House of Representatives Financial Services Committee Republicans have forwarded correspondence to Federal Deposit Insurance Corporation (FDIC) leadership regarding the agency’s examinational appeals process.
Rep. Tom Emmer (R-MN) joined 22 colleagues in signing off on the letter to FDIC Acting Chairman Martin Gruenberg, maintaining the appeals process is politicized and retaliatory.
While the FDIC conducts examinations of the financial institutions under its supervision as a means of ensure regulatory compliance, in 1994 Congress required the FDIC to establish an independent process protecting financial institutions from bias and retaliation by FDIC staff if the financial institution seeks to revisit an FDIC examination.
The lawmakers assert the FDIC instead established the Supervision Appeals Review Committee (SARC), staffed it with political insiders and maintained the SARC was underutilized by supervised entities for fear of later retaliation from FDIC examiners.
“The FDIC knew that their choice to revert to a partisan appeals process would be met with concern from legislators and stakeholders alike,” Emmer said. “Nevertheless, they chose to abandon an independent, apolitical body without even asking for public comment. The American people deserve answers on how and why this previously nonpartisan body was abandoned and how the FDIC made their decision to return to cronyism.”