ICBA, others seek reconsideration of FDIC’s decision to eliminate Office of Supervisory Appeals

The Independent Community Bankers of America (ICBA) has joined other groups in requesting the Federal Deposit Insurance Corporation (FDIC) reconsider its decision to eliminate the Office of Supervisory Appeals (OSA).

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The ICBA, as well as the American Association of Bank Directors, American Bankers Association, Bank Policy Institute, Consumer Bankers Association, and Midsize Bank Coalition of America, are also expressing concerns regarding the FDIC’s reinstatement of its Supervision Appeals Review Committee (SARC).

The groups forwarded joint correspondence to FDIC Assistant Executive Secretary James P. Sheesley following the FDIC Board of Directors’ vote to disband the OSA less than six months after the independent appeals forum became operational while maintaining the SARC has been an underutilized forum for supervisory appeals because it is not an independent or impartial decision-making body.

“We, the undersigned banking trade associations, write to collectively voice our concern with the FDIC’s recent decision to summarily eliminate the Office of Supervisory Appeals and reinstate the agency’s Supervision Appeals Review Committee,” the groups wrote. “The Associations strongly object to the FDIC’s decision on substantive and procedural grounds. Not only do we believe the SARC is a flawed
forum and decisionmaker for the intra-agency supervisory appeals process, but the agency’s announcement of this decision without any prior notice to the public or opportunity to comment fails to take into account fundamental due process rights.”

The groups maintain the right to appeal government actions and having those appeals adjudicated by a fair and impartial decisionmaker are essential foundational tenets of due process.

“At the very least, the FDIC should delay action until there is a comment period where the public has a legitimate opportunity to express its views, and the FDIC clearly explains its rationale for its decisions,” the groups concluded.