On October 17, 2017, Pryor Cashman requested leave from an Illinois federal court to file an unopposed motion on behalf of the New York League of Independent Bankers ("NYLIB") to bring supplemental authority supporting NYLIB's September 2017 amicus brief to the court's attention. 

The case, Builders Bank v. FDIC, involves a novel question of law – whether the federal financial regulatory agencies' so-called "CAMELS" ratings, which assess financial institutions' capital adequacy, asset quality, management, earnings, liquidity, and sensitivity to market risk, are reviewable by the federal courts under the Administrative Procedure Act ("APA"). The FDIC's position, expressed in its July 2017 comments to its intra-agency appeals guidelines, is that its decisions on CAMELS ratings are "not appealable" to the federal courts under the APA – even if a financial institution has unsuccessfully appealed its component or composite CAMELS ratings through the FDIC's intra-agency appeals process.

NYLIB's motion to supplement points out that a sister agency, the National Credit Union Administration (the "NCUA"), has put forth an entirely contradictory view of the appealability of CAMELS ratings (or, in the NCUA's case, "CAMEL" ratings) to the federal courts. In a May 2017 intra-agency appeal decision, the NCUA Board acknowledged that "[t]he Board's decision [upholding component and composite CAMEL ratings of "3" after an intra-agency appeal] constitutes a final agency determination, which is reviewable [by the federal courts] in accordance with the provisions of [the Administrative Procedure Act].").

Pinchus D. Raice, Co-Chair of Pryor Cashman's Financial Institutions Group, explains:

While neither the FDIC's nor the NCUA's interpretations of the APA are entitled to judicial deference, the NCUA's view that CAMELS ratings are appealable under the APA lends credence to NYLIB's arguments in its amicus brief that CAMELS ratings are subject to judicial review in appropriate circumstances.

In other words, the FDIC's contention that CAMELS ratings are never appealable to the federal courts, even after an unsuccessful intra-agency appeal, has been undermined by the acknowledgment of its sister agency that financial institutions can appeal CAMELS ratings to the federal courts following an intra-agency appeal.

The motion for leave was granted on October 24th.

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