I. INTRODUCTION
The FDIC, OCC, and Federal Reserve Board have adopted regulations for bankers to utilize in appealing examination results. Although an appeals process was never a totally new concept for the agencies, the Riegle Community Development and Regulatory Improvement Act of 1994 formalized appeal procedures by directing each agency to set up an independent process. The legislation provided that two specific goals be met by each agency:
1. that the appeals process be handled expeditiously as to hearings and decisions; and 2. that the appeals process institute safeguards to protecting appealing banks or bankers from retaliation by examiners.
The main objective of the appeals process is to enable a bank to settle regulatory disputes, findings or opinions or to reverse criticisms or deficiencies that may have arisen as a result of an examination or from regulation.
The following is a summary of each agency’s appeal process.
II. FDIC GUIDELINES
1. Any appeal taken must be in writing and approved by the bank’s board of directors. The FDIC urges banks to first consider a good faith effort to resolve any disputed matter with the on-site examiner or the appropriate FDIC Regional Office although such attempted resolution is not a condition for filing an appeal. 2. As a general rule, “material supervisory determinations” made by agency examiners and regional supervisory officials may be appealed. 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 rating 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 dealers examination ratings; h. Municipal securities dealer examination rating; 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 ten 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 insitution; l. Truth in Lending (Regulation Z) restitution; m. Filings made pursuant to 12 C.F.R. § 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 § 19 of the FDI Act, if the filing was originally denied by the Director, Deputy Director, or Associate Director of the Division of Supervision and Consumer Protection; 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 additional 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 impact 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.
3. 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 § 38 of the Federal Deposit Insurance Act; c. Determinations for which other appeals procedures exists (such as determinations of deposit insurance assessment risk classifications and payment classifications); d. Decisions to initiate informal enforcement actions (such as memoranda of understanding); and e. Formal enforcement-related actions and decisions, including determinations and the underlying facts and circumstances that formed the basis of a recommended or pending formal enforcement action, and FDIC determinations regarding compliance with an existing formal enforcement action.
NOTE: 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 or a notice to the Secretary of Housing and Urban Development for apparent violations of the Equal Credit Opportunity Act or the Fair Housing Act. The amendments 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 institution 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 ECOA or a notice to HUD for violations of ECOA and the FHA.
Institutions will be notified in writing that the FDIC has recommended or proposed a formal enforcement action. Other types of correspondence from the FDIC to the institution, such as letters requesting additional information or referencing a violation of law without an express statement that the FDIC has recommended or proposed a formal enforcement action, are not considered to constitute notice of a recommended or proposed formal enforcement action for purposes of the Guidelines.
4. A request for review of a material supervisory determination may be filed up to 60 calendar days following the receipt of examination containing a material supervisory determination or other written communication of a material supervisory determination with the FDIC’s Director, Division of Supervision and Consumer Protection (SARC), 550 17th NW, Room F-4076, Washington D.C. 20429. The Division Director will issue a written determination of the request for review, setting forth the grounds for that determination, within 45-days of receipt of the request. No appeal to the Supervision Appeals Review Committee (“SARC”), will be allowed unless an institution has first filed a timely request for review with the Division of Supervision and Consumer Protection.
5. 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 authorized that it be filed.
6. An institution that does not agree with the written determination rendered by the Director of the Division of SARC must appeal that determination to the SARC within 30 calendar days from the date of that determination. The Director’s determination shall 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. The Division Director may also request guidance from the SARC Chairperson as to procedural or other questions relating to any requests for review.
7. The appeal must 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 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 institutions 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.
8. 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.
9. 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, and 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.
10. Institutions have additional opportunities to appeal material supervisory determinations through the SARC process in certain circumstances. In particular, an institution is allowed an additional opportunity to appeal material supervisory determinations where the FDIC provides the 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. Institutions are also allowed an additional opportunity to appeal material supervisory determinations thought the SARC process in the case of a referral to the Attorney General for certain violations of 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. Similarly, an additional opportunity to appeal through the SARC process would be allowed if the FDIC provides notice to HUD for violations of ECOA or the FHA, but does not initiate an enforcement action within 120 days of the date the notice is provided. The amendments published for comment proposed to allow the 120-day timeframe to 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 the additional opportunity to submit an appeal through the SARC process within 10 days of a determination that an appeal will be made available.
11. SARC decisions will be published, and the published SARC decisions will be redacted to avoid disclosure of exempt information. In cases where redaction is deemed to be 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.
12. The SARC will retain the discretion to waive any provision of the guidelines for good cause; the SARC may adopt supplemental rules governing SARC operations; the SARC may order that material be kept confidential; and the SARC may consolidate similar appeals.
13. 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.
14. 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, Division of Supervision and Consumer Protection, 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 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.
15. 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 Division of Supervision and Consumer Protection to resolve the allegation of retaliation.
III. OCC GUIDELINES
The Office of the Comptroller of the Currency (OCC) has revised its policy by which banks may appeal agency decisions and actions to provide additional guidance on appealable matters. This policy applies to national banks, federal savings associations, and federal branches and agencies (collectively, banks). The issuance replaces OCC Bulletin 2011-44, “Bank Appeals Process: Guidance for Bankers,” dated November 1, 2011.
The OCC Ombudsman operates independently from the bank supervision process and reports directly to the Comptroller of the Currency. With the prior consent of the Comptroller, the Ombudsman may stay any appealable agency decision or action during the resolution of an appealable matter. The Ombudsman also may report weaknesses in OCC policy to the Comptroller and make recommendations regarding changes in OCC policy.
The existence of a formal bank appeals process does not change the core policy of the OCC concerning dispute resolution, which is to resolve disputed issues in an informal, amicable manner. Banks are encouraged to contact the Ombudsman to discuss any agency policy, decision, or action that might develop into an appealable matter. The Ombudsman’s objective in these cases is to seek a resolution to the dispute before it develops into an appeal. This avenue provides an opportunity for banks to resolve issues in the most efficient and expeditious manner possible. If banks cannot resolve disagreements through discussion, they are encouraged to seek a further review of the OCC decisions or actions that are in dispute. The OCC official involved in the dispute shall inform the bank of the informal and formal appeals process.
The OCC bulletin establishes the process through which a bank can seek a review of agency supervisory decisions and actions. This process ensures that no one is disadvantaged by filing an appeal. A bank may always contact the Ombudsman with any questions regarding the appeals process. In addition, the Ombudsman is available for informal discussion or to act as a liaison between the OCC and any affected person or bank to resolve disputes resulting from the OCC’s regulatory activities. Interested parties shall direct all communications with the Ombudsman to the following address:
Office of the Ombudsman Office of the Comptroller of the Currency Suite 3E-218 400 7th Street SW Washington, DC 20219 Phone: (202) 649-5530; Fax: (202) 649-5727
A. Appealable Matters
Except as otherwise provided below, a bank may appeal any agency supervisory decision or action to its supervisory office or to the Ombudsman, including but not limited to the following:
While banks may not appeal a decision by the supervisory office to pursue a formal enforcement-related action, banks may appeal conclusions in the ROE. However, in such circumstances, the appeal is limited to a consideration of whether the examiners appropriately applied agency policies and standards. If a bank disagrees with the agency decision to pursue a formal enforcement action, the bank can contest the action through the administrative process. Once a bank has entered into a formal enforcement action, conclusions regarding the bank’s level of compliance with the formal enforcement action are an appealable matter. 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.
B. Matters That May Not Be Appealed
A bank may not appeal the following matters to the Ombudsman or the bank’s supervisory office:
A formal enforcement-related action or decision takes effect when a supervision review committee recommends or determines that the OCC will pursue a formal action under applicable statutes, regulations, or published enforcement-related policies of the OCC and at that point is no longer subject to appeal. Remarks in an ROE and other communications about a potential formal enforcement action made prior to a supervision review committee decision are preliminary and therefore may not be appealed. Enforcement policies include the OCC’s Enforcement Action Policy (PPM 5310-3 (REV)), Civil Money Penalty Policy (PPM 5000-7 (REV)), Enforcement Policy Statement on Civil Money Penalties (RB 18-3b), and Securities Activities Enforcement Policy (PPM 5310-5). These publications are available on request from the OCC’s Communications Division, 400 7th Street SW, Washington, DC 20219; or by telephone at (202) 649-6700.
C. Definitions
An inquiry is usually verbal information gathering about a specific topic and related standards or the appeals process; it occurs any time during the examination cycle.
A formal discussion represents communication between the supervisory office and a bank after the supervisory office receives written communication from the bank informing the supervisory office of its disagreement with preliminary supervisory conclusions based on a draft ROE, matters requiring attention, loan classifications, etc.
An informal appeal represents written communication to the bank’s supervisory office or signatory on the agency decision expressing disagreement with final, written conclusions; it occurs after receipt of an ROE or other written decision.
A formal appeal represents written communication to a Deputy Comptroller or the Ombudsman expressing disagreement with the final supervisory conclusions. A formal appeal must have board approval. A bank may appeal to the Ombudsman after filing an appeal with a Deputy Comptroller or the SNC appeals panel if applicable; this appeal is referred to as second-tier appeal.
Any communication between a Deputy Comptroller or the Ombudsman and the bank at any time prior to filing a formal appeal is considered a formal discussion.
D. Informal Appeals Activities
In keeping with the OCC’s core philosophy of resolving disputes arising from bank supervision actions and decisions in a fair and expeditious manner, banks are encouraged to discuss matters of disagreement with their supervisory office prior to receiving final written confirmation of the issue in dispute. Preliminary conclusions include written conclusions presented to the bank in draft form.
The objective of an inquiry or formal discussion is to seek an agreeable resolution before the issue in dispute develops into an informal or formal appeal. If banks and their supervisors cannot resolve their differences during the formal discussion stage after receipt of draft supervisory conclusions, banks may file an informal appeal with their supervisory office Assistant Deputy Comptroller, Director for Special Supervision, or Large Bank EIC within 10 days of receiving the agency’s final written decision. The supervisory office shall respond in writing to the appeals within 10 days of receipt.
If banks disagree with the outcome of the informal appeal, they can file a formal appeal with the appropriate Deputy Comptroller or the Ombudsman as further described below.
The choice of where to file a formal appeal is at the banks’ discretion. If a bank files an appeal with its appropriate Deputy Comptroller and disagrees with the outcome, the bank may file for an additional review of the disputed matter directly with the Ombudsman.
E. Formal Appeals Activities
Banks may seek review of appealable matters by filing a formal appeal with either the appropriate Deputy Comptroller or the Ombudsman. With the exception of disputes arising from SNCs or matters relating to fair lending and section 914 of FIRREA, procedures for filing formal appeals are outlined below.
F. Appeals to the Deputy Comptroller
A formal appeal to the Deputy Comptroller shall be filed with the Deputy Comptroller responsible for the unit that issued the decision or action in dispute. Banks filing an appeal with the appropriate Deputy Comptroller must submit information in writing fully describing the matter in dispute and the basis for the bank’s disagreement. To ensure that a bank’s board of directors supports the appeal, the bank’s president or chief executive officer must submit the appeal and include in the submission the board’s approval of the action. Banks requesting an appeal must file their appeal within 60 days of receipt of the final written agency decision in dispute. The appeal also must include the supervisory standards (that is, a legal citation, a supervisory issuance, etc.) that the bank deems were inappropriately applied by OCC officials. Upon receiving the appeal, the Deputy Comptroller contacts the bank to discuss the appeals process and applicable supervisory standards related to the issue(s) in dispute, and to ensure that he or she has all the information needed to determine if the issue(s) in dispute are appealable. However, if the Deputy Comptroller directly or indirectly participated in making the decision under review, he or she must transfer the appeal to the Ombudsman after advising the appellant. The same is true if he or she directly or indirectly reports to the agency official who made the decision under review.
Within seven days of receiving a formal appeal, the Deputy Comptroller will notify the bank in writing whether the appeal has been accepted based on the acceptance criteria set forth in this bulletin. If the Deputy Comptroller accepts an appeal, that official contacts the OCC management official(s) involved in the dispute to submit a written response to the appeal. The supervisory office may request a conference with the Deputy Comptroller to discuss the appeals process and applicable supervisory standards related to the issue in dispute to ensure the response contains all the necessary materials.
In the absence of any extenuating circumstances, the Deputy Comptroller will issue an appeals decision letter within 45 days. Immediately after issuing a decision letter, the Deputy Comptroller will forward to the Ombudsman copies of all relevant materials considered in the preparation of the decision letter, including all written submissions by the bank.
If a bank disagrees with the response from the Deputy Comptroller, the bank may further appeal the matter to the Ombudsman. The appeals decision letter from the Deputy Comptroller to the bank must notify the bank of this option. The bank must file this second-tier appeal with the Ombudsman within 15 days of receiving the decision letter from the Deputy Comptroller.
G. Appeals to the Ombudsman
A formal appeal to the Ombudsman may arise from the following sources: (1) appeals filed directly with the Ombudsman, (2) second-tier appeals of Deputy Comptroller decisions, (3) Shared National Credit appeals decisions, (4) fair lending determinations, and (5) licensing decisions.
Similar to a Deputy Comptroller appeal, a bank filing an appeal directly with the Ombudsman must submit information in writing fully describing the matter in dispute and the basis for the bank’s disagreement. To ensure that a bank’s board of directors supports the appeal, the bank’s president or chief executive officer must submit the appeal and include in the submission the board’s approval of the action. The appeal also shall include the supervisory standards that the bank deems were inappropriately applied by OCC officials. Banks shall file an appeal within 60 days of receiving the final written agency decision in dispute.
Upon receiving the appeal, the Ombudsman will contact the bank to discuss the appeals process and supervisory standards related to the issue in dispute and to ensure that the Ombudsman has all relevant materials. Within seven days of receiving a formal appeal, the Ombudsman will notify the bank whether the appeal has been accepted. If the Ombudsman officially accepts an appeal based on the acceptance criteria described earlier in this bulletin, he or she will contact the OCC management official(s) involved in the dispute to submit a written response to the appeal. The supervisory office may request a conference with the Ombudsman to discuss the appeal process and supervisory standards related to the issue in dispute, and to ensure the response contains all relevant material.
In the absence of any extenuating circumstances, the Ombudsman will issue a written response to the appeal within 45 days.
H. Second-Tier Appeals
If a bank disagrees with the decision rendered through a Deputy Comptroller appeal or SNC appeals panel (discussed further in this section), it may further appeal the matter to the Ombudsman. Banks must file written notice of this second-tier appeal within 15 days of receiving the decision letter from the appropriate Deputy Comptroller.
Upon receipt, the Ombudsman shall review any material considered in the appeals response, including information submitted by the appellant at the time of the appeal and any other information considered in making the appeals decision. The Ombudsman will contact the bank to ensure that the OCC is in possession of all relevant material. If requested by either OCC management involved in the appeal or a senior official of the bank filing the appeal, the Ombudsman will arrange to discuss issues in dispute and applicable supervisory standards. In the absence of any extenuating circumstances, the Ombudsman will issue a written response to the second-tier appeal within 45 days of acceptance. When the Ombudsman is recused from reviewing the decision under appeal due to a potential conflict of interest, the Comptroller will transfer the appeal to a senior official within the agency.
I. Shared National Credits
Bank senior management must notify the EIC assigned to the bank if it disagrees with a decision rendered through the SNC program. If the bank and the examining team are unable to resolve the disagreement through informal discussion, the bank may formally appeal the decision to its Deputy Comptroller for Large Bank Supervision.
1. Who may submit an SNC appeal:
An agent bank may submit an SNC appeal directly or on behalf of any participant bank. If the agent bank refuses, for whatever reason, to file the appeal on behalf of the bank group, Large Bank Supervision will accept an appeal from any participating bank. A bank must file an SNC appeal with the regulator that supervises the agent bank. Therefore, if a state member bank is a participant in a credit for which a bank subject to OCC jurisdiction is the agent, the state member bank must file its appeal with the OCC. Conversely, if a bank is a participant in a credit for which a state member bank is the agent, the bank must file its appeal with the Board of Governors of the Federal Reserve. When no agent bank is named, the appeal shall be filed with the regulator that supervises the bank at which the SNC was reviewed. To ensure that a bank’s senior management supports the appeal, the chief executive officer of the appealing bank must submit all SNC appeals.
2. Timing of SNC appeals:
The agent bank shall file an SNC appeal within 14 days of notification by the EIC of the preliminary disposition of the credit. Notification occurs when the EIC gives the bank the preliminary notification letter at the conclusion of the SNC review process. Any participant bank can appeal either through the agent bank or on its own within 14 days of receiving the preliminary SNC results from the agent bank. If the agent bank does not provide preliminary results, participant banks may file an appeal within 14 days of receiving the official SNC results from the primary regulator. Large Bank Supervision will evaluate the reasonableness of an appeal delayed by extenuating circumstances on a case-by-case basis. The SNC preliminary notification letter authorizes agent or review banks, at their option, to notify participating banks of the preliminary disposition of each credit.
The SNC report is issued annually to banks participating in the SNC program at the end of each SNC review. Because of processing deadlines, the report may not reflect decisions on SNC appeals submitted beyond the initial 14-day filing period. In such cases, Large Bank Supervision will send a supplemental letter to each participating bank notifying it of the results of the appeal. The letter will also communicate any necessary revisions to each bank’s report of SNCs.
3. SNC appeals letter:
In drafting an SNC appeals letter, senior bank management shall explain why it disagrees with the SNC decision. The SNC appeals letter must identify the credit, the commitment amount, the disposition, the basis for the bank’s disagreement, and any documentation that supports management’s position on the matter(s) in dispute. Banks shall address all SNC appeals to the appropriate Deputy Comptroller for Large Bank Supervision, Office of the Comptroller of the Currency, Washington, DC 20219.
4. SNC appeals processing:
Upon receipt of an SNC appeal, the appropriate Deputy Comptroller for Large Bank Supervision will immediately acknowledge receipt by letter to the chief executive officer of the bank filing the appeal. Large Bank Supervision will normally forward a copy of the appeals letter and supporting information to the voting team that confirmed the loan rating within three days of receipt. The voting team will then confirm the accuracy of the facts presented in the appeals letter.
The Deputy Comptroller for Large Bank Supervision will forward a copy of the SNC appeal to the EIC of the agent bank. Each individual shall provide his or her formal comments and opinions to the appropriate Deputy Comptroller for Large Bank Supervision within 10 days of receipt of the appeal. A Deputy Comptroller for Large Bank Supervision will normally grant requests by bank management for a meeting to discuss the issues in dispute.
An interagency panel consisting of senior credit examiners that are independent of the original voting team will evaluate the appeal and recommend a decision to senior management. (Senior management of the appropriate agency has final authority.) Large Bank Supervision normally concludes the entire SNC appeals process within 30 days of receipt. Immediately after issuing a decision letter, the appropriate Deputy Comptroller for Large Bank Supervision will forward to the Ombudsman copies of all relevant materials considered in preparation of the response, including all written submissions by the bank. If a bank disagrees with the decision rendered through the SNC appeals process, it may further appeal the matter to the Ombudsman. The appeals decision letter from the Deputy Comptroller to the bank must notify the bank of this option. The bank must file written notice of this second-tier appeal to the Ombudsman within 30 days of receiving the decision letter from the Deputy Comptroller for Large Bank Supervision.
For more information concerning the appeal of an SNC decision, please contact the Headquarters SNC Program Manager in Large Bank Supervision at (202) 649-6210.
J. Matters Related to Fair Lending
n to the U.S. Department of Housing and Urban Development, the Senior Deputy Comptroller for Midsize and Community Bank Supervision or the Senior Deputy Comptroller for Large Bank Supervision (whichever oversees the bank) will provide written notice to the bank of this finding. Banks may file an appeal to the Ombudsman for reconsideration of this decision within 15 days of the date of this notice.
K. Section 914 of FIRREA
Issues in dispute relating to section 914 of FIRREA, are not appealable to a supervisory office or the Ombudsman. The following procedures describe the appeals process designated for decisions relating to disapproval of a candidate’s application to become a member of a bank’s board of directors or a senior executive officer of a bank.
If a candidate’s application to become a member of the board of directors or a senior executive officer of a bank is disapproved, the disapproval letter will state why the candidate was not accepted. Within 15 days of receiving this letter, the bank or the unsuccessful candidate may submit an appeal for review by the Comptroller. The appeal must state why the reasons for disapproval are contrary to fact or insufficient to justify disapproval. Supporting documentation shall be attached.
The Comptroller, or an authorized designee not previously involved in the disapproval, will evaluate and make a final determination on the appeal. The appeal will be granted and the disapproval overturned if the reasons given for the disapproval are ruled contrary to fact or insufficient to justify the disapproval.
As a matter of procedure, the bank or proposed person shall file the appeal with the bank’s supervisory office. The supervisory office will forward the appeal directly to the Comptroller or authorized designee for review.
Within 45 calendar days, the Comptroller or his or her authorized designee will notify the appellant in writing of the decision. If the original decision is overturned, the appellant can assume the position in the bank. Otherwise, the bank can propose another person or leave the position vacant, if appropriate.
L. Effect of Filing a Formal or Informal Appeal
As a general matter, decisions and actions in dispute are not stayed during the pursuit of an appeal. In the appropriate circumstances, however, the Ombudsman or the appropriate OCC official, upon written request of a bank, may relieve the bank of the obligation to comply with a supervisory decision or action while the supervisory appeal is pending.
M. Follow-Up by the Ombudsman
After the appropriate OCC official renders a decision on a formal appeal, the Ombudsman will contact the bank to ask whether the bank believes OCC examiners have taken actions against the bank in retaliation for its appeal. The Ombudsman will contact bank management (1) 60 days after the date of the decision letter and (2) 60 days after completion of the first examination of the appellant bank following its appeal. A bank may also contact the Ombudsman any time during or after the appeal if the bank believes that retaliation has occurred.
If a bank claims that retaliatory actions have taken place, the Ombudsman will investigate the complaint. In the absence of extenuating circumstances, the Ombudsman will complete the investigation within 30 days. If the Ombudsman finds that retaliation has occurred, he or she will forward the complaint directly to the Inspector General. Appropriate action, including disciplinary action consistent with OCC policies, will be taken as warranted. In addition, to prevent future retaliation, the Ombudsman may recommend to the Comptroller that the next examination of the bank exclude personnel involved in the ruling appealed by the bank. The Comptroller will make the final decision on any such exclusion.
N. Liaison Activity of the Ombudsman
In addition to evaluating formal appeals brought by banks, the Ombudsman can provide assistance with any problem or question the party may have in dealing with the OCC resulting from the OCC’s regulatory activities. The Ombudsman either provides the requested information or directs the person to the appropriate point of contact. In so doing, the Ombudsman ensures that safeguards exist to encourage persons to come forward and to preserve the confidentiality of those seeking information or identifying a concern.
IV. FEDERAL RESERVE BOARD GUIDELINES
1. Any appeal taken must be in writing and approved by the bank’s board of directors.
2. Allowable appeals are those of any “material” supervisory determination, including composite examination ratings, the adequacy of loan loss reserves, and significant loan classifications. Appeals do not include a determination to appoint a conservator or receiver or a decision to take prompt corrective action pursuant to § 38 of the Federal Deposit Insurance Act. Existing procedures allowing banks to challenge determinations, including the issuance of capital directives, the issuance of administrative enforcement actions, the imposition of cease and desist, removal and prohibition, suspension and civil money penalty orders, and actions to terminate Federal Reserve System membership already are subject to appeal and are not included in the guidelines.
3. Appeals are heard by the Federal Reserve Bank’s Review Panel, comprised of a person or persons who did not participate in the determination or report to the person who made the determination under review. An appeal shall be filed within 30 days of adverse action and decided by the review panel within 30 calendar days of filing.
4. If the bank is dissatisfied with the review panel’s decision, the bank (with consent from its board of directors) may appeal to the Federal Reserve Bank’s President. The written appeal by the bank must be filed within 30 calendar days of receipt of the review panel’s written decision. The appeal must be decided by the Reserve Bank President, in writing, within 30 calendar days of the filing of an informationally complete appeal. In turn, the final decision of the Federal Reserve Bank President may be appealed by the bank (with consent from its board of directors) to the director of the appropriate division of the Board of Governors, who in consultation with the appropriate oversight Governor, may review an adverse determination by the Federal Reserve Bank. An appeal to the Federal Reserve Board must be filed within 30 days of adverse action by the Federal Reserve Bank President and decided by the Board within 60 days of receipt.
5. Each Federal Reserve Bank is to establish safeguards to protect appellants from retaliation and the Board’s Ombudsman will periodically contact banks after their appeals have been decided to make certain that no retaliation has occurred.
V. NEBRASKA DEPARTMENT OF BANKING AND FINANCE
The appeals process before the Nebraska Department of Banking and Finance is governed by the statutory framework set forth in the Administrative Procedure Act, found at Neb.Rev.Stat. § 84-901 et seq. In addition, 49 Neb.Admin.Code § 4 identifies the rules of practice and procedure for hearings in contested cases involving the Nebraska Department of Banking and Finance. In a contested matter, the case begins with the filing of a complaint by the Department or a request for a hearing by a party with the Department. Detailed hearing guidelines describing prehearing procedures, discovery, submission of evidence and conduct during the hearing are set forth in the guidelines found in the Nebraska Administrative Code.
Informal appeals may be initiated by direct contact with the Director of the Department.