BPI Comments on FDIC’s Proposed Guidelines for Appeals of Supervisory Determinations

Ladies and Gentlemen:

The Bank Policy Institute^[1] and the American Association of Bank Directors^[2] appreciate the opportunity to comment on the FDIC's proposed revisions to its Guidelines for Appeals of Material Supervisory Determinations (Proposed Guidelines).^[3] The proposed amendments reflect thoughtful improvements to an unfortunately seldom-used formal appeals process that is in need of thorough reform. These welcome changes, along with the recommended refinements discussed below, should help to bolster the banking industry's confidence in the impartiality and consistency of the intra-agency appeals process mandated by Section 309(a) of the Riegle Community Development and Regulatory Improvement Act of 1994 (Riegle Act).^[4]

The FDIC's Proposed Guidelines seek to replace the FDIC's existing Supervision Appeals Review Committee (SARC) by reconstituting an Office of Supervisory Appeals as a standalone unit within the FDIC (Office).^[5] This new Office would be the final review body for supervisory appeals and staffed with reviewing officials with appropriate experience and independence who are recruited externally to serve on a part-time basis for a fixed term. Reviewing officials would be subject to certain requirements, including conflict-of-interest and confidentiality standards, to promote the independence of the appeals process and be consistent with statutory requirements.

Based on experience and precedent, banks generally believe there is little likelihood of success in appealing a material supervisory determination and that the potential risk of retribution from within the agency (whether real or just perceived) too often outweighs any potential benefit of pursuing an appeal.

We agree with the FDIC that the proposed combined changes will provide meaningful advantages over the existing supervisory appeals process. The new structure would help avoid actual and perceived conflicts of interest while also ensuring that individuals deciding on appeals have relevant knowledge and expertise. For these reasons, we support the reestablishment of the Office and the objectives of the Proposed Guidelines to "facilitate a robust, independent supervisory appeals process that would be consistent over time."^[6]

We also agree with the FDIC's view expressed in the Proposed Guidelines that institutions should have an opportunity to raise matters and to resolve disputes with on-site examiners and/or the appropriate Regional Office as part of the examination process. Robust supervisory dialogue and review processes should serve as an appropriate forum to address concerns, without banks having to resort to the formal appeals process.

To read the full comment letter, please click here, or click on the download button below.

[1] The Bank Policy Institute is a nonpartisan public policy, research and advocacy group that represents universal banks, regional banks, and the major foreign banks doing business in the United States. The Institute produces academic research and analysis on regulatory and monetary policy topics, analyzes and comments on proposed regulations, and represents the financial services industry with respect to cybersecurity, fraud, and other information security issues.

[2] The American Association of Bank Directors is a non-profit organization that represents the interests of bank directors throughout the United States. Founded in 1989, AABD is the only trade group in the United States devoted solely to bank directors and their information, education, and advocacy needs.

[3] Proposed Amendments to FDIC Guidelines for Appeals of Material Supervisory Determinations, 90 Fed. Reg. 33,942-33,949 (July 18, 2025),Federal Register: Guidelines for Appeals of Material Supervisory Determinations.

[4] 12 U.S.C. § 4806. As we have noted in previous letters to the FDIC and the other Federal banking agencies, the agencies and the industry have a common interest in getting examination results right and having banks trust the supervisory appeals process.

[5] According to the Proposed Guidelines, the structure of the Office is largely consistent with that of the independent appeals office with the same name established in 2021 and summarily disbanded shortly thereafter in 2022.

[6] See 90 Fed. Reg. at 33943.