US FDIC Launches the Office of Supervisory Appeals

This week, the US Federal Deposit Insurance Corporation (FDIC) launched its Office of Supervisory Appeals (OSA), a standalone unit that replaces the Supervision Appeals Review Committee as the final level of review for material supervisory determinations challenged by FDIC-supervised institutions.

The OSA operates independently of the divisions that make supervisory determinations. Institutions may appeal after review by the appropriate division director. Each panel will include at least one official with bank supervisory experience and one with industry experience, and all reviewing officials are subject to confidentiality and conflict-of-interest requirements. The FDIC said the Office “will make independent supervisory determinations without deferring to the judgments of either party.”

Three officials were appointed to the panel: Tim Ayala, who most recently served as Executive Vice President and Chief Risk Officer at Pinnacle Financial Partners and previously held senior roles at the FDIC; John Conneely, a 35-year FDIC veteran who led the Division of Complex Institutions Supervision & Resolution; and Duke Sheow, who most recently served as Senior Managing Director at PricewaterhouseCoopers (PwC) and previously worked as a senior commissioned examiner at the FDIC and the Federal Reserve Bank of San Francisco.

With the OSA becoming fully operational, the revised Guidelines for Appeals of Material Supervisory Determinations approved by the FDIC Board of Directors in January have taken effect. The reforms include expanding institutions’ appeal rights to cover certain material supervisory determinations associated with proposed or pending enforcement actions.