Guidelines for Appeals of Material Supervisory Determinations, 51441-51446 [2016-18507]
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Federal Register / Vol. 81, No. 150 / Thursday, August 4, 2016 / Notices
OMB Number: 3064–0070.
Affected Public: Insured financial
institutions.
Annual Number of Respondents: 752.
Frequency of Response: On occasion.
Estimated Time per Response: 10
hours.
Total Annual Burden: 7,520 hours.
General Description: Insured
institutions must obtain the written
consent of the FDIC before establishing
or moving a main office or branch.
2. Title: Application for Consent to
Reduce or Retire Capital.
OMB Number: 3064–0079.
Affected Public: Insured state
nonmember banks and state savings
associations.
Frequency of Response: On occasion.
Estimated Number of Respondents:
80.
Estimated Time per Response: 11
hours.
Estimated Total Annual Burden: 880
hours.
General Description: Insured state
nonmember banks proposing to change
their capital structure must submit an
application containing information
about the proposed change to obtain
FDIC’s consent to reduce or retire
capital.
3. Title: Appraisals Standards.
OMB Number: 3064–01103.
Affected Public: Insured state
nonmember banks and state savings
associations.
Estimated Number of Respondents:
3,947.
Frequency of Response: On occasion.
Estimated Number of Responses per
Respondent: 105.6.
Estimated Time per Response: .75
hours.
Estimated Total Annual Burden:
312,602 hours.
General Description: FIRREA directs
the FDIC to prescribe appropriate
performance standards for real estate
appraisals connected with federally
related transactions under its
jurisdiction. This information collection
is a direct consequence of the statutory
requirement.
4. Title: CRA Sunshine.
OMB Number: 3064–0139.
Affected Public: Insured state
nonmember banks and state savings
associations and their affiliates and
nongovernmental entities and persons.
Estimated Number of Respondents:
16.
Frequency of Response: On occasion.
Estimated Time per Response: 8.625
hours.
Estimated Total Annual Burden: 138
hours.
General Description: This collection
implements a statutory requirement
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imposing reporting, disclosure and
recordkeeping requirements on some
community reinvestment-related
agreements between insured depository
institutions or affiliates, and
nongovernmental entities or persons.
5. Title: Asset Sales Forms.
OMB Number: 3064–0192.
Affected Public: Insured state
nonmember banks and their affiliates
and nongovernmental entities and
persons.
Frequency of Response: On occasion.
Estimated Number of Respondents:
600 hours.
Estimated Time per Response: .50
hours.
Estimated Total Annual Burden: 300
hours.
General Description: The FDIC uses
the Purchaser Eligibility Certification
form, FDIC Form No. 7300/06, to
identify prospective bidders who are not
eligible to purchase assets of failed
institutions from the FDIC. Specifically,
section 11(p) of the Federal Deposit
Insurance Act prohibits the sale of
assets of failed institutions to certain
individuals or entities that profited or
engaged in wrongdoing at the expense
of those failed institutions, or seriously
mismanaged those failed institutions.
Request for Comment
Comments are invited on: (a) Whether
the collection of information is
necessary for the proper performance of
the FDIC’s functions, including whether
the information has practical utility; (b)
the accuracy of the estimates of the
burden of the information collection,
including the validity of the
methodology and assumptions used; (c)
ways to enhance the quality, utility, and
clarity of the information to be
collected; and (d) ways to minimize the
burden of the information collection on
respondents, including through the use
of automated collection techniques or
other forms of information technology.
All comments will become a matter of
public record.
Dated at Washington, DC, this 1st day of
August, 2016.
Federal Deposit Insurance Corporation.
Robert E. Feldman,
Executive Secretary.
[FR Doc. 2016–18506 Filed 8–3–16; 8:45 am]
BILLING CODE 6714–01–P
FEDERAL DEPOSIT INSURANCE
CORPORATION
Guidelines for Appeals of Material
Supervisory Determinations
Federal Deposit Insurance
Corporation.
AGENCY:
PO 00000
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ACTION:
51441
Notice and request for comment.
The Federal Deposit
Insurance Corporation (‘‘FDIC’’)
proposes to amend its Guidelines for
Appeals of Material Supervisory
Determinations (Guidelines) so that
institutions have additional avenues of
redress with respect to these
determinations and for greater
consistency with the appeals process of
the other Federal banking agencies.
Consistent with Section 309(a) of the
Riegle Community Development and
Regulatory Improvement Act of 1994
(‘‘Riegle Act’’), the FDIC, in 1995,
established its Supervision Appeals
Review Committee (SARC), an
independent intra-agency appellate
process to review appeals by
institutions of ‘‘material supervisory
determinations,’’ and has amended the
Guidelines from time to time, as
appropriate.
DATES: Written comments on the
Proposal must be received by the FDIC
on or before October 3, 2016 for
consideration.
ADDRESSES: Interested parties are
invited to submit written comments to
the FDIC by any of the following
methods:
• Federal eRulemaking Portal: https://
www.regulations.gov. Follow the
instructions for submitting comments.
• Agency Web site: https://www.fdic.
gov/regulations/laws/federal/ . Follow
the instructions for submitting
comments.
• Email: comments@fdic.gov. Include
‘‘Guidelines for Appeals of Material
Supervisory Determinations’’ in the
subject line of the message.
• Mail: Robert E. Feldman, Executive
Secretary, Attention: Comments/Legal
ESS, Federal Deposit Insurance
Corporation, 550 17th Street NW.,
Washington, DC 20429.
• Hand Delivery: Comments may be
hand-delivered to the guard station
located at the rear of the FDIC’s 550
17th Street building (accessible from F
Street) on business days between 7 a.m.
and 5 p.m.
• Public Inspection: All comments
received, including any personal
information provided, will be posted
generally without change to https://
www.fdic.gov/regulations/laws/
federal/. Comments may be inspected
and photocopied in the FDIC Public
Information Center, Room E–1005, 3501
North Fairfax Drive, Arlington, VA
22226 between 9 a.m. and 4:00 p.m. on
business days.
FOR FURTHER INFORMATION CONTACT:
Christopher Newbury, Associate
Director, Division of Risk Management
SUMMARY:
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Supervision, (202) 898–3504; Sylvia
Plunkett, Senior Deputy Director,
Division of Depositor and Consumer
Protection, (202) 898–6929; and James
Watts, Senior Attorney, Legal Division,
(202) 898–6678.
SUPPLEMENTARY INFORMATION: The FDIC
is publishing for notice and comment
proposed amendments to the Guidelines
for Appeals of Material Supervisory
Determinations. The FDIC considers it
desirable in this instance to seek
comments regarding these amendments
to the Guidelines, although notice and
comment is not required. The proposed
amendments would be effective upon
adoption so that institutions have
additional avenues of redress with
respect to material supervisory
determinations.
The proposed amendments would (1)
permit appeal of the level of compliance
with an existing formal enforcement
action; (2) provide that a formal
enforcement-related action or decision
does not affect an appeal that is pending
under the Guidelines; (3) make
additional appeal rights available
pursuant to the Guidelines with respect
to material supervisory determinations
in certain circumstances; and (4) make
other limited technical and conforming
amendments.
Background
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 FDIC (as
well as the other Federal banking
agencies and the National Credit Union
Administration Board) to establish an
independent intra-agency appellate
process to review material supervisory
determinations. 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. In the
appeals process, the FDIC is required to
ensure that: (1) An appeal of a material
supervisory determination by an
insured depository institution is heard
and decided expeditiously; and (2)
appropriate safeguards exist for
protecting appellants from retaliation by
agency examiners.
The term ‘‘material supervisory
determinations’’ is defined in the Riegle
Act 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. The Riegle Act specifically
excludes from the definition of
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‘‘material supervisory determinations’’ a
decision to appoint a conservator or
receiver for an insured depository
institution or to take prompt corrective
action pursuant to section 38 of the
Federal Deposit Insurance Act (‘‘FDI
Act’’), 12 U.S.C. 1831o. Finally, section
309(g) (12 U.S.C. 4806(g)) expressly
provides that the Riegle Act’s
requirement to establish an appeals
process shall not affect the authority of
the Federal banking agencies to take
enforcement or supervisory actions
against an institution.
On December 28, 1994, the FDIC
published in the Federal Register, for a
30-day comment period, a notice of and
request for comments on proposed
Guidelines for Appeals of Material
Supervisory Determinations
(‘‘Guidelines’’) (59 FR 66965.) In the
proposed Guidelines, the FDIC
proposed that the term ‘‘material
supervisory determinations,’’ in
addition to the statutory exclusions
noted above, also should not include:
(1) Determinations for which other
appeals procedures exist (such as
determinations relating to deposit
insurance assessment risk
classifications); (2) decisions to initiate
formal enforcement actions under
section 8 of the FDI Act; (3) decisions
to initiate informal enforcement actions
(such as memoranda of understanding);
(4) determinations relating to a violation
of a statute or regulation; and (5) any
other determinations not specified in
the Riegle Act as being eligible for
appeal.
Commenters to the proposed
Guidelines suggested that the proposed
limitations on determinations eligible
for appeal were too restrictive. In
response to comments received, the
FDIC modified the proposed Guidelines.
The FDIC added a final clarifying
sentence to the listing of
‘‘Determinations Not Eligible for
Appeal’’ in the Guidelines as follows:
‘‘The FDIC recognizes that, although
determinations to take prompt
corrective action or initiate formal or
informal enforcement actions are not
appealable, the determinations upon
which such actions may be based (e.g.,
loan classifications) are appealable
provided they otherwise qualify.’’ (60
FR 15929, March 28, 1995.) On March
21, 1995, the FDIC’s Board of Directors
adopted the proposed Guidelines. (60
FR 15923.)
On March 18, 2004, the FDIC
published in the Federal Register, for a
30-day comment period, a notice and
request for comments regarding
proposed revisions to the Guidelines,
which would change the composition
and procedures of the SARC. (69 FR
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12855.) On July 9, 2004, the FDIC
published in the Federal Register a
notice of guidelines which, effective
June 28, 2004, adopted the revised
Guidelines, largely as proposed. (69 FR
41479.)
On May 27, 2008, the FDIC published
in the Federal Register, for a 60-day
comment period, a notice and request
for comments regarding proposed
revisions to the Guidelines. (73 FR
30393.) On September 23, 2008, the
FDIC published in the Federal Register
a notice of guidelines which, effective
September 16, 2008, adopted revised
Guidelines modifying the supervisory
determinations eligible for appeal to
eliminate the ability of an FDICsupervised institution to file an appeal
with the SARC for determinations or the
facts and circumstances underlying a
recommended or pending formal
enforcement-related action or decision,
including the initiation of an
investigation. The FDIC noted that these
amendments better aligned the SARC
appellate process with the material
supervisory determinations appeals
procedures at the other Federal banking
agencies. (73 FR 54822.)
On April 19, 2010, the FDIC
published in the Federal Register a
notice of guidelines which, effective
April 13, 2010, adopted revised
Guidelines extending the decision
deadline for requests for review and
clarifying the decisional deadline for
written decisions by the SARC. (75 FR
20358.)
On March 23, 2012, the FDIC
published in the Federal Register a
notice of guidelines which, effective
March 20, 2012, adopted revised
Guidelines that included technical and
ministerial revisions to reflect changes
in the organization of the FDIC’s Board,
of its offices and divisions, and in the
categories of institutions that it
supervises. (77 FR 17055.)
Proposed Amendments
As noted above, the FDIC adopted
amendments to the Guidelines in 2008
modifying the supervisory
determinations eligible for appeal to
eliminate the ability of an FDICsupervised institution to file an appeal
with the SARC for determinations or the
facts and circumstances underlying a
recommended or pending formal
enforcement-related action or decision,
including the initiation of an
investigation. However, based on the
FDIC’s experience in administering the
current appellate process, the FDIC
believes that there are changes that
could be beneficial to allow for
additional avenues of redress with
respect to certain material supervisory
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determinations. In considering changes,
the FDIC also reviewed the current
policies at the OCC and the Board of
Governors of the Federal Reserve
System. Accordingly, the FDIC is
proposing amendments to the
Guidelines that would expand
institutions’ appellate rights under
certain circumstances as well as
promote greater consistency with the
other Federal banking agencies.
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I. Amendment of Material Supervisory
Determinations Eligible for Review
Currently, the Guidelines state that
‘‘material supervisory determinations’’
subject to appeal do not include
determinations regarding compliance
with an existing formal enforcement
action. The proposed amendment to the
Guidelines would allow determinations
regarding an institution’s level of
compliance with an existing formal
enforcement action to be appealed;
however, if the FDIC determines that
lack of compliance with an existing
enforcement action requires additional
enforcement action, the proposed new
enforcement action would not be
appealable. This proposed amendment
to the Guidelines would enhance
institutions’ opportunities to obtain an
independent review of supervisory
determinations, promoting the goals of
the Riegle Act in a manner consistent
with the statute’s requirement that the
appeals process shall not affect the
authority of the Federal banking
agencies to take enforcement or
supervisory actions against an
institution.1
The FDIC notes that, similar to the
proposed amendments, the current
appeals process of the OCC allows
institutions to appeal conclusions
regarding their level of compliance with
a formal enforcement action; however, if
the OCC determines that the lack of
compliance with an existing
enforcement action requires additional
enforcement action, the proposed new
enforcement action is not appealable.
See OCC Bulletin 2013–15 (June 7,
2013).
In addition, the proposed Guidelines
would remove from the list of
determinations that are not appealable
the decision to initiate an informal
enforcement action, such as a
Memorandum of Understanding. This
would better conform the FDIC’s
Guidelines to the current appeals
process of the Office of the Comptroller
of the Currency.
1 12
U.S.C. 4806(g).
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II. Commencement of Formal
Enforcement Action
Currently, the Guidelines state that a
formal enforcement-related action or
decision commences, and therefore
becomes unappealable, when the FDIC
initiates a formal investigation under 12
U.S.C. 1820(c) or provides written
notice to the bank indicating its
intention to pursue available formal
enforcement remedies under applicable
statutes or published enforcementrelated policies of the FDIC, including
written notice of a referral to the
Attorney General pursuant to ECOA or
a notice to HUD for violations of the
FHA or ECOA. The proposed
amendments would provide that 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) or provides written notice to the
bank of a recommended or proposed
formal enforcement action under
applicable statutes or published
enforcement-related policies of the
FDIC, including written notice of a
referral to the Attorney General
pursuant to the ECOA or a notice to
HUD for violations of the FHA or ECOA.
This change would make the Guidelines
more consistent with the process of the
OCC.
The proposed amendments also
would provide that a formal
enforcement-related action or decision
does not affect the appeal of any
material supervisory determination that
is pending under the Guidelines.
III. Additional SARC Appeal Rights
The proposed amendments would
make SARC appeal rights available with
respect to material supervisory
determinations in certain
circumstances. In particular, SARC
appeal rights would be made available
pursuant to the Guidelines where the
FDIC has provided an institution with
written notice of a recommended or
proposed formal enforcement action,
but does not pursue an enforcement
action within 120 days of the written
notice. The FDIC may extend this 120day period, with the approval of the
SARC Chairperson, if the FDIC notifies
the institution that the relevant Division
Director is seeking formal authority to
take an enforcement action.
In addition, SARC appeal rights
would be made available in the case of
a referral to the Attorney General for
certain violations of the ECOA, if the
Attorney General returns the matter to
the FDIC and the FDIC does not initiate
an enforcement action within 120 days
of the date the referral is returned.
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51443
SARC appeal rights would also be
made available if the FDIC provides
notice to HUD for violations of the
ECOA or FHA, but does not initiate an
enforcement action within 120 days of
the date the notice is provided.
Under the proposal, these additional
appeal rights may be extended if the
FDIC and the institution mutually agree
and deem it appropriate in order to
reach a mutually agreeable solution.
Institutions would be provided
written notice of SARC appeal rights
within 10 days of a determination that
appeal rights have been made available.
*
*
*
*
*
Proposed Amended 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.
The procedures set forth in these
guidelines establish an appeals process
for the review of material supervisory
determinations by the Supervision
Appeals Review Committee (‘‘SARC’’).
B. SARC Membership
The following individuals comprise
the three (3) voting members of the
SARC: (1) One inside FDIC Board
member, either the Chairperson, the
Vice Chairperson, or the FDIC Director
(Appointive), as designated by the FDIC
Chairperson (this person would serve as
the Chairperson of the SARC); and (2)
one deputy or special assistant to each
of the inside FDIC Board members who
are not designated as the SARC
Chairperson. The General Counsel is a
non-voting member of the SARC. The
FDIC Chairperson may designate
alternate member(s) to the SARC if there
are vacancies so long as the alternate
member was not involved in making or
affirming the material supervisory
determination under review. A member
of the SARC may designate and
authorize the most senior member of his
or her staff within the substantive area
of responsibility related to cases before
the SARC to act on his or her behalf.
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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 with respect to
which the FDIC makes material
supervisory determinations.
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D. Determinations Subject To Appeal
An institution may appeal any
material supervisory determination
pursuant to the procedures set forth in
these guidelines.
Material supervisory determinations
include:
(a) CAMELS ratings under the
Uniform Financial Institutions Rating
System;
(b) IT ratings under the Uniform
Interagency Rating System for Data
Processing Operations;
(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
adequacy 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;
(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 (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. 308, subparts D, L,
and M, respectively), if the filing was
originally denied by the Director,
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Deputy Director, or Associate Director of
the Division of Depositor and Consumer
Protection (‘‘DCP’’) or the Division of
Risk Management Supervision (‘‘RMS’’);
(n) 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
enforcement action requires additional
enforcement action, the proposed new
enforcement action is not appealable;
and
(o) 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
otherwise affect the nature and level of
supervisory oversight accorded an
institution.
Material supervisory determinations
do not include:
(a) Decisions to appoint a conservator
or receiver for an insured depository
institution;
(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.
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) or provides written notice to the
bank of a recommended or proposed
formal enforcement action 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
the ECOA or the Fair Housing Act
(‘‘FHA’’). A formal enforcement-related
action or decision does not affect the
appeal of any material supervisory
determination that is pending under
these guidelines. For the purposes of
these guidelines, remarks in a Report of
Examination do not constitute written
notice of a recommended or proposed
enforcement action.
Additional SARC Rights:
(a) In the case of any written notice
from the FDIC to the institution of a
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recommended or proposed formal
enforcement action, including a draft
consent order, if an enforcement action,
such as the issuance of a notice of
charges or the signing of a consent
order, is not pursued within 120 days of
the written notice, SARC appeal rights
will be made available pursuant to these
guidelines. The FDIC may extend this
120-day period, with the approval of the
SARC Chairperson, if 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, if the Attorney General returns
the matter to the FDIC and the FDIC
does not initiate an enforcement action
within 120 days of the date the referral
is returned, SARC 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, if the FDIC does not initiate an
enforcement action within 120 days of
the date the notice is provided, SARC
appeal rights will be made available
under these guidelines.
(d) Written notification of SARC
rights will be provided to the institution
within 10 days of a determination that
such rights have been made available.
(e) The FDIC and an institution may
mutually agree to extend the timeframes
in paragraphs (a), (b), and (c) if the
parties deem it appropriate in order to
reach a mutually agreeable solution.
E. Good Faith Resolution
An institution should make a goodfaith 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/
or 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 or RMS, or to filing
an appeal with the SARC under these
guidelines.
F. Filing a Request for Review With the
Appropriate Division
An institution may file a request for
review of a material supervisory
determination with the Division that
made the determination, either the
Director, DCP, or the Director, RMS,
(‘‘Director’’ or ‘‘Division Director’’), 550
17th Street NW., Room F–4076,
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Washington, DC 20429, within 60
calendar days following the institution’s
receipt of a report of examination
containing a material supervisory
determination or other written
communication of a material
supervisory determination. 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 has considered the
merits of the request and has authorized
that it be filed.
The Division Director will issue a
written determination on the request for
review, setting forth the grounds for that
determination, within 45 days of receipt
of the request. No appeal to the SARC
will be allowed unless an institution has
first filed a timely request for review
with the appropriate Division Director.
G. Appeal to the SARC
An institution that does not agree
with the written determination rendered
by the Division Director must appeal
that determination to the SARC within
30 calendar days from the date of that
determination. The Director’s
determination will inform the
institution of the 30-day time period for
filing with the SARC and will provide
the mailing address for any appeal the
institution may wish to file. Failure to
file within the 30-day time limit may
result in denial of the appeal by the
SARC. If the Division Director
recommends that an institution receive
relief that the Director lacks delegated
authority to grant, the Director may,
with the approval of the Chairperson of
the SARC, transfer the matter directly to
the SARC without issuing a
determination. Notice of such a transfer
will be provided to the institution. The
Division Director may also request
guidance from the SARC Chairperson as
to procedural or other questions relating
to any request for review.
H. Filing With the SARC
An appeal to the SARC will be
considered filed if the written appeal is
received by the FDIC within 30 calendar
days from the date of the Division
Director’s written determination or if
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18:12 Aug 03, 2016
Jkt 238001
the written appeal is placed in the U.S.
mail within that 30-day period. If the
30th day after the date of the Division
Director’s written determination is a
Saturday, Sunday, or a Federal holiday,
filing may be made on the next business
day. The appeal should be sent to the
address indicated on the Division
Director’s determination being
appealed.
I. Contents of Appeal
The appeal should be labeled to
indicate that it is an appeal to the SARC
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. Only
matters previously reviewed at the
division level, resulting in a written
determination or direct referral to the
SARC, may be appealed to the SARC.
Evidence not presented for review to the
Division Director may be submitted to
the SARC only if authorized by the
SARC Chairperson. The institution
should set forth all of the reasons, legal
and factual, why it disagrees with the
Division Director’s determination.
Nothing in the SARC administrative
process shall create any discovery or
other such rights.
J. 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.
K. Oral Presentation
The SARC may, in its discretion,
whether or not a request is made,
determine to allow an oral presentation.
The SARC generally grants a request for
oral presentation if it determines that
oral presentation is likely to be helpful
or would otherwise be in the public
interest. Notice of the SARC’s
determination to grant or deny a request
for oral presentation will be provided to
the institution. If oral presentation is
held, the institution will be allowed to
present its positions on the issues raised
in the appeal and to respond to any
questions from the SARC. The SARC
may also require that FDIC staff
participate as the SARC deems
appropriate.
L. Dismissal and Withdrawal
An appeal may be dismissed by the
SARC 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. An appeal may be
PO 00000
Frm 00016
Fmt 4703
Sfmt 4703
51445
rejected if the right to appeal has been
cut off under Section D, above.
M. Scope of Review and Decision
The SARC will review the appeal for
consistency with the policies, practices,
and mission of the FDIC and the overall
reasonableness of, and the support
offered for, the positions advanced. The
SARC will notify the institution, in
writing, of its decision concerning the
disputed material supervisory
determination(s) within 45 days from
the date the SARC meets to consider the
appeal, which meeting will be held
within 90 days from the date of the
filing of the appeal. SARC 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
SARC may reconsider its decision only
on a showing of an intervening change
in the controlling law or the availability
of material evidence not reasonably
available when the decision was issued.
N. Publication of Decisions
SARC decisions will be published,
and the published SARC decisions will
be redacted to avoid disclosure of
exempt information. In cases in which
redaction is deemed insufficient to
prevent improper disclosure, published
decisions may be presented in summary
form. Published SARC decisions may be
cited as precedent in appeals to the
SARC.
O. SARC Guidelines Generally
Appeals to the SARC will be governed
by these guidelines. The SARC will
retain discretion to waive any provision
of the guidelines for good cause. The
SARC may adopt supplemental rules
governing its operations; order that
material be kept confidential; and
consolidate similar appeals.
P. Limitation on Agency Ombudsman
The subject matter of a material
supervisory determination for which
either an appeal to the SARC has been
filed, or a final SARC decision issued,
is not eligible for consideration by the
Ombudsman.
Q. 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, or the
Director, RMS, as appropriate, will
E:\FR\FM\04AUN1.SGM
04AUN1
51446
Federal Register / Vol. 81, No. 150 / Thursday, August 4, 2016 / Notices
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 SARC, the SARC will
notify the institution and the State
regulatory authority of its decision.
Once the SARC has issued its
determination, any other issues that
may remain between the institution and
the State authority will be left to those
parties to resolve.
R. 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 or affect the FDIC’s
authority to take any supervisory or
enforcement action against that
institution.
sradovich on DSK3GMQ082PROD with NOTICES
S. 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.
T. Prohibition on Examiner Retaliation
The FDIC has an experienced
examination workforce and is proud of
its professionalism and dedication.
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. 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,
550 17th Street, Washington, DC 20429,
explaining the circumstances and the
basis for such belief or evidence and
requesting that the complaint be
investigated and appropriate
disciplinary or remedial action taken.
VerDate Sep<11>2014
18:12 Aug 03, 2016
Jkt 238001
The Office of the Ombudsman will work
with the appropriate Division Director
to resolve the allegation of retaliation.
By order of the Board of Directors.
Dated at Washington, DC, the 28th day of
July, 2016.
Federal Deposit Insurance Corporation.
Robert E. Feldman,
Executive Secretary.
[FR Doc. 2016–18507 Filed 8–3–16; 8:45 am]
BILLING CODE 6714–01–P
FEDERAL MARITIME COMMISSION
Agency Information Collection
Activities: Submission for OMB
Review; Comment Request
Federal Maritime Commission.
Final notice of submission for
OMB review.
AGENCY:
ACTION:
In accordance with the
Paperwork Reduction Act of 1995, the
Federal Maritime Commission (FMC or
Commission) hereby gives notice that it
has submitted to the Office of
Management and Budget a request for
an extension of the existing collection
requirements under 46 CFR part 532—
NVOCC Negotiated Rate Arrangements.
The FMC has requested an extension of
an existing collection as listed below.
DATES: Written comments must be
submitted on or before September 6,
2016.
SUMMARY:
Comments should be
addressed to:
Office of Information and Regulatory
Affairs, Office of Management and
Budget, Attention: Desk Officer for
FMC, 725 17th Street NW.,
Washington, DC 20503, OIRA_
Submission@OMB.EOP.GOV, Fax
(202) 395–5806 and to:
Vern Hill, Managing Director, Office of
the Managing Director, Federal
Maritime Commission, 800 North
Capitol Street NW., Washington, DC
20573, (202) 523–5800, omd@fmc.gov.
FOR FURTHER INFORMATION CONTACT:
Copies of the submission(s) may be
obtained by contacting Donna L. Lee on
202–523–5800 or email: dlee@fmc.gov.
SUPPLEMENTARY INFORMATION: A notice
that FMC would be submitting this
request was published in the Federal
Register on April 27, 2016 (81 FR
24814) allowing for a 60-day comment
period. No comments were received.
The FMC hereby informs potential
respondents that an agency may not
conduct or sponsor, and that a person is
not required to respond to, a collection
of information unless it displays a
currently valid OMB control number.
ADDRESSES:
PO 00000
Frm 00017
Fmt 4703
Sfmt 4703
Information Collection Open for
Comment
Title: 46 CFR part 532—NVOCC
Negotiated Rate Arrangements.
OMB Approval Number: 3072–0071
(Expires July 31, 2016).
Abstract: Section 16 of the Shipping
Act of 1984, 46 U.S.C. 40103, authorizes
the Commission to exempt by order or
regulation ‘‘any class of agreements
between persons subject to this [Act] or
any specified activity of those persons
from any requirement of this [Act] if the
Commission finds that the exemption
will not result in substantial reduction
in competition or be detrimental to
commerce.’’ The Commission may
attach conditions to any exemption and
may, by order, revoke an exemption. In
46 CFR part 532, the Commission
exempted non-vessel-operating common
carriers (NVOCCs) from the tariff rate
publication requirements of part 520,
and allowed an NVOCC to enter into an
NVOCC Negotiated Rate Arrangement
(NRA) in lieu of publishing its tariff
rate(s), provided the NVOCC posts a
prominent notice in its rules tariff
invoking the NRA exemption and
provides electronic access to its rules
tariff to the public free of charge. This
information collection corresponds to
the rules tariff prominent notice and the
requirement to make its tariff publicly
available free of charge.
Current Actions: There are no changes
to this information collection, and it is
being submitted for extension purposes
only.
Type of Review: Extension.
Needs and Uses: The Commission
uses the information filed by an NVOCC
in its rules tariff to determine whether
the NVOCC has invoked the exemption
for a particular shipment or shipments.
The Commission has used and will
continue to use the information required
to be maintained by NVOCCs for
monitoring and investigatory purposes,
and, in its proceedings, to adjudicate
related issues raised by private parties.
Frequency: An NVOCC invokes the
NRA exemption by publishing a
prominent notice in its rules tariff once.
Type of Respondents: NVOCCs.
Number of Annual Respondents: 255.
New NVOCCs become licensed or
registered with the Commission
regularly. Of those, approximately 255
invoke the exemption by publishing a
tariff rule or prominent notice.
Estimated Time per Response: 15
minutes for those adding a tariff rule to
use a combination of tariff rates and
NRAs. One hour for those who make
their tariff rules publicly available by
opting to use NRAs exclusively and
posting them to their Web site.
E:\FR\FM\04AUN1.SGM
04AUN1
]]>Agencies
[Federal Register Volume 81, Number 150 (Thursday, August 4, 2016)]
[Notices]
[Pages 51441-51446]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-18507]
-----------------------------------------------------------------------
FEDERAL DEPOSIT INSURANCE CORPORATION
Guidelines for Appeals of Material Supervisory Determinations
AGENCY: Federal Deposit Insurance Corporation.
ACTION: Notice and request for comment.
-----------------------------------------------------------------------
SUMMARY: The Federal Deposit Insurance Corporation (``FDIC'') proposes
to amend its Guidelines for Appeals of Material Supervisory
Determinations (Guidelines) so that institutions have additional
avenues of redress with respect to these determinations and for greater
consistency with the appeals process of the other Federal banking
agencies. Consistent with Section 309(a) of the Riegle Community
Development and Regulatory Improvement Act of 1994 (``Riegle Act''),
the FDIC, in 1995, established its Supervision Appeals Review Committee
(SARC), an independent intra-agency appellate process to review appeals
by institutions of ``material supervisory determinations,'' and has
amended the Guidelines from time to time, as appropriate.
DATES: Written comments on the Proposal must be received by the FDIC on
or before October 3, 2016 for consideration.
ADDRESSES: Interested parties are invited to submit written comments to
the FDIC by any of the following methods:
Federal eRulemaking Portal: https://www.regulations.gov.
Follow the instructions for submitting comments.
Agency Web site: https://www.fdic.gov/regulations/laws/federal/ gov/regulations/laws/
federal/ . Follow the instructions for submitting comments.
Email: comments@fdic.gov. Include ``Guidelines for Appeals
of Material Supervisory Determinations'' in the subject line of the
message.
Mail: Robert E. Feldman, Executive Secretary, Attention:
Comments/Legal ESS, Federal Deposit Insurance Corporation, 550 17th
Street NW., Washington, DC 20429.
Hand Delivery: Comments may be hand-delivered to the guard
station located at the rear of the FDIC's 550 17th Street building
(accessible from F Street) on business days between 7 a.m. and 5 p.m.
Public Inspection: All comments received, including any
personal information provided, will be posted generally without change
to https://www.fdic.gov/regulations/laws/federal/ federal/. Comments may be
inspected and photocopied in the FDIC Public Information Center, Room
E-1005, 3501 North Fairfax Drive, Arlington, VA 22226 between 9 a.m.
and 4:00 p.m. on business days.
FOR FURTHER INFORMATION CONTACT: Christopher Newbury, Associate
Director, Division of Risk Management
[[Page 51442]]
Supervision, (202) 898-3504; Sylvia Plunkett, Senior Deputy Director,
Division of Depositor and Consumer Protection, (202) 898-6929; and
James Watts, Senior Attorney, Legal Division, (202) 898-6678.
SUPPLEMENTARY INFORMATION: The FDIC is publishing for notice and
comment proposed amendments to the Guidelines for Appeals of Material
Supervisory Determinations. The FDIC considers it desirable in this
instance to seek comments regarding these amendments to the Guidelines,
although notice and comment is not required. The proposed amendments
would be effective upon adoption so that institutions have additional
avenues of redress with respect to material supervisory determinations.
The proposed amendments would (1) permit appeal of the level of
compliance with an existing formal enforcement action; (2) provide that
a formal enforcement-related action or decision does not affect an
appeal that is pending under the Guidelines; (3) make additional appeal
rights available pursuant to the Guidelines with respect to material
supervisory determinations in certain circumstances; and (4) make other
limited technical and conforming amendments.
Background
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 FDIC (as well as the other Federal banking
agencies and the National Credit Union Administration Board) to
establish an independent intra-agency appellate process to review
material supervisory determinations. 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.
In the appeals process, the FDIC is required to ensure that: (1) An
appeal of a material supervisory determination by an insured depository
institution is heard and decided expeditiously; and (2) appropriate
safeguards exist for protecting appellants from retaliation by agency
examiners.
The term ``material supervisory determinations'' is defined in the
Riegle Act 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. The
Riegle Act specifically excludes from the definition of ``material
supervisory determinations'' a decision to appoint a conservator or
receiver for an insured depository institution or to take prompt
corrective action pursuant to section 38 of the Federal Deposit
Insurance Act (``FDI Act''), 12 U.S.C. 1831o. Finally, section 309(g)
(12 U.S.C. 4806(g)) expressly provides that the Riegle Act's
requirement to establish an appeals process shall not affect the
authority of the Federal banking agencies to take enforcement or
supervisory actions against an institution.
On December 28, 1994, the FDIC published in the Federal Register,
for a 30-day comment period, a notice of and request for comments on
proposed Guidelines for Appeals of Material Supervisory Determinations
(``Guidelines'') (59 FR 66965.) In the proposed Guidelines, the FDIC
proposed that the term ``material supervisory determinations,'' in
addition to the statutory exclusions noted above, also should not
include: (1) Determinations for which other appeals procedures exist
(such as determinations relating to deposit insurance assessment risk
classifications); (2) decisions to initiate formal enforcement actions
under section 8 of the FDI Act; (3) decisions to initiate informal
enforcement actions (such as memoranda of understanding); (4)
determinations relating to a violation of a statute or regulation; and
(5) any other determinations not specified in the Riegle Act as being
eligible for appeal.
Commenters to the proposed Guidelines suggested that the proposed
limitations on determinations eligible for appeal were too restrictive.
In response to comments received, the FDIC modified the proposed
Guidelines. The FDIC added a final clarifying sentence to the listing
of ``Determinations Not Eligible for Appeal'' in the Guidelines as
follows: ``The FDIC recognizes that, although determinations to take
prompt corrective action or initiate formal or informal enforcement
actions are not appealable, the determinations upon which such actions
may be based (e.g., loan classifications) are appealable provided they
otherwise qualify.'' (60 FR 15929, March 28, 1995.) On March 21, 1995,
the FDIC's Board of Directors adopted the proposed Guidelines. (60 FR
15923.)
On March 18, 2004, the FDIC published in the Federal Register, for
a 30-day comment period, a notice and request for comments regarding
proposed revisions to the Guidelines, which would change the
composition and procedures of the SARC. (69 FR 12855.) On July 9, 2004,
the FDIC published in the Federal Register a notice of guidelines
which, effective June 28, 2004, adopted the revised Guidelines, largely
as proposed. (69 FR 41479.)
On May 27, 2008, the FDIC published in the Federal Register, for a
60-day comment period, a notice and request for comments regarding
proposed revisions to the Guidelines. (73 FR 30393.) On September 23,
2008, the FDIC published in the Federal Register a notice of guidelines
which, effective September 16, 2008, adopted revised Guidelines
modifying the supervisory determinations eligible for appeal to
eliminate the ability of an FDIC-supervised institution to file an
appeal with the SARC for determinations or the facts and circumstances
underlying a recommended or pending formal enforcement-related action
or decision, including the initiation of an investigation. The FDIC
noted that these amendments better aligned the SARC appellate process
with the material supervisory determinations appeals procedures at the
other Federal banking agencies. (73 FR 54822.)
On April 19, 2010, the FDIC published in the Federal Register a
notice of guidelines which, effective April 13, 2010, adopted revised
Guidelines extending the decision deadline for requests for review and
clarifying the decisional deadline for written decisions by the SARC.
(75 FR 20358.)
On March 23, 2012, the FDIC published in the Federal Register a
notice of guidelines which, effective March 20, 2012, adopted revised
Guidelines that included technical and ministerial revisions to reflect
changes in the organization of the FDIC's Board, of its offices and
divisions, and in the categories of institutions that it supervises.
(77 FR 17055.)
Proposed Amendments
As noted above, the FDIC adopted amendments to the Guidelines in
2008 modifying the supervisory determinations eligible for appeal to
eliminate the ability of an FDIC-supervised institution to file an
appeal with the SARC for determinations or the facts and circumstances
underlying a recommended or pending formal enforcement-related action
or decision, including the initiation of an investigation. However,
based on the FDIC's experience in administering the current appellate
process, the FDIC believes that there are changes that could be
beneficial to allow for additional avenues of redress with respect to
certain material supervisory
[[Page 51443]]
determinations. In considering changes, the FDIC also reviewed the
current policies at the OCC and the Board of Governors of the Federal
Reserve System. Accordingly, the FDIC is proposing amendments to the
Guidelines that would expand institutions' appellate rights under
certain circumstances as well as promote greater consistency with the
other Federal banking agencies.
I. Amendment of Material Supervisory Determinations Eligible for Review
Currently, the Guidelines state that ``material supervisory
determinations'' subject to appeal do not include determinations
regarding compliance with an existing formal enforcement action. The
proposed amendment to the Guidelines would allow determinations
regarding an institution's level of compliance with an existing formal
enforcement action to be appealed; however, if the FDIC determines that
lack of compliance with an existing enforcement action requires
additional enforcement action, the proposed new enforcement action
would not be appealable. This proposed amendment to the Guidelines
would enhance institutions' opportunities to obtain an independent
review of supervisory determinations, promoting the goals of the Riegle
Act in a manner consistent with the statute's requirement that the
appeals process shall not affect the authority of the Federal banking
agencies to take enforcement or supervisory actions against an
institution.\1\
---------------------------------------------------------------------------
\1\ 12 U.S.C. 4806(g).
---------------------------------------------------------------------------
The FDIC notes that, similar to the proposed amendments, the
current appeals process of the OCC allows institutions to appeal
conclusions regarding their level of compliance with a formal
enforcement action; however, if the OCC determines that the lack of
compliance with an existing enforcement action requires additional
enforcement action, the proposed new enforcement action is not
appealable. See OCC Bulletin 2013-15 (June 7, 2013).
In addition, the proposed Guidelines would remove from the list of
determinations that are not appealable the decision to initiate an
informal enforcement action, such as a Memorandum of Understanding.
This would better conform the FDIC's Guidelines to the current appeals
process of the Office of the Comptroller of the Currency.
II. Commencement of Formal Enforcement Action
Currently, the Guidelines state that a formal enforcement-related
action or decision commences, and therefore becomes unappealable, when
the FDIC initiates a formal investigation under 12 U.S.C. 1820(c) or
provides written notice to the bank indicating its intention to pursue
available formal enforcement remedies under applicable statutes or
published enforcement-related policies of the FDIC, including written
notice of a referral to the Attorney General pursuant to ECOA or a
notice to HUD for violations of the FHA or ECOA. The proposed
amendments would provide that 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) or provides written notice
to the bank of a recommended or proposed formal enforcement action
under applicable statutes or published enforcement-related policies of
the FDIC, including written notice of a referral to the Attorney
General pursuant to the ECOA or a notice to HUD for violations of the
FHA or ECOA. This change would make the Guidelines more consistent with
the process of the OCC.
The proposed amendments also would provide that a formal
enforcement-related action or decision does not affect the appeal of
any material supervisory determination that is pending under the
Guidelines.
III. Additional SARC Appeal Rights
The proposed amendments would make SARC appeal rights available
with respect to material supervisory determinations in certain
circumstances. In particular, SARC appeal rights would be made
available pursuant to the Guidelines where the FDIC has provided an
institution with written notice of a recommended or proposed formal
enforcement action, but does not pursue an enforcement action within
120 days of the written notice. The FDIC may extend this 120-day
period, with the approval of the SARC Chairperson, if the FDIC notifies
the institution that the relevant Division Director is seeking formal
authority to take an enforcement action.
In addition, SARC appeal rights would be made available in the case
of a referral to the Attorney General for certain violations of the
ECOA, if the Attorney General returns the matter to the FDIC and the
FDIC does not initiate an enforcement action within 120 days of the
date the referral is returned.
SARC appeal rights would also be made available if the FDIC
provides notice to HUD for violations of the ECOA or FHA, but does not
initiate an enforcement action within 120 days of the date the notice
is provided.
Under the proposal, these additional appeal rights may be extended
if the FDIC and the institution mutually agree and deem it appropriate
in order to reach a mutually agreeable solution.
Institutions would be provided written notice of SARC appeal rights
within 10 days of a determination that appeal rights have been made
available.
* * * * *
Proposed Amended 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. The procedures set forth in
these guidelines establish an appeals process for the review of
material supervisory determinations by the Supervision Appeals Review
Committee (``SARC'').
B. SARC Membership
The following individuals comprise the three (3) voting members of
the SARC: (1) One inside FDIC Board member, either the Chairperson, the
Vice Chairperson, or the FDIC Director (Appointive), as designated by
the FDIC Chairperson (this person would serve as the Chairperson of the
SARC); and (2) one deputy or special assistant to each of the inside
FDIC Board members who are not designated as the SARC Chairperson. The
General Counsel is a non-voting member of the SARC. The FDIC
Chairperson may designate alternate member(s) to the SARC if there are
vacancies so long as the alternate member was not involved in making or
affirming the material supervisory determination under review. A member
of the SARC may designate and authorize the most senior member of his
or her staff within the substantive area of responsibility related to
cases before the SARC to act on his or her behalf.
[[Page 51444]]
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 with respect to 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.
Material supervisory determinations include:
(a) CAMELS ratings under the Uniform Financial Institutions Rating
System;
(b) IT ratings under the Uniform Interagency Rating System for Data
Processing Operations;
(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 adequacy 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;
(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 (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. 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) 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 enforcement action requires
additional enforcement action, the proposed new enforcement action is
not appealable; and
(o) 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 otherwise affect the nature and level of
supervisory oversight accorded an institution.
Material supervisory determinations do not include:
(a) Decisions to appoint a conservator or receiver for an insured
depository institution;
(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.
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) or provides written notice to the bank of a
recommended or proposed formal enforcement action 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
the ECOA or the Fair Housing Act (``FHA''). A formal enforcement-
related action or decision does not affect the appeal of any material
supervisory determination that is pending under these guidelines. For
the purposes of these guidelines, remarks in a Report of Examination do
not constitute written notice of a recommended or proposed enforcement
action.
Additional SARC Rights:
(a) In the case of any written notice from the FDIC to the
institution of a recommended or proposed formal enforcement action,
including a draft consent order, if an enforcement action, such as the
issuance of a notice of charges or the signing of a consent order, is
not pursued within 120 days of the written notice, SARC appeal rights
will be made available pursuant to these guidelines. The FDIC may
extend this 120-day period, with the approval of the SARC Chairperson,
if 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, if the Attorney General returns the matter to
the FDIC and the FDIC does not initiate an enforcement action within
120 days of the date the referral is returned, SARC 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, if the FDIC does not initiate an enforcement action
within 120 days of the date the notice is provided, SARC appeal rights
will be made available under these guidelines.
(d) Written notification of SARC rights will be provided to the
institution within 10 days of a determination that such rights have
been made available.
(e) The FDIC and an institution may mutually agree to extend the
timeframes in paragraphs (a), (b), and (c) if the parties deem it
appropriate in order to reach a mutually agreeable solution.
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/or 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 or RMS, or to filing
an appeal with the SARC under these guidelines.
F. Filing a Request for Review With the Appropriate Division
An institution may file a request for review of a material
supervisory determination with the Division that made the
determination, either the Director, DCP, or the Director, RMS,
(``Director'' or ``Division Director''), 550 17th Street NW., Room F-
4076,
[[Page 51445]]
Washington, DC 20429, within 60 calendar days following the
institution's receipt of a report of examination containing a material
supervisory determination or other written communication of a material
supervisory determination. 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 has
considered the merits of the request and has authorized that it be
filed.
The Division Director will issue a written determination on the
request for review, setting forth the grounds for that determination,
within 45 days of receipt of the request. No appeal to the SARC will be
allowed unless an institution has first filed a timely request for
review with the appropriate Division Director.
G. Appeal to the SARC
An institution that does not agree with the written determination
rendered by the Division Director must appeal that determination to the
SARC within 30 calendar days from the date of that determination. The
Director's determination will inform the institution of the 30-day time
period for filing with the SARC and will provide the mailing address
for any appeal the institution may wish to file. Failure to file within
the 30-day time limit may result in denial of the appeal by the SARC.
If the Division Director recommends that an institution receive relief
that the Director lacks delegated authority to grant, the Director may,
with the approval of the Chairperson of the SARC, transfer the matter
directly to the SARC without issuing a determination. Notice of such a
transfer will be provided to the institution. The Division Director may
also request guidance from the SARC Chairperson as to procedural or
other questions relating to any request for review.
H. Filing With the SARC
An appeal to the SARC will be considered filed if the written
appeal is received by the FDIC within 30 calendar days from the date of
the Division Director's written determination or if the written appeal
is placed in the U.S. mail within that 30-day period. If the 30th day
after the date of the Division Director's written determination is a
Saturday, Sunday, or a Federal holiday, filing may be made on the next
business day. The appeal should be sent to the address indicated on the
Division Director's determination being appealed.
I. Contents of Appeal
The appeal should be labeled to indicate that it is an appeal to
the SARC 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. Only matters
previously reviewed at the division level, resulting in a written
determination or direct referral to the SARC, may be appealed to the
SARC. Evidence not presented for review to the Division Director may be
submitted to the SARC only if authorized by the SARC Chairperson. The
institution should set forth all of the reasons, legal and factual, why
it disagrees with the Division Director's determination. Nothing in the
SARC administrative process shall create any discovery or other such
rights.
J. 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.
K. Oral Presentation
The SARC may, in its discretion, whether or not a request is made,
determine to allow an oral presentation. The SARC generally grants a
request for oral presentation if it determines that oral presentation
is likely to be helpful or would otherwise be in the public interest.
Notice of the SARC's determination to grant or deny a request for oral
presentation will be provided to the institution. If oral presentation
is held, the institution will be allowed to present its positions on
the issues raised in the appeal and to respond to any questions from
the SARC. The SARC may also require that FDIC staff participate as the
SARC deems appropriate.
L. Dismissal and Withdrawal
An appeal may be dismissed by the SARC 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. An appeal may be rejected
if the right to appeal has been cut off under Section D, above.
M. Scope of Review and Decision
The SARC will review the appeal for consistency with the policies,
practices, and mission of the FDIC and the overall reasonableness of,
and the support offered for, the positions advanced. The SARC will
notify the institution, in writing, of its decision concerning the
disputed material supervisory determination(s) within 45 days from the
date the SARC meets to consider the appeal, which meeting will be held
within 90 days from the date of the filing of the appeal. SARC 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 SARC may reconsider its decision only on a
showing of an intervening change in the controlling law or the
availability of material evidence not reasonably available when the
decision was issued.
N. Publication of Decisions
SARC decisions will be published, and the published SARC decisions
will be redacted to avoid disclosure of exempt information. In cases in
which redaction is deemed insufficient to prevent improper disclosure,
published decisions may be presented in summary form. Published SARC
decisions may be cited as precedent in appeals to the SARC.
O. SARC Guidelines Generally
Appeals to the SARC will be governed by these guidelines. The SARC
will retain discretion to waive any provision of the guidelines for
good cause. The SARC may adopt supplemental rules governing its
operations; order that material be kept confidential; and consolidate
similar appeals.
P. Limitation on Agency Ombudsman
The subject matter of a material supervisory determination for
which either an appeal to the SARC has been filed, or a final SARC
decision issued, is not eligible for consideration by the Ombudsman.
Q. 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, or the Director, RMS, as
appropriate, will
[[Page 51446]]
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 SARC, the SARC will notify the institution
and the State regulatory authority of its decision. Once the SARC has
issued its determination, any other issues that may remain between the
institution and the State authority will be left to those parties to
resolve.
R. 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 or affect the FDIC's
authority to take any supervisory or enforcement action against that
institution.
S. 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.
T. Prohibition on Examiner Retaliation
The FDIC has an experienced examination workforce and is proud of
its professionalism and dedication. 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. 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, 550 17th Street, Washington, DC
20429, explaining the circumstances and the basis for such belief or
evidence and requesting that the complaint be investigated and
appropriate disciplinary or remedial action taken. The Office of the
Ombudsman will work with the appropriate Division Director to resolve
the allegation of retaliation.
By order of the Board of Directors.
Dated at Washington, DC, the 28th day of July, 2016.
Federal Deposit Insurance Corporation.
Robert E. Feldman,
Executive Secretary.
[FR Doc. 2016-18507 Filed 8-3-16; 8:45 am]
BILLING CODE 6714-01-P
