• Key Insight: The Federal Deposit Insurance Corp. is restructuring its supervisory appeals process.
• Supporting data: The final rule requires the three-member appeal panel to have at least one member with supervisory or examination experience and another with industry experience.
• Forward look: Comptroller of the Currency Jonathan Gould said the Office of the Comptroller of the Currency plans to issue a similar regulation in a forthcoming rulemaking.

The Federal Deposit Insurance Corp. Thursday issued a final rule revising its supervisory appeals process, incorporating commenters' requests requiring a former banker on the supervisory appeals panel and expanding banks' ability to appeal findings that contribute to enforcement-related cases.

Under the original proposal, which the agency submitted for comment last July, appeals of supervisory determinations would be reviewed by an independent three-member panel of non-FDIC employees, with at least one member of that board having bank supervisory or examination experience. In the final version of the rule, the panel would also require one of the three members to have worked at a bank or at a firm providing services to banks or banking-related services.

"Including individuals with industry experience will broaden the perspectives reflected on a panel and allow the appellate process to benefit from a diversity of views while still ensuring the panelists have deep familiarity with the supervisory process," said FDIC Chair Travis Hill Thursday. 

At the board meeting, Hill, Gould and acting Consumer Financial Protection Bureau Director Russell Vought voted unanimously to approve the rule. In addition to the new requirements on who can sit on the supervisory appeals panel, the final rule also expands banks' appellate rights by allowing appeals in certain cases where an enforcement action is proposed or pending.

Going forward, when the FDIC provides a bank with material supervisory determinations that undergird a potential enforcement action, the institution will now have the ability to appeal those determinations. Those appeals are limited to supervisory determinations that do not involve unsafe or unsound practices under Section 8 of the Federal Deposit Insurance Act or violations of laws or regulations related to anti-money laundering or sanctions evasion.

The agency says the move to replace the agency's existing Supervision Appeals Review Committee with a new, independent Office of Supervisory Appeals is intended to enhance independence, transparency and consistency in the appeals process.

"The Office would review appeals for consistency with the policies of the FDIC and the overall reasonableness of, and the support offered for, the positions advanced," the July 2025 proposal said. "Similar to the current SARC Guidelines and the 2021 Office of Supervisory Appeals Guidelines, the Office would make an independent supervisory determination. However, unlike the current Guidelines or the 2021 Guidelines, the proposed Guidelines would specify that the Office will make its determination without deferring to the judgments of either party."

The Office of Supervisory Appeals is designed as a distinct unit within the FDIC and will be staffed by experienced agency officials serving fixed terms reporting directly to the chair. The board would give it authority to review and decide appeals.

Comptroller Jonathan Gould, who supported the proposal, praised Chair Hill's work on the matter and said the OCC would be issuing a similar proposed rule in the near future. 

"I also support the proposal, and want to thank the chairman for his leadership on this issue, and to note that the OCC will be following in the footsteps of the FDIC here and has learned a lot from your comment process and will, in the not too distant future, be proposing our own rule," Gould said. "Reforming our appeals process again based largely on the lessons that you've learned and on the leadership steps you've taken here."