On July 29, 2016, the US FDIC requested comments on updates to its guidelines for institutions to appeal certain material supervisory determinations, as well as comments on draft guidance regarding third-party lending. The two items are part of a package issued by the FDIC to improve the transparency and clarity of the FDIC’s supervisory policies and practices, and to ensure that institutions have clear and fair avenues to pursue when there are differences of opinion regarding supervisory matters.
The FDIC proposed to amend its Guidelines for Appeals of Material Supervisory Determinations so that institutions have additional avenues of redress for these determinations and for greater consistency with the appeals process of the other federal banking agencies. The proposed supervision appeals guidelines expand the circumstances under which banks may appeal a material supervisory determination. Comments on the supervision appeals guidelines will be accepted until 60 days after they are published in the Federal Register.
Other related documents in the FDIC’s package of updated policies and procedures include a statement to guide FDIC staff in developing and reviewing supervisory guidance and a statement on the development and communication of supervisory recommendations to financial institutions. Further, the FDIC is reissuing a Financial Institution Letter originally issued in 2011 to reinforce the FDIC’s expectations for communications between the agency and bankers and to encourage bankers to raise concerns and provide feedback related to FDIC supervisory matters.
The FDIC also issued examination guidance specifically with respect to third-party lending. The draft guidance supplements the FDIC’s Guidance for Managing Third-Party Risk and applies to any third-party arrangements of an institution, including lending. This guidance expands upon the FDIC’s existing guidance by setting forth safety and soundness and consumer compliance measures FDIC-supervised institutions should follow when lending through a business relationship with a third party. Furthermore, it outlines the risks that may be associated with third-party lending as well as the expectations for a riskmanagement program, supervisory considerations and examination procedures related to third-party lending. On August 4, 2016, the FDIC extended the comment period for the proposed guidance on third-party lending to October 27, 2016.
The FDIC press release, which includes links to the proposed guidance and related statements described above, is available at: https://www.fdic.gov/news/news/press/2016/pr16061.html.