On January 22, 2026, the Federal Deposit Insurance Corporation ("FDIC") amended its Guidelines for Appeals of Material Supervisory Determinations ("Guidelines"), creating a new standalone Office of Supervisory Appeals ("Office"). The Office and the new Guidelines apply to insured depository institutions supervised by the FDIC, and do not apply to institutions primarily supervised by the Office of the Comptroller of the Currency or the Board of Governors of the Federal Reserve. There is no set date for when the Office will become active, but the FDIC will announce when it is operational.
Background
When the FDIC makes a material supervisory decision ("MSD"), such as producing a CAMELS rating or a matter requiring attention, a supervised institution can appeal that decision to a review panel within the FDIC.1 That appeals panel, the Supervision Appeals Review Committee ("SARC"), decided appeals and was the final level of review in the FDIC's supervisory appeals process. In 2021, the FDIC aimed to replace the SARC with a new office, comprised of different members and granting supervised institutions increased flexibility to appeal certain MSDs, but never finalized the change. In July 2025, the FDIC reproposed the current Guidelines, which were approved and adopted in January 2026.3 According to FDIC Chairman Travis Hill, the Guidelines will "promote an independent, apolitical, and consistent appeals process," and are another shift in the FDIC's regulatory approach following Hill's appointment.4
The Guidelines create a new independent Office, and apply to insured depository institutions for which the FDIC is the primary federal regulator (i.e., insured state nonmember banks, insured branches of foreign banks, and state savings associations), and to other insured depository institutions for which the FDIC makes material supervisory determinations.5 The Guidelines do not apply to financial institutions that are not primarily supervised by the FDIC (i.e., national banks, federal savings associations, uninsured federal branches and federal agencies of foreign banks, state member banks, bank holding companies, savings and loan holding companies, uninsured state branches, and state agencies of foreign banks).
Key Changes to the Amended Guidelines
The Guidelines change the structure and independence of the Office, provide more flexibility for supervised institutions to appeal MSDs, and maintain the timeline for a final decision from the Office.
- Revised Structure: Each appeal will be decided by three reviewing officials.6 One official must have past industry experience, generally defined as "having worked at a bank or for a company that provides services to banks or banking-related services," and one person must have past bank examination or supervisory experience.7 In contrast, the SARC was staffed by FDIC Board members and other senior FDIC officials. A short biography of each official will be posted to the FDIC's website.
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Broader Range of Appealable MSDs: The Guidelines allow supervised institutions to appeal, with some exceptions, a broad range of supervisory determinations that may affect the "capital, earnings, operating flexibility, or capital category for prompt corrective action purposes of an institution, or that otherwise affects the nature and level of supervisory oversight accorded an institution."8 These include matters requiring board attention and matters requiring attention, as well as decisions to initiate informal enforcement actions and determinations regarding an institution's level of compliance with an informal enforcement action.9
Formal enforcement actions, decisions to take prompt corrective action, and facts and circumstances underlying pending or proposed formal enforcement actions for which the institution has been provided written notice that the action is based on: (1) unsafe or unsound practices for purposes of section 8 of the Federal Deposit Insurance Act ("FDI Act"); or (2) violations of laws or regulations relating to the institution's anti-money laundering and countering the financing of terrorism program or the institution's sanctions compliance, are not appealable. However, facts and circumstances underlying a proposed formal enforcement action that are not based on, in whole or in part, those practices or violations can be appealed.10
The appeals process may affect the timing of an enforcement action, with the possibility that an action may be delayed until the conclusion of the appeal.11 But, there may be circumstances where the FDIC will pursue a simultaneous enforcement action.
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Independent and Standalone Review: When deciding appeals, the panel will make its "own supervisory determination without deferring to the judgments of either party."12 "Each panel's review will be limited to the facts and circumstances as they existed prior to, or at the time the material supervisory determination was made, even if later discovered, and no consideration is given to any facts or circumstances that occur or corrective action taken after the determination was made."13
This emphasis on independence could introduce a departure from past FDIC trends concerning appeals of supervisory decisions. According to our analysis of public data from the FDIC, since 2009 the SARC has fully reversed an FDIC supervisory decision only three times, despite hearing 29 appeals across that same time span.14 As was done by the SARC, the decisions of the Office will be made publicly available.15
- Clear Timeline: Within 60 days of receiving a MSD, a supervised institution can file a request for review with the appropriate Director. The appropriate Director then has 45 days to review the institution's appeal or refer the appeal to the Office. If the appropriate Director issues a judgment, the supervised institution then has 30 days to file an appeal with the Office. No appeal will be allowed to the Office unless a supervised institution first filed a request for review with the appropriate Director. Within 90 days of receiving the notice of appeal or the Director's referral, a reviewing panel will consider the appeal, and will notify the parties of its decision within 45 days of that meeting.16 Either the FDIC staff or the supervised institution can request oral presentation, and, if there is an oral presentation, both the supervised institution and the FDIC will be allowed to present their positions and respond to questions from the panel.17
- Prohibition on Examiner Retaliation: The Guidelines prohibit any retaliation from any agency examiner or FDIC personnel based on an appeal of a MSD. Supervised institutions can contact the FDIC Ombudsman if they believe they have been subject to retaliation.18
Also worth noting is that, within the publication to the Federal Register, the FDIC stated that it expects to issue a final rule in the coming months that defines the term "unsafe or unsound practice'' for purposes of section 8 of the FDI Act.19
1 See 12 U.S.C. 4806(a). 12 U.S.C. 4806(a) required the FDIC to establish an "independent intra-agency appellate process'' to review material supervisory determinations. The statute defines the term "independent appellate process'' to mean "a review by an agency official who does not directly or indirectly report to the agency official who made the material supervisory determination under review.'' 12 U.S.C. 4806(f)(2). In the appeals process, the FDIC is required to ensure that (1) an insured depository institution's appeal of a material supervisory determination is heard and decided expeditiously; and (2) appropriate safeguards exist for protecting appellants from retaliation by agency examiners. 12 U.S.C. 4806(b).
2 Amendments to Guidelines for Appeals of Material Supervisory Determinations, May 17, 2022, available at https://www.fdic.gov/news/financial-institution-letters/2022/fil22022.html
3 Guidelines for Appeals of Material Supervisory Determinations, 90 Fed. Reg. 3184 (Jan. 22, 2026), available at https://www.fdic.gov/board/federal-register-notice-office-supervisory-appeals.pdf. See also Amendments to FDIC Guidelines for Appeals of Material Supervisory Determinations, January 22, 2026, available at https://www.fdic.gov/news/financial-institution-letters/2026/amendments-fdic-guidelines-appeals-material-supervisory#.
4 Statement by Chairman Travis Hill Guidelines to Establish the Office of Supervisory Appeals, January 22, 2026, available at https://www.fdic.gov/news/speeches/2026/statement-chairman-travis-hill-guidelines-establish-office-supervisory-appeals. This is one of many recent changes at the FDIC, as Chairman Hill institutes a new regulatory and supervisory approach consistent with the current administration. For example, the FDIC recently signaled that it is reducing its reliance on supervisory guidance concerning leveraged lending. See Comptroller of the Currency and FDIC withdraw from Interagency Leveraged Lending Guidance December 18, 2025, available at https://www.whitecase.com/insight-alert/comptroller-currency-and-fdic-withdraw-interagency-leveraged-lending-guidance.
5 The Office of the Comptroller of the Currency ("OCC") plans to release similar regulations to those adopted by the FDIC in the future. See FDIC adds banker to regulatory appeals board in final rule, available at https://www.americanbanker.com/news/fdic-adds-banker-to-regulatory-appeals-board-in-final-rule. The OCC and the Board of Governors of the Federal Reserve System have internal supervisory appeals processes similar to the SARC, as the Riegle Community Development and Regulatory Improvement Act of 1994 required all three agencies to develop intra-agency processes to review appeals of MSDs. 12 U.S.C. 4806(a).
6 Guidelines for Appeals of Material Supervisory Determinations, 90 Fed. Reg. 3184 (Jan. 22, 2026), at 3191.
7 Id. at 3191.
8 Id. at 3191-92. The list of appealable MSDs includes:
(1) Material supervisory determinations including:
(a) CAMELS ratings under the Uniform Financial Institutions Rating System;
(b) IT ratings under the Uniform Rating System for Information Technology;
(c) Trust ratings under the Uniform Interagency Trust Rating System;
(d) CRA ratings under the Revised Uniform Interagency Community Reinvestment Act Assessment Rating System;
(e) Consumer compliance ratings under the Uniform Interagency Consumer Compliance Rating System;
(f) Registered transfer agent examination ratings;
(g) Government securities dealer examination ratings;
(h) Municipal securities dealer examination ratings;
(i) Determinations relating to the appropriateness of loan loss reserve provisions;
(j) Classifications of loans and other assets in dispute the amount of which, individually or in the aggregate, exceeds 10 percent of an institution's total capital;
(k) Determinations relating to violations of a statute or regulation, including the severity of a violation, that may affect the capital, earnings, or operating flexibility of an institution, or otherwise affect the nature and level of supervisory oversight accorded an institution;
(l) Truth in Lending Act (Regulation Z) restitution;
(m) Filings made pursuant to 12 CFR 303.11(f), for which a request for reconsideration has been granted, other than denials of a change in bank control, change in senior executive officer or board of directors, or denial of an application pursuant to section 19 of the FDI Act, 12 U.S.C. 1829 (which are contained in 12 CFR part 308, subparts D, L, and M, respectively), if the filing was originally denied by the Director, Deputy Director, or Associate Director of the Division of Depositor and Consumer Protection, the Division of Risk Management Supervision, or the Division of Complex Institution Supervision and Resolution;
(n) Decisions to initiate informal enforcement actions (such as memoranda of understanding) and determinations regarding an institution's level of compliance with an informal enforcement action;
(o) Determinations regarding the institution's level of compliance with a formal enforcement action; however, if the FDIC determines that the lack of compliance with an existing formal enforcement action requires an additional formal enforcement action, the proposed new enforcement action is not appealable;
(p) Matters requiring board attention or matters requiring attention;
(q) Determinations regarding an institution's compliance with conditions imposed through the supervision or application processes; and
(r) Any other supervisory determination (unless otherwise not eligible for appeal) that may affect the capital, earnings, operating flexibility, or capital category for prompt corrective action purposes of an institution, or that otherwise affects the nature and level of supervisory oversight accorded an institution.
9 Id. at 3191-92.
10 Id. at 3192.
11 Id. at 3188. The FDIC also encourages supervised institutions to first make a good faith effort to resolve any dispute through communicating with the on-site examiner and/or the appropriate Regional Office. Id. at 3192.
12 Id. at 3193.
13 Id. at 3193.
14 FDIC Supervision Appeals Review Committee Decisions, available at https://www.fdic.gov/laws-and-regulations/supervision-appeals-review-committee-decisions.
15 Guidelines for Appeals of Material Supervisory Determinations, 90 Fed. Reg. 3184 (Jan. 22, 2026), at 3194. As before when the SARC published decisions, the Office will redact identifying information and allow the parties to review the publications prior to their release to determine if there are any issues with the redactions. Id. The FDIC will publish annual reports on the Office's decisions with respect to institutions' requests for review of MSDs. Id.
16 Id. at 3192-93.
17 Id. at 3193.
18 Id. at 3194-95.
19 Id. at 3188.
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