81 FR 51441 - Guidelines for Appeals of Material Supervisory Determinations

FEDERAL DEPOSIT INSURANCE CORPORATION

Federal Register Volume 81, Issue 150 (August 4, 2016)

Page Range		51441-51446
FR Document		2016-18507
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.
Federal Register, Volume 81 Issue 150 (Thursday, August 4, 2016)
[Federal Register Volume 81, Number 150 (Thursday, August 4, 2016)]
[Notices]
[Pages 51441-51446]
From the Federal Register Online  [www.thefederalregister.org]
[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: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Agency Web site: http://www.fdic.gov/regulations/laws/federal/ gov/regulations/laws/
federal/ . Follow the instructions for submitting comments.
     Email: [email protected]. 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
Federal Register / Vol. 81, No. 150 / Thursday, August 4, 2016 / Notices 51441

OMB Number: 3064–0070. imposing reporting, disclosure and ACTION: Notice and request for comment.
Affected Public: Insured financial recordkeeping requirements on some
institutions. community reinvestment-related SUMMARY: The Federal Deposit
Annual Number of Respondents: 752. agreements between insured depository Insurance Corporation (‘‘FDIC’’)
Frequency of Response: On occasion. institutions or affiliates, and proposes to amend its Guidelines for
Estimated Time per Response: 10 nongovernmental entities or persons. Appeals of Material Supervisory
hours. 5. Title: Asset Sales Forms. Determinations (Guidelines) so that
Total Annual Burden: 7,520 hours. OMB Number: 3064–0192. institutions have additional avenues of
General Description: Insured Affected Public: Insured state redress with respect to these
institutions must obtain the written nonmember banks and their affiliates determinations and for greater
consent of the FDIC before establishing and nongovernmental entities and consistency with the appeals process of
or moving a main office or branch. persons. the other Federal banking agencies.
2. Title: Application for Consent to Frequency of Response: On occasion. Consistent with Section 309(a) of the
Reduce or Retire Capital. Estimated Number of Respondents: Riegle Community Development and
OMB Number: 3064–0079. 600 hours. Regulatory Improvement Act of 1994
Affected Public: Insured state Estimated Time per Response: .50 (‘‘Riegle Act’’), the FDIC, in 1995,
nonmember banks and state savings hours. established its Supervision Appeals
associations. Estimated Total Annual Burden: 300 Review Committee (SARC), an
Frequency of Response: On occasion. hours. independent intra-agency appellate
Estimated Number of Respondents: General Description: The FDIC uses process to review appeals by
80. the Purchaser Eligibility Certification institutions of ‘‘material supervisory
Estimated Time per Response: 11 form, FDIC Form No. 7300/06, to determinations,’’ and has amended the
hours. identify prospective bidders who are not Guidelines from time to time, as
Estimated Total Annual Burden: 880 eligible to purchase assets of failed appropriate.
hours. institutions from the FDIC. Specifically, DATES: Written comments on the
General Description: Insured state section 11(p) of the Federal Deposit Proposal must be received by the FDIC
nonmember banks proposing to change Insurance Act prohibits the sale of on or before October 3, 2016 for
their capital structure must submit an assets of failed institutions to certain consideration.
application containing information individuals or entities that profited or
about the proposed change to obtain engaged in wrongdoing at the expense ADDRESSES: Interested parties are
FDIC’s consent to reduce or retire of those failed institutions, or seriously invited to submit written comments to
capital. mismanaged those failed institutions. the FDIC by any of the following
3. Title: Appraisals Standards. methods:
OMB Number: 3064–01103. Request for Comment • Federal eRulemaking Portal: http://
Affected Public: Insured state Comments are invited on: (a) Whether www.regulations.gov. Follow the
nonmember banks and state savings the collection of information is instructions for submitting comments.
associations. necessary for the proper performance of • Agency Web site: http://www.fdic.
Estimated Number of Respondents: the FDIC’s functions, including whether gov/regulations/laws/federal/ . Follow
3,947. the information has practical utility; (b) the instructions for submitting
Frequency of Response: On occasion. the accuracy of the estimates of the comments.
Estimated Number of Responses per burden of the information collection, • Email: comments@fdic.gov. Include
Respondent: 105.6. including the validity of the ‘‘Guidelines for Appeals of Material
Estimated Time per Response: .75 methodology and assumptions used; (c) Supervisory Determinations’’ in the
hours. ways to enhance the quality, utility, and subject line of the message.
Estimated Total Annual Burden: clarity of the information to be • Mail: Robert E. Feldman, Executive
312,602 hours. collected; and (d) ways to minimize the Secretary, Attention: Comments/Legal
General Description: FIRREA directs burden of the information collection on ESS, Federal Deposit Insurance
the FDIC to prescribe appropriate respondents, including through the use Corporation, 550 17th Street NW.,
performance standards for real estate of automated collection techniques or Washington, DC 20429.
appraisals connected with federally other forms of information technology. • Hand Delivery: Comments may be
related transactions under its All comments will become a matter of hand-delivered to the guard station
jurisdiction. This information collection public record. located at the rear of the FDIC’s 550
is a direct consequence of the statutory 17th Street building (accessible from F
Dated at Washington, DC, this 1st day of Street) on business days between 7 a.m.
requirement. August, 2016.
4. Title: CRA Sunshine. and 5 p.m.
Federal Deposit Insurance Corporation.
OMB Number: 3064–0139. • Public Inspection: All comments
Robert E. Feldman, received, including any personal
Affected Public: Insured state
Executive Secretary. information provided, will be posted
nonmember banks and state savings
associations and their affiliates and [FR Doc. 2016–18506 Filed 8–3–16; 8:45 am] generally without change to https://
nongovernmental entities and persons. BILLING CODE 6714–01–P www.fdic.gov/regulations/laws/
Estimated Number of Respondents: federal/. Comments may be inspected
and photocopied in the FDIC Public
sradovich on DSK3GMQ082PROD with NOTICES

16.
Frequency of Response: On occasion. FEDERAL DEPOSIT INSURANCE Information Center, Room E–1005, 3501
Estimated Time per Response: 8.625 CORPORATION North Fairfax Drive, Arlington, VA
hours. 22226 between 9 a.m. and 4:00 p.m. on
Guidelines for Appeals of Material business days.
Estimated Total Annual Burden: 138 Supervisory Determinations
hours. FOR FURTHER INFORMATION CONTACT:
General Description: This collection AGENCY: Federal Deposit Insurance Christopher Newbury, Associate
implements a statutory requirement Corporation. Director, Division of Risk Management

VerDate Sep<11>2014 18:12 Aug 03, 2016 Jkt 238001 PO 00000 Frm 00012 Fmt 4703 Sfmt 4703 E:\FR\FM\04AUN1.SGM 04AUN1
51442 Federal Register / Vol. 81, No. 150 / Thursday, August 4, 2016 / Notices

Supervision, (202) 898–3504; Sylvia ‘‘material supervisory determinations’’ a 12855.) On July 9, 2004, the FDIC
Plunkett, Senior Deputy Director, decision to appoint a conservator or published in the Federal Register a
Division of Depositor and Consumer receiver for an insured depository notice of guidelines which, effective
Protection, (202) 898–6929; and James institution or to take prompt corrective June 28, 2004, adopted the revised
Watts, Senior Attorney, Legal Division, action pursuant to section 38 of the Guidelines, largely as proposed. (69 FR
(202) 898–6678. Federal Deposit Insurance Act (‘‘FDI 41479.)
SUPPLEMENTARY INFORMATION: The FDIC Act’’), 12 U.S.C. 1831o. Finally, section On May 27, 2008, the FDIC published
is publishing for notice and comment 309(g) (12 U.S.C. 4806(g)) expressly in the Federal Register, for a 60-day
proposed amendments to the Guidelines provides that the Riegle Act’s comment period, a notice and request
for Appeals of Material Supervisory requirement to establish an appeals for comments regarding proposed
Determinations. The FDIC considers it process shall not affect the authority of revisions to the Guidelines. (73 FR
desirable in this instance to seek the Federal banking agencies to take 30393.) On September 23, 2008, the
comments regarding these amendments enforcement or supervisory actions FDIC published in the Federal Register
to the Guidelines, although notice and against an institution. a notice of guidelines which, effective
comment is not required. The proposed On December 28, 1994, the FDIC September 16, 2008, adopted revised
amendments would be effective upon published in the Federal Register, for a Guidelines modifying the supervisory
adoption so that institutions have 30-day comment period, a notice of and determinations eligible for appeal to
additional avenues of redress with request for comments on proposed eliminate the ability of an FDIC-
respect to material supervisory Guidelines for Appeals of Material supervised institution to file an appeal
determinations. Supervisory Determinations with the SARC for determinations or the
The proposed amendments would (1) (‘‘Guidelines’’) (59 FR 66965.) In the facts and circumstances underlying a
permit appeal of the level of compliance proposed Guidelines, the FDIC recommended or pending formal
with an existing formal enforcement proposed that the term ‘‘material enforcement-related action or decision,
action; (2) provide that a formal supervisory determinations,’’ in including the initiation of an
enforcement-related action or decision addition to the statutory exclusions investigation. The FDIC noted that these
does not affect an appeal that is pending noted above, also should not include: amendments better aligned the SARC
under the Guidelines; (3) make (1) Determinations for which other appellate process with the material
additional appeal rights available appeals procedures exist (such as supervisory determinations appeals
pursuant to the Guidelines with respect determinations relating to deposit procedures at the other Federal banking
to material supervisory determinations insurance assessment risk agencies. (73 FR 54822.)
in certain circumstances; and (4) make classifications); (2) decisions to initiate On April 19, 2010, the FDIC
other limited technical and conforming formal enforcement actions under published in the Federal Register a
amendments. section 8 of the FDI Act; (3) decisions notice of guidelines which, effective
to initiate informal enforcement actions April 13, 2010, adopted revised
Background (such as memoranda of understanding); Guidelines extending the decision
Section 309(a) of the Riegle (4) determinations relating to a violation deadline for requests for review and
Community Development and of a statute or regulation; and (5) any clarifying the decisional deadline for
Regulatory Improvement Act of 1994 other determinations not specified in written decisions by the SARC. (75 FR
(Pub. L. 103–325, 108 Stat. 2160) the Riegle Act as being eligible for 20358.)
(‘‘Riegle Act’’), required the FDIC (as appeal. On March 23, 2012, the FDIC
well as the other Federal banking Commenters to the proposed published in the Federal Register a
agencies and the National Credit Union Guidelines suggested that the proposed notice of guidelines which, effective
Administration Board) to establish an limitations on determinations eligible March 20, 2012, adopted revised
independent intra-agency appellate for appeal were too restrictive. In Guidelines that included technical and
process to review material supervisory response to comments received, the ministerial revisions to reflect changes
determinations. The Riegle Act defines FDIC modified the proposed Guidelines. in the organization of the FDIC’s Board,
the term ‘‘independent appellate The FDIC added a final clarifying of its offices and divisions, and in the
process’’ to mean a review by an agency sentence to the listing of categories of institutions that it
official who does not directly or ‘‘Determinations Not Eligible for supervises. (77 FR 17055.)
indirectly report to the agency official Appeal’’ in the Guidelines as follows:
Proposed Amendments
who made the material supervisory ‘‘The FDIC recognizes that, although
determination under review. In the determinations to take prompt As noted above, the FDIC adopted
appeals process, the FDIC is required to corrective action or initiate formal or amendments to the Guidelines in 2008
ensure that: (1) An appeal of a material informal enforcement actions are not modifying the supervisory
supervisory determination by an appealable, the determinations upon determinations eligible for appeal to
insured depository institution is heard which such actions may be based (e.g., eliminate the ability of an FDIC-
and decided expeditiously; and (2) loan classifications) are appealable supervised institution to file an appeal
appropriate safeguards exist for provided they otherwise qualify.’’ (60 with the SARC for determinations or the
protecting appellants from retaliation by FR 15929, March 28, 1995.) On March facts and circumstances underlying a
agency examiners. 21, 1995, the FDIC’s Board of Directors recommended or pending formal
The term ‘‘material supervisory adopted the proposed Guidelines. (60 enforcement-related action or decision,
determinations’’ is defined in the Riegle including the initiation of an
sradovich on DSK3GMQ082PROD with NOTICES

FR 15923.)
Act to include determinations relating On March 18, 2004, the FDIC investigation. However, based on the
to: (1) Examination ratings; (2) the published in the Federal Register, for a FDIC’s experience in administering the
adequacy of loan loss reserve 30-day comment period, a notice and current appellate process, the FDIC
provisions; and (3) classifications on request for comments regarding believes that there are changes that
loans that are significant to an proposed revisions to the Guidelines, could be beneficial to allow for
institution. The Riegle Act specifically which would change the composition additional avenues of redress with
excludes from the definition of and procedures of the SARC. (69 FR respect to certain material supervisory

VerDate Sep<11>2014 18:12 Aug 03, 2016 Jkt 238001 PO 00000 Frm 00013 Fmt 4703 Sfmt 4703 E:\FR\FM\04AUN1.SGM 04AUN1
51446 Federal Register / Vol. 81, No. 150 / Thursday, August 4, 2016 / Notices

promptly notify the appropriate State The Office of the Ombudsman will work Information Collection Open for
regulatory authority of the request, with the appropriate Division Director Comment
provide the regulatory authority with a to resolve the allegation of retaliation. Title: 46 CFR part 532—NVOCC
copy of the institution’s request for By order of the Board of Directors. Negotiated Rate Arrangements.
review and any other related materials, Dated at Washington, DC, the 28th day of OMB Approval Number: 3072–0071
and solicit the regulatory authority’s July, 2016. (Expires July 31, 2016).
views regarding the merits of the request Abstract: Section 16 of the Shipping
Federal Deposit Insurance Corporation.
before making a determination. In the Act of 1984, 46 U.S.C. 40103, authorizes
Robert E. Feldman,
event that an appeal is subsequently the Commission to exempt by order or
filed with the SARC, the SARC will Executive Secretary.
[FR Doc. 2016–18507 Filed 8–3–16; 8:45 am]
regulation ‘‘any class of agreements
notify the institution and the State between persons subject to this [Act] or
regulatory authority of its decision. BILLING CODE 6714–01–P
any specified activity of those persons
Once the SARC has issued its
from any requirement of this [Act] if the
determination, any other issues that
Commission finds that the exemption
may remain between the institution and FEDERAL MARITIME COMMISSION will not result in substantial reduction
the State authority will be left to those
Agency Information Collection in competition or be detrimental to
parties to resolve.
Activities: Submission for OMB commerce.’’ The Commission may
R. Effect on Supervisory or Enforcement Review; Comment Request attach conditions to any exemption and
Actions may, by order, revoke an exemption. In
The use of the procedures set forth in AGENCY:Federal Maritime Commission. 46 CFR part 532, the Commission
these guidelines by any institution will Final notice of submission for
ACTION: exempted non-vessel-operating common
not affect, delay, or impede any formal OMB review. carriers (NVOCCs) from the tariff rate
or informal supervisory or enforcement publication requirements of part 520,
SUMMARY: In accordance with the and allowed an NVOCC to enter into an
action in progress or affect the FDIC’s
Paperwork Reduction Act of 1995, the NVOCC Negotiated Rate Arrangement
authority to take any supervisory or
Federal Maritime Commission (FMC or (NRA) in lieu of publishing its tariff
enforcement action against that
Commission) hereby gives notice that it rate(s), provided the NVOCC posts a
institution.
has submitted to the Office of prominent notice in its rules tariff
S. Effect on Applications or Requests for Management and Budget a request for invoking the NRA exemption and
Approval an extension of the existing collection provides electronic access to its rules
Any application or request for requirements under 46 CFR part 532— tariff to the public free of charge. This
approval made to the FDIC by an NVOCC Negotiated Rate Arrangements. information collection corresponds to
institution that has appealed a material The FMC has requested an extension of the rules tariff prominent notice and the
supervisory determination that relates an existing collection as listed below. requirement to make its tariff publicly
to, or could affect the approval of, the DATES: Written comments must be available free of charge.
application or request will not be submitted on or before September 6, Current Actions: There are no changes
considered until a final decision 2016. to this information collection, and it is
concerning the appeal is made unless ADDRESSES: Comments should be being submitted for extension purposes
otherwise requested by the institution. addressed to: only.
Type of Review: Extension.
T. Prohibition on Examiner Retaliation Office of Information and Regulatory
Needs and Uses: The Commission
The FDIC has an experienced Affairs, Office of Management and
uses the information filed by an NVOCC
examination workforce and is proud of Budget, Attention: Desk Officer for
in its rules tariff to determine whether
its professionalism and dedication. FMC, 725 17th Street NW.,
the NVOCC has invoked the exemption
FDIC policy prohibits any retaliation, Washington, DC 20503, OIRA_
for a particular shipment or shipments.
abuse, or retribution by an agency Submission@OMB.EOP.GOV, Fax
The Commission has used and will
examiner or any FDIC personnel against (202) 395–5806 and to:
continue to use the information required
an institution. Such behavior against an Vern Hill, Managing Director, Office of to be maintained by NVOCCs for
institution that appeals a material the Managing Director, Federal monitoring and investigatory purposes,
supervisory determination constitutes Maritime Commission, 800 North and, in its proceedings, to adjudicate
unprofessional conduct and will subject Capitol Street NW., Washington, DC related issues raised by private parties.
the examiner or other personnel to 20573, (202) 523–5800, omd@fmc.gov. Frequency: An NVOCC invokes the
appropriate disciplinary or remedial FOR FURTHER INFORMATION CONTACT: NRA exemption by publishing a
action. Institutions that believe they Copies of the submission(s) may be prominent notice in its rules tariff once.
have been retaliated against are obtained by contacting Donna L. Lee on Type of Respondents: NVOCCs.
encouraged to contact the Regional 202–523–5800 or email: dlee@fmc.gov. Number of Annual Respondents: 255.
Director for the appropriate FDIC region. SUPPLEMENTARY INFORMATION: A notice New NVOCCs become licensed or
Any institution that believes or has any that FMC would be submitting this registered with the Commission
evidence that it has been subject to request was published in the Federal regularly. Of those, approximately 255
retaliation may file a complaint with the Register on April 27, 2016 (81 FR invoke the exemption by publishing a
Director, Office of the Ombudsman, tariff rule or prominent notice.
sradovich on DSK3GMQ082PROD with NOTICES

24814) allowing for a 60-day comment
Federal Deposit Insurance Corporation, period. No comments were received. Estimated Time per Response: 15
550 17th Street, Washington, DC 20429, The FMC hereby informs potential minutes for those adding a tariff rule to
explaining the circumstances and the respondents that an agency may not use a combination of tariff rates and
basis for such belief or evidence and conduct or sponsor, and that a person is NRAs. One hour for those who make
requesting that the complaint be not required to respond to, a collection their tariff rules publicly available by
investigated and appropriate of information unless it displays a opting to use NRAs exclusively and
disciplinary or remedial action taken. currently valid OMB control number. posting them to their Web site.

VerDate Sep<11>2014 18:12 Aug 03, 2016 Jkt 238001 PO 00000 Frm 00017 Fmt 4703 Sfmt 4703 E:\FR\FM\04AUN1.SGM 04AUN1
Document Created: 2016-08-04 02:53:06
Document Modified: 2016-08-04 02:53:06
Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Notices
Action		Notice and request for comment.
Dates		Written comments on the Proposal must be received by the FDIC on or before October 3, 2016 for consideration.
Contact		Christopher Newbury, Associate Director, Division of Risk Management 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.
FR Citation		81 FR 51441