The FDIC is proposing to replace its Supervision Appeals Review Committee (SARC) with an independent, standalone office, known as the Office of Supervisory Appeals (OSA).
Under the proposal, the OSA would be the final level of review of material supervisory determinations, independent of the divisions that make supervisory decisions. FDIC officials believe the changes would facilitate an appeals process that would be consistent over time.
The FDIC is currently accepting public comments on the proposal. The deadline for submitting comments is September 16.
"Establishing the office as a standalone entity within the FDIC whose sole function is to resolve appeals would ensure that reviewing officials have the capacity to review each case with the proper level of attention and diligence, and would be scalable should the volume of appeals increase," Acting FDIC Chairman Travis Hill recently said, in explaining the FDIC's proposed change.
Hill said the SARC typically consists of FDIC board members and deputies of FDIC board members. He added that people who serve on the SARC have many other duties and may not have participated in a bank exam.
In 2020, the FDIC proposed replacing the SARC with an independent, standalone office staffed with officials whose only job would be reviewing and deciding on supervisory appeals. Hill said the office became fully operational, but following a leadership change at the agency, it was disbanded before hearing a single appeal.
"The rationale for instituting the new office four years ago remains the same today," Hill said.
He said that a "more robust appeals process with an independent body will further help ensure that examiners are applying policies consistently across the country."
Hill added that, by recruiting outside the agency, the agency anticipates attracting impartial candidates who are less likely to have established relationships with people involved in the supervisory process. However at least one individual on any three-person appeals panel would need to have direct supervisory experience from a supervisory agency, according to Hill.
He said that in comparison to previous guidelines, the proposal would expand the pool of potential candidates eligible to serve on term appointments as reviewing officials by broadening the types of experience the FDIC would accept. Under the proposal such candidates would include former bankers and former industry professionals with relevant supervisory experience and might also include employees with relevant experience from other government agencies who would serve through inter-agency agreements.
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