would allow the Ombudsman to submit views to the panel for
consideration. In addition, consistent with the current Guidelines, the
proposed Guidelines would retain provisions regarding the Ombudsman's
neutral oversight of the process and to monitor the supervisory process
for retaliation.
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\14\ See 12 U.S.C. 4806(d).
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Ex Parte Communications

The current Guidelines include a provision on sharing of
information, requiring that information considered by the SARC be
timely shared with both parties to the appeal, subject to applicable
legal limitations on disclosure. In light of the Office structure and
the roles defined in the proposed Guidelines, this provision would
apply to materials submitted to the Office by either the relevant
Division or the appealing institution. The Ombudsman would also oversee
the sharing of information considered by the Office in connection with
an appeal.

Transition Period

Until the Office is fully operational, the current Guidelines will
continue to apply, and all appeals of Division Directors' decisions
will be reviewed by the SARC. Transition from SARC to the Office will
occur when the Office is fully operational, which will occur upon or
following issuance of the final revised Guidelines.

Request for Comment

The FDIC is requesting comment on all aspects of the proposed
Guidelines, including the provisions relating to formal enforcement-
related actions as explained above.

Regulatory Review

The Office of Information and Regulatory Affairs (OIRA) of the
Office of Management and Budget has reviewed this proposal and
determined that it does not constitute a ``significant regulatory
action'' for purposes of Executive Order 12866.
For the reasons set out in the preamble, the Federal Deposit
Insurance Corporation's Board of Directors proposes to adopt the
Guidelines for Appeals of Material Supervisory Determinations as set
forth below.

Guidelines for Appeals of Material Supervisory Determinations

A. Introduction

Section 309(a) of the Riegle Community Development and Regulatory
Improvement Act of 1994 (Pub. L. 103-325, 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.

B. Reviewing Officials

The Office of Supervisory Appeals (Office) will be staffed with
reviewing officials, hired for terms, who have bank supervisory or
examination experience or other relevant experience. Reviewing
officials will consider and decide appeals submitted to the Office in
panels of three reviewing officials selected by the Office who have no
conflicts of interest with respect to the appeal or the parties to the
appeal. At least one reviewing official on a panel will have bank
supervisory experience. Current government employees with relevant
experience may serve on a part-time basis. However, current FDIC
employees are not eligible.

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
institution's total capital;

[[Page 33946]]

(k) Determinations relating to violations of a statute or
regulation, including the severity of a violation, 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 303.11(f), 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 part 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 institution's 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 12 CFR parts 370, 371, and 381, and 12 CFR
360.10 of the FDIC's 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 and circumstances that form the
basis of a recommended or pending formal enforcement action.
(3) A formal enforcement-related action or decision commences, and
becomes unappealable, when the FDIC initiates a formal investigation
under 12 U.S.C. 1820(c) (Order of Investigation), issues a notice of
charges or a notice of assessment under 12 U.S.C. 1818 or other
applicable laws (Notice of Charges), provides the institution with a
draft consent order, or otherwise provides written notice to the
institution that the FDIC is reviewing the facts and circumstances
presented to determine if a formal enforcement action is merited under
applicable statutes or published enforcement-related policies of the
FDIC, including written notice of a referral to the Attorney General
pursuant to the Equal Credit Opportunity Act (ECOA) or a notice to the
Secretary of Housing and Urban Development (HUD) for violations of ECOA
or the Fair Housing Act (FHA). Such notice may be provided in the
transmittal letter accompanying a Report of Examination. For the
purposes of these Guidelines, remarks in a Report of Examination do not
constitute written notice that the FDIC is reviewing the facts and
circumstances presented to determine if a proposed enforcement action
is merited. Commencement of a formal enforcement-related action or
decision will not suspend or otherwise affect a pending request for
review or appeal that was submitted before the commencement of the
formal enforcement-related action or decision.
(4) Additional appeal rights:
(a) In the case of any written notice from the FDIC to the
institution that the FDIC is determining whether a formal enforcement
action is merited, the FDIC must issue an Order of Investigation, issue
a Notice of Charges, or provide the institution with a draft consent
order within 120 days of such a notice, or the most recent submission
of information from the institution, whichever is later, or appeal
rights will be made available pursuant to these Guidelines. If the FDIC
timely provides the institution with a draft consent order and the
institution rejects the draft consent order in writing, the FDIC must
issue an Order of Investigation or a Notice of Charges within 90 days
from the date on which the institution rejects the draft consent order
in writing or appeal rights will be made available pursuant to these
Guidelines. The FDIC may extend these periods, with the approval of the
FDIC Chairperson, after the FDIC notifies the institution that the
relevant Division Director is seeking formal authority to take an
enforcement action.
(b) In the case of a referral to the Attorney General for
violations of the ECOA, beginning on the date the referral is returned
to the FDIC, the FDIC must proceed in accordance with paragraph (a) of
this section, including within the specified timeframes, or appeal
rights will be made available pursuant to these Guidelines.
(c) In the case of providing notice to HUD for violations of the
ECOA or the FHA, beginning on the date the notice is provided, the FDIC
must proceed in accordance with paragraph (a) of this section,
including within the specified timeframes, or appeal rights will be
made available pursuant to these Guidelines.
(d) Written notification will be provided to the institution within
10 days of a determination that appeal rights have been made available
under this section.
(e) The relevant FDIC Division and the institution may mutually
agree to extend the timeframes in paragraphs (a), (b), and (c) of this
section if the parties deem it appropriate.

E. Good-Faith Resolution

An institution should make a good-faith effort to resolve any
dispute concerning a material supervisory determination with the on-
site examiner and/or the appropriate Regional Office. The on-site
examiner and the Regional Office will promptly respond to any concerns
raised by an institution regarding a material supervisory
determination. Informal resolution of disputes with the on-site
examiner and the appropriate Regional Office is encouraged, but seeking
such a resolution is not a condition to filing a request for review
with the appropriate Division, either DCP, RMS, or the Division of
Complex Institution Supervision and Resolution (CISR), or to filing a
subsequent appeal with the Office under these Guidelines. An
institution may also avail itself of the Ombudsman to attempt to reach
an agreeable outcome.

F. Filing a Request for Review With the Appropriate Division

(1) An institution may file a request for review of a material
supervisory determination with the Division that made the
determination, either the Director, DCP, the Director, RMS, or the
Director, CISR (Director or Division Director), 550 17th Street NW,
Room F-4076, Washington, DC 20429, within 60 calendar days following
the institution's

[[Page 33947]]

receipt of a report of examination containing a material supervisory
determination or other written communication of a material supervisory
determination. Requests for review also may be submitted
electronically. To ensure confidentiality, requests should be submitted
through <a href="http://securemail.fdic.gov">securemail.fdic.gov</a>, directing the message to
<a href="/cdn-cgi/l/email-protection#85c1ecf7e0e6f1eaf7d7e0f3ece0f2d7e0f4f0e0f6f1c5e3e1ece6abe2eaf3">[email&#160;protected]</a>. A request for review must be in writing
and must include:
(a) A detailed description of the issues in dispute, the
surrounding circumstances, the institution's position regarding the
dispute and any arguments to support that position (including citation
of any relevant statute, regulation, policy statement, or other
authority), how resolution of the dispute would materially affect the
institution, and whether a good-faith effort was made to resolve the
dispute with the on-site examiner and the Regional Office; and
(b) A statement that the institution's board of directors or senior
management has considered the merits of the request and has authorized
that it be filed. Senior management is defined as the core group of
individuals directly accountable to the board of directors for the
sound and prudent day-to-day management of the institution. If an
institution's senior management files an appeal, it must inform the
board of directors of the substance of the appeal before filing and
keep the board of directors informed of the appeal's status.
(2) Within 45 calendar days after receiving a request for review
described in paragraph (1) of this section, the Division Director will:
(a) Review the appeal, considering whether the material supervisory
determination is consistent with applicable laws, regulations, and
policy, make his or her own supervisory determination without deferring
to the judgments of either party, and issue a written determination on
the request for review, setting forth the grounds for that
determination; or
(b) Refer the request for review to the Office for consideration as
an appeal under Section G and provide written notice to the institution
that the request for review has been referred to the Office.
(3) No appeal to the Office will be allowed unless an institution
has first filed a timely request for review with the appropriate
Division Director.
(4) In any decision issued pursuant to paragraph (2)(a) of this
section, the Director will inform the institution of the 30-day time
period for filing with the Office and will provide the mailing address
for any appeal the institution may wish to file.
(5) The Division Director may request guidance from the Legal
Division as to procedural or other questions relating to any request
for review.

G. Appeal to the Office

An institution that does not agree with the written determination
rendered by the Division Director may appeal that determination to the
Office within 30 calendar days after the date of receipt of that
determination. Failure to file within the 30-day time limit may result
in denial of the appeal by the Office.
1. Filing With the Office
An appeal to the Office will be considered filed if the written
appeal is received by the FDIC within 30 calendar days after the date
of receipt of the Division Director's written determination or if the
written appeal is placed in the U.S. mail within that 30-day period.
The appeal should be sent to the address indicated on the Division
Director's determination being appealed, or sent via email to
<a href="/cdn-cgi/l/email-protection#723721212d33020217131e013214161b115c151d04">[email&#160;protected]</a>. An acknowledgment of the appeal will be provided
to the institution, and copies of the institution's appeal will be
provided to the Office of the Ombudsman and the appropriate Division
Director. Copies of all relevant materials related to an appeal will be
provided to the Office of the Ombudsman.
2. Contents of Appeal
The appeal should be labeled to indicate that it is an appeal to
the Office and should contain the name, address, and telephone number
of the institution and any representative, as well as a copy of the
Division Director's determination being appealed. If oral presentation
is sought, that request should be included in the appeal. If expedited
review is requested, the appeal should state the reason for the
request. Only matters submitted to the appropriate Division Director in
a request for review may be appealed to the Office. Evidence not
presented for review to the Division Director is generally not
permitted; such evidence may be submitted to the Office only if
approved by the reviewing panel and with a reasonable time for the
Division Director to review and respond. The institution should set
forth all of the reasons, legal and factual, why it disagrees with the
Division Director's determination. Nothing in this appellate process
shall create any discovery or other such rights.
3. Burden of Proof
The burden of proof as to all matters at issue in the appeal,
including timeliness of the appeal if timeliness is at issue, rests
with the institution.
4. Submission from the Division Director
The Ombudsman and the Division Director may submit views regarding
the appeal to the Office within 30 calendar days of the date on which
the appeal is received by the Office.
5. Oral Presentation
The Office will, if a request is made by the institution or by FDIC
staff, allow an oral presentation. The panel may hear oral
presentations in person, telephonically, electronically, or through
other means agreed upon by the parties. If an oral presentation is
held, the institution and FDIC staff will be allowed to present their
positions on the issues raised in the appeal and to respond to any
questions from the panel.
6. Consolidation, Dismissal, and Rejection
Appeals based upon similar facts and circumstances may be
consolidated for expediency. An appeal may be dismissed by the Office
if it is not timely filed, if the basis for the appeal is not
discernable from the appeal, or if the institution moves to withdraw
the appeal. The Office will decline to consider an appeal if the
institution's right to appeal is not yet available under section D(4),
above.
7. Scope of Review and Decision
The panel will be an appellate body and will make independent
supervisory determinations. The panel will review the appeal for
consistency with the policies (including regulations, guidance, policy
statements, examination manuals, and other written publications) of the
FDIC and the overall reasonableness of, and the support offered for,
the positions advanced. The panel will make its own supervisory
determination without deferring to the judgments of either party. The
panel's review will be limited to the facts and circumstances as they
existed prior to, or at the time the material supervisory determination
was made, even if later discovered, and no consideration will be given
to any facts or circumstances that occur or corrective action taken
after the determination was made. The panel will not consider any
aspect of an appeal that seeks to change or modify existing FDIC rules
or policy, and may not overturn a material supervisory

[[Page 33948]]

determination if the result of such a ruling would be inconsistent with
the policies of the FDIC. The panel will notify the institution, in
writing, of its decision concerning the disputed material supervisory
determination(s) within 45 days after the date the panel meets to
consider the appeal, which meeting will be held within 90 days after
either the date of the filing of the appeal or the date that the
Division Director refers the appeal to the Office.
8. Role of the Legal Division
The Legal Division will provide counsel to the Office and generally
advise the Office on FDIC policies and rules. If an appeal seeks to
change or modify FDIC policies or rules, or raises a policy matter of
first impression, the Legal Division will provide notice, along with a
written explanation, to the Office, and then, after such notice is
provided, refer the matter to the Chairperson's Office.
The Legal Division will review decisions of the Office for
consistency with applicable laws, regulations, and policies of the FDIC
prior to their issuance. If the Legal Division determines that a
decision is contrary to a law, regulation, or policy of the FDIC, the
Legal Division will notify the Chairperson's Office of the matter and
the Office will revise the decision to conform with relevant laws,
regulations, or policies.
If an appeal raises procedural questions, including whether issues
raised by the institution are eligible for review, the appropriate
Division Director or the Office will refer such matters to the Legal
Division. The Legal Division may determine whether an appeal, or an
issue raised in an appeal, is ineligible for review if it fails to meet
the requirements in the Guidelines. The Legal Division will provide
notice, with a written explanation, to the Office if an appeal, or an
issue raised in an appeal, is deemed ineligible for review.
9. Sharing of Appeal Materials
Materials concerning an appeal submitted to the Office by either
the relevant Division or an appealing institution will be shared with
the other party to the appeal, subject to applicable legal limitations
on disclosure, on a timely basis. The Ombudsman will verify that both
parties have received these materials.

H. Publication of Decisions

Decisions of the Office will be published as soon as practicable,
and the published decisions will be redacted to avoid disclosure of the
name of the appealing institution and any information exempt from
disclosure under the Freedom of Information Act and the FDIC's document
disclosure regulations found in 12 CFR part 309. In cases in which
redaction is deemed insufficient to prevent improper disclosure,
published decisions may be presented in summary form. Published SARC or
Office decisions may be cited as precedent in appeals to the Office.
Annual reports on the Office's decisions and Division Directors'
decisions with respect to institutions' requests for review of material
supervisory determinations also will be published.

I. Appeal Guidelines Generally

Appeals to the Office will be governed by these Guidelines. The
Office, with the concurrence of the Legal Division, will retain
discretion to waive any provision of the Guidelines for good cause.
Supplemental rules governing the Office's operations may be adopted.
Institutions may request extensions of the time period for
submitting appeals under these Guidelines from either the appropriate
Division Director or the Office, as appropriate. If a filing under
these Guidelines is due on a Saturday, Sunday, or a Federal holiday,
the filing may be made on the next business day.
Institutions may request a stay of a supervisory action or
determination from the Division Director while an appeal of that
determination is pending. The request must be in writing and include
the reason(s) for the stay. The Division Director has discretion to
grant a stay and will generally decide whether to grant a stay within
21 days of receiving the institution's request, providing the
institution with the reason(s) for his or her decision in writing. A
stay may be granted subject to conditions, including time limitations,
where appropriate.

J. Limitation on Agency Ombudsman

Except as otherwise provided by these Guidelines, the subject
matter of a material supervisory determination for which either an
appeal to the Office has been filed, or a final Office decision issued,
is not eligible for consideration by the Ombudsman.

K. Coordination With State Regulatory Authorities

In the event that a material supervisory determination subject to a
request for review is the joint product of the FDIC and a State
regulatory authority, the Director, DCP, the Director, RMS, or the
Director, CISR, as appropriate, will promptly notify the appropriate
State regulatory authority of the request, provide the regulatory
authority with a copy of the institution's request for review and any
other related materials, and solicit the regulatory authority's views
regarding the merits of the request before making a determination. In
the event that an appeal is subsequently filed with the Office, the
Office will notify the institution and the State regulatory authority
of its decision. Once the Office has issued its determination, any
other issues that may remain between the institution and the State
regulatory authority will be left to those parties to resolve.

L. Effect on Supervisory or Enforcement Actions

The use of the procedures set forth in these Guidelines by any
institution will not affect, delay, or impede any formal or informal
supervisory or enforcement action in progress during the appeal or
affect the FDIC's authority to take any supervisory or enforcement
action against that institution.

M. Effect on Applications or Requests for Approval

Any application or request for approval made to the FDIC by an
institution that has appealed a material supervisory determination that
relates to, or could affect the approval of, the application or request
will not be considered until a final decision concerning the appeal is
made unless otherwise requested by the institution.

N. Prohibition on Examiner Retaliation

FDIC policy prohibits any retaliation, abuse, or retribution by an
agency examiner or any FDIC personnel against an institution. Such
behavior against an institution that appeals a material supervisory
determination constitutes unprofessional conduct and will subject the
examiner or other personnel to appropriate disciplinary or remedial
action. In light of this important principle, the Ombudsman will
monitor the supervision process following an institution's submission
of an appeal under these Guidelines. The Ombudsman will report to the
Board on these matters periodically.
Institutions that believe they have been retaliated against are
encouraged to contact the Regional Director for the appropriate FDIC
region. Any institution that believes or has any evidence that it has
been subject to retaliation may file a complaint with the Director,
Office of the Ombudsman, Federal Deposit Insurance Corporation, 3501
Fairfax Drive, Suite E-2022, Arlington, Virginia, 22226, explaining the
circumstances and the basis for such belief or evidence and requesting
that the complaint be investigated and

[[Page 33949]]

appropriate disciplinary or remedial action taken. The Office of the
Ombudsman will work with the appropriate Division Director to resolve
the allegation of retaliation.

Federal Deposit Insurance Corporation.
By order of the Board of Directors.
Dated at Washington, DC, July 15, 2025.
Debra A. Decker,
Executive Secretary.
[FR Doc. 2025-13506 Filed 7-17-25; 8:45 am]
BILLING CODE 6714-01-P

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This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.