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In a move viewed favorably by FDIC-regulated institutions, the FDIC has approved amendments to the agency's Guidelines for Appeals of Material Supervisory Determinations that were proposed back in July of 2025 new supervisory appeals office will now establish review panels that include someone with bank supervisory experience and someone with industry experience.
The amendments call for replacing the current Supervisory Appeals Review Committee (SARC) with an "independent, standalone Office" as part of the agency.
"The Office of Supervisory Appeals will be the final level of review of material supervisory determinations, independent of the Divisions that make supervisory determinations," the agency said. "The Office will be staffed by reviewing officials who are hired externally, and each panel will have at least one reviewing official with bank supervisory experience and at least one reviewing official with industry experience."
"Including individuals with industry experience will broaden the perspectives reflected on a panel and allow the appellate process to benefit from a diversity of views, while still ensuring that panelists have deep familiarity with the supervisory process," FDIC Chairman Travis Hill said.
He added that the final guidelines would "expand institutions' appellate rights by allowing appeals in certain cases where a formal enforcement action is proposed or pending. Under the final guidelines, the facts and circumstances underlying a proposed formal enforcement action would be in scope for appeals to the Office under certain circumstances, which would allow an independent review in cases where supervisory determinations may have significant consequences for an institution."
In particular, the FDIC will now allow appeals of the facts and circumstances underlying a proposed or pending enforcement action as long as the enforcement action is not based, in whole or in part, on allegations of: (1) unsafe or unsound practices or (2) violations of AML/CFT laws or regulations or the institution's sanctions compliance.
Hill said that, as he noted when the proposal was first unveiled, "The intent of the Office, which would be staffed by officials hired externally whose sole job would be reviewing and adjudicating supervisory appeals, is to promote an independent, apolitical, and consistent appeals process."
The guidelines would become effective upon the FDIC determination that the office is sufficiently operational to carry out its functions.
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