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On September 16, 2025, Pryor Cashman Partner Pinchus D. Raice, Co-Chair of the Financial Institutions Practice, and Counsel Dustin N. Nofziger, a member of the Financial Institutions Practice, submitted comments to the Federal Deposit Insurance Corporation (FDIC) in response to the agency's July 18, 2025, notice of proposed Guidelines for Appeals of Material Supervisory Determinations (RIN 3064-ZA50).
The comments were informed by the authors' substantial experience with the appeals processes of the FDIC and other prudential banking regulators. The comments raised concerns about the independence, transparency, and fairness of the proposed guidelines and offered specific recommendations to enhance the intra-agency appeals process.
The comments recommended the following:
- Panel Composition: In addition to requiring supervisory experience on appeals panels, the FDIC should include at least one member with experience as a banker or industry professional to ensure balanced decision-making.
- Maintaining Independence: The FDIC Legal Division should not have authority to revise the Office of Supervisory Appeals' decisions or decide procedural matters, as this would undermine the new Office's independence.
- Transparency of Withheld Materials: If materials are withheld due to privilege or legal limitations, the appealing institution should receive a privilege log to ensure procedural fairness and the ability to contest improper withholding.
- Preventing Indefinite Delays: The FDIC should not be allowed to indefinitely delay appeal rights while merely seeking authority to pursue an enforcement action. Institutions should be allowed to appeal after 120 or 90 days if no formal enforcement action is initiated.
- Clarifying Appealable Matters: The FDIC should not block appeals based on the possibility of a future enforcement action. The agency's definition of "formal enforcement-related actions and decisions" should align with that of the Federal Reserve, which does not preclude appeals on this basis.
The comments also expressed support for the enactment of the FAIR EXAMS Act, which would create a more independent and legally robust alternative to the FDIC's intra-agency appeals framework. In the interim, Pryor Cashman urged the FDIC to strengthen the current intra-agency appeals process consistent with the requirements of the Riegle Community Development and Regulatory Improvement Act of 1994.
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