Washington, D.C. (June 22, 2022) — The Independent Community Bankers of America (ICBA) and other groups called on the Federal Deposit Insurance Corp. to reconsider its decision to eliminate the Office of Supervisory Appeals (OSA) and reinstate the agency’s Supervision Appeals Review Committee (SARC).
In a joint letter following last month’s FDIC board of directors vote to disband the OSA less than six months after the independent appeals forum became operational, the groups said the SARC has long been an underutilized forum for supervisory appeals because it is not an independent or impartial decision-making body. They also noted the FDIC did not give the public time to supply comments in advance, soliciting feedback only after instituting the change.
“The right to appeal government actions and have those appeals adjudicated by a fair and impartial decisionmaker are essential, foundational tenets of due process,” said the groups, which also included the American Association of Bank Directors, American Bankers Association, Bank Policy Institute, Consumer Bankers Association, and Midsize Bank Coalition of America. “We urge the FDIC to re-adopt the carefully considered and then hastily replaced OSA. 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.”
Under revised Guidelines for Appeals of Material Supervisory Determinations issued last month, the FDIC replaced the OSA with the SARC as the final level of review in the agency’s supervisory appeals process—reversing guidelines released in December. The change was effective immediately with a 30-day public comment period.
Responding to that decision last month, ICBA President and CEO Rebeca Romero Rainey said reconstituting board-level review using the SARC calls into question the agency’s commitment to a more independent supervisory appeals process. In a 2020 comment letter in support of the OSA replacing the SARC, ICBA said establishing a separate appeals office independent of the federal banking agencies is the best approach to establishing a more transparent and independent appeals process.
About ICBA
The Independent Community Bankers of America® creates and promotes an environment where community banks flourish. ICBA is dedicated exclusively to representing the interests of the community banking industry and its membership through effective advocacy, best-in-class education, and high-quality products and services.
With nearly 50,000 locations nationwide, community banks constitute roughly 99 percent of all banks, employ nearly 700,000 Americans and are the only physical banking presence in one in three U.S. counties. Holding nearly $5.9 trillion in assets, over $4.9 trillion in deposits, and more than $3.5 trillion in loans to consumers, small businesses and the agricultural community, community banks channel local deposits into the Main Streets and neighborhoods they serve, spurring job creation, fostering innovation and fueling their customers’ dreams in communities throughout America. For more information, visit ICBA’s website at www.icba.org.
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