FDIC Launches Office Of Supervisory Appeals

The FDIC has announced the panel for its new Office of Supervisory Appeals. The panel is comprised of independent officials who will consider and resolve appeals of material supervisory determinations brought before the agency.

The office is a standalone office inside the FDIC and replaces the Supervision Appeals Review Committee (SARC) as the last level of review of material supervisory determinations. Decisions of the SARC have now been superceded.

The agency announced the formation of the new office in January. It now has become fully operational.

In 2020, the FDIC proposed replacing the SARC with an independent, standalone office staffed with officials whose only job would be reviewing and deciding on supervisory appeals. The office became fully operational, but following a leadership change at the agency, it was disbanded before hearing a single appeal.

The plan has been resurrected.

“The Office is independent of the Divisions that make supervisory determinations,” the FDIC said. “An institution may appeal a material supervisory determination to the Office after the appropriate Division Director’s review of the material supervisory determination.”

According to the agency, “The Office will make independent supervisory determinations without deferring to the judgments of either party, subject to the reasonableness of and the support for the positions advanced. In addition, institutions’ appeal rights are now expanded to permit appeals in certain cases when an enforcement action is proposed or pending.”

The office must be staffed by reviewing officials who have experience with the supervisory process.

As part of the OSA’s launch, the FDIC announced the appointment of the three individuals who have that experience and who will serve as reviewing officials:

• Tim Ayala has served as a banking executive and FDIC senior leader with experience covering bank supervision, governance, compliance, and regulatory strategy. Most recently, Ayala served as Executive Vice President and Chief Risk Officer with Pinnacle Financial Partners, a $54 billion financial institution based in Nashville, Tennessee. At the FDIC, Ayala was a commissioned bank examiner in risk management, serving in senior leadership positions in Washington, DC and in four regions, including Assistant Regional Director and Examiner-in-Charge of a large financial institution.
• John Conneely is a former FDIC senior executive with 35 years of experience in bank supervision and regulation. He became a commissioned bank examiner in New York City in 1989 and subsequently held a variety of senior leadership positions within the agency’s Division of Complex Institutions Supervision & Resolution, including serving as Division Director. Conneely also served as FDIC’s Chicago Regional Director and Deputy Regional Director in the New York Region. In addition, he was also a Banking Policy Advisor in the U.S. Department of the Treasury’s Office of International Banking and Securities Markets.
• Duke Sheow brings more than three decades of experience in financial institution supervision, enterprise risk management, and banking regulation across the public and private sectors. Most recently, he served as Senior Managing Director at PwC, and he previously held executive positions with several banks. Sheow also served as a senior commissioned examiner with the FDIC and the Federal Reserve Bank of San Francisco and was a key member in the development of the Federal Reserve’s Fintech Supervisory Program.