SR 20-28 / CA 20-14:
Internal Appeals Process for Material Supervisory Determinations and Policy Statement Regarding the Ombudsman for the Federal Reserve System
OF THE FEDERAL RESERVE SYSTEM
WASHINGTON, D.C. 20551
DIVISION OF
SUPERVISION AND REGULATION
DIVISION OF CONSUMER
AND COMMUNITY AFFAIRS
December 4, 2020
TO THE OFFICER IN CHARGE OF SUPERVISION AT EACH FEDERAL RESERVE BANK
Internal Appeals Process for Material Supervisory Determinations and Policy Statement Regarding the Ombudsman for the Federal Reserve System
Applicability: This guidance applies to institutions, including those with $10 billion or less in total consolidated assets, that receive a material supervisory determination by the Federal Reserve.
On April 1, 2020, the Federal Reserve Board updated its policy statement governing the internal appeals process for material supervisory determinations and revised the Board’s Ombudsman policy.1 As explained in the attached policy statement, the Board is committed to maintaining an independent, intra-agency process to review appeals of material supervisory determinations that complies with Section 309 of the Riegle Community Development and Regulatory Improvement Act of 1994.2 The Board is also committed to maintaining an effective Ombudsman to serve as a resource for individuals and institutions that are affected by the Federal Reserve’s regulatory and supervisory actions.
Overview of Amended Appeals Process
As set forth in the policy statement, the Board amended its appeals process to improve and expedite the process. For instance, the amended appeals process specifies the standards of review that the Board will follow, and describes the selection of the review panel members. The amended appeals process also decreases the processing time for appeals, and provides an expedited timeline for appeals of determinations that relate to or that would cause an institution to become critically undercapitalized under the Prompt Corrective Action framework. Other changes to the appeals process include reducing the number of review levels from three under the prior process to two, and increasing transparency through public disclosure of final appeal decisions in redacted or summary form determined by the Board.
Overview of the Ombudsman Policy
The amended Ombudsman policy formalizes many of the current practices of the Ombudsman, including receiving supervisory-related complaints and material supervisory determination appeals. In addition, the amended policy clarifies that the Ombudsman may attend meetings or deliberations relating to an appeal as an observer, if requested by the institution or Federal Reserve staff. The amended policy also formalizes the Ombudsman’s role as the decision-maker with respect to claims of retaliation.
Reserve Banks are asked to distribute this letter to the supervised institutions in their districts and to appropriate supervisory staff. Questions regarding this letter may be sent via the Board’s public website.3 Questions regarding this letter may also be directed to the Board Ombudsman’s Office, 1-800-337-0429.
signed by
Michael S. Gibson
Director
Division of
Supervision and Regulation
signed by
Eric S. Belsky
Director
Division of Consumer
and Community Affairs
- SR letter 95-18, "Section 309 of the Riegle Community Development and Regulatory Improvement Act of 1994, Intra-Agency Appeals Process"
Notes:
- With the issuance of this SR/CA letter, SR letter 95-18, "Section 309 of the Riegle Community Development and Regulatory Improvement Act of 1994, Intra-Agency Appeals Process," is superseded.
A "material supervisory determination" includes, but is not limited to, any material determination relating to examination or inspection composite ratings, material examination or inspection component ratings, the adequacy of loan loss reserves and/or capital, significant loan classification, accounting interpretation, Matters Requiring Attention, Matters Requiring Immediate Attention, Community Reinvestment Act ratings (including component ratings), and consumer compliance ratings. The term does not include any supervisory determination for which an independent right of appeal exists or a referral to another government agency. Return to text. - Refer to 12 U.S.C. 4806. Return to text.
- See http://www.federalreserve.gov/apps/contactus/feedback.aspx. Return to text.