Examination Review / Appeals Process

Issue

Ability of insured depository institutions to appeal exam findings.

Position statement

Banks and savings associations need a better avenue for appealing examination findings.  This issue is particularly important now, given the role of CAMELS ratings in risk-based deposit insurance premium assessments.

Explanation

Each banking regulator currently has formal appeals processes in place that a bank may use if it disagrees with an exam finding.  However, these processes are time-consuming, expensive, and rarely result in a reversal of the matter being appealed.  There also is a concern among ABA members that appealing will risk examiner retribution.

The agencies need to adopt more informal means of appealing exam findings.  One approach would be to vest each agency's ombudsman with the resources that the office needs to be a credible avenue of appeal.  That would include having a direct reporting line to the head of the agency, sufficient staff that is seasoned and well-respected within the agency to engage examiners in a productive dialogue, and the right to overrule an exam finding (subject only to being overruled by the agency head).

ABA staff has initiated conversations with each of the banking agencies about creating such a process and will continue to work with ABA members and the agencies to promote the effectiveness and independence of the process for reviewing and/or appealing regulatory examination findings.

 

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