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When bank examiners get it wrong: financial institution appeals of material supervisory determinations.

D. NCUA

The National Credit Union Administration supervises federally-chartered credit unions (276) as well as federally insured state-chartered credit unions. (277) Credit unions are distinct from the financial institutions previously discussed because they arc owned by their "members" (rather than investors), (278) have limited authority to engage in commercial lending, (279) and pay fewer taxes. (280) Credit unions are, on average, smaller than banks. (281) Notwithstanding these differences, the NCUA evaluates credit unions using the CAMEL rating system (282) and, like the other federal regulators, must provide an "independent intra-agency appellate process ... to review material supervisory determinations." (283) As of the end of 2012, the NCUA supervised 4272 federal credit unions and 2547 federally insured state-chartered credit unions. (284) It has 1191 full-time equivalent employees. (285)

1. NCUA Appeals Process

The NCUA adopted its process for reviewing MSDs in 1995 following the Congressional mandate. (286) Although the NCUA has made minor changes to the scope of appealable matters, the structure of its appeals process has remained largely unchanged. (287)

Like other regulators, the NCUA prefers to address credit unions' complaints informally. (288) However, when such avenues prove ineffective, the NCUA's MSD appeals process is open to both federally-chartered credit unions and federally insured state-chartered credit unions. (289) State-chartered credit unions can only appeal those determinations that were made by an NCUA examiner. (290) If a state examiner made the MSD at issue, the NCUA refers the appeal to the state for appropriate action. (291)

According to an NCUA policy statement, the first step in the appeals process is to "contact the regional office regarding the examiner's decision within 30 days of the examiner's final determination." (292) The policy statement is somewhat unclear about whether this mandatory step is simply a notification to the office that oversees the examiner or whether the notification is intended to be treated as an appeal to the examiner's supervisor. The policy statement provides that "the dispute will be handed [sic] by the Region and become appealable to the [Supervisory Review] Committee either 30 days after a regional determination or 60 days after the regional office has been contacted if it has not made a determination." (293) According to Joy K. Lee, the current chair of the Supervisory Review Committee, the regional directors routinely investigate credit union appeals and respond in writing during the 30-day period. (294)

In any event, if the credit union's "contact" with the regional office does not resolve the dispute, the next step in the appeals process is to submit an appeal in writing to the NCUA's Supervisory Review Committee. (295) The appeal must be authorized by the board of directors of the credit union and "must include the name of the appellant credit union, the determination or denial being appealed and the reasons for the appeal." (296) The policy statement encourages credit unions "to submit all information and supporting documentation relevant to the matter in dispute." (297) In practice, the material submitted varies widely--from a four-page letter to several binders of material. (298) The Committee may then "request additional information" from the credit union or the regional office. (299) The Committee often sends a letter detailing these additional required materials, but it is also common for the chair of the Committee to have a telephone discussion with the credit union to provide more guidance on potentially helpful documentation. (300) The Committee also reviews the material that was submitted to the Regional Director and the Regional Director's decision. (301)

The NCUA's Supervisory Review Committee is made up of three "members of the NCUA's senior staff as appointed by the NCUA Chairman." (302) No members of the Committee can directly oversee the examination function. (303) All Committee members serve a one-year term, but can be reappointed for additional terms. (304) Until recently, the NCUA treated the makeup of the Committee as a closely guarded secret. (305) However, facing calls for greater transparency in the wake of the financial crisis, the NCUA now publishes the names of Committee members on its website. (306) The Committee currently consists of a program officer, the Secretary to the NCUA Board, and the Special Assistant to the Executive Director. (307) A FOIA request for the names and titles of past members of the Committee reveals that it is common for the Committee to contain an attorney (308) as well as former credit union examiners. Most Committee members serve only one or two years. (309)

Perhaps the most novel part of the NCUA appeals process is the scope of appealable determinations. Under NCUA's policy statement, appealable MSDs include: "(1) composite CAMEL ratings of 3, 4, and 5 and all component ratings of those composite ratings; (2) adequacy of loan loss reserve provisions; and (3) loan classifications on loans that are significant as determined by the appealing credit union." (310) On the one hand, the NCUA's scope of appealable matters is narrow. Under the policy statement, credit unions can only appeal a component CAMEL rating if the overall composite CAMEL rating is a 3, 4, or 5. (311) So, for example, a credit union that received a 3 management rating could not appeal that rating if the credit union received a composite rating of 1 or 2. (312) On the other hand, in some respects the scope of appealable matters is quite broad. The Supervisory Review Committee can review loan classifications if the appealing credit union considers the classification significant. (313) Moreover, a credit union's right to appeal is not cut off if NCUA imposes formal or informal enforcement action on the credit union. (314) However, in those circumstances, the credit union must comply with the enforcement action while the appeal is pending (315) and a reversal of the MSD would not necessarily terminate the enforcement action. (316) Nevertheless, an enforcement action does not preclude review of an MSD by the Committee.

In deciding the appeal, the Committee has "free rein ... to talk to anybody" that would provide useful information, including the original examiner or other experts within the NCUA. (317) However, the Committee members have not, to date, visited an appealing credit union. (318) The appealing credit union is "entitled to a personal appearance before the Committee." (319) The credit union can choose whether to allow directors or executives to present their case or whether to employ attorneys. (320) In the last few years, the NCUA has made an effort to formalize this "appearance," making it a court-like process. (321) A court reporter transcribes the proceedings and the Committee goes "off the record and on the record." (322) The Committee also questions the credit union. (323) After the appearance, the Committee members meet to discuss the appeal and reach a decision. (324)

The NCUA policy statement does not specify what standard of review the Committee should use in evaluating appeals. Joy K. Lee, the current Chairman of the NCUA Supervisory Review Committee, explains the standard of review as follows:
   I view myself as a completely independent party. And so I look at
   it like it's a brand new thing. I just don't totally go with
   whatever the examiner said and I just don't, you know, completely
   just say, "Well, this is the examiner's deal, the regional
   director's determination, so I'm not going to open my eyes to the
   credit union." I don't. I really and truly look at this as an
   independent authority and I look at both sides of the coin, and try
   to understand, you know, the reasons why for both parties. (325)


Ms. Lee also noted that she has broad investigative power to talk with those at the credit union and within the NCUA. (326)

Once the Committee has reached a conclusion, it drafts and edits a written decision. (327) Under normal circumstances, the Committee will reach a decision on the appeal within 30 days of the time the credit union filed the appeal. (328) The Committee sends the written decision to the credit union as well as to the Regional Director that oversees the credit union. (329) The decisions are not routinely circulated further within the NCUA (330) or released (even in redacted or summary form) to the general public. (331)

If the appealing credit union is unhappy with the Supervisory Review Committee's decision, it can appeal to the NCUA Board. (332) The NCUA's policy statement on appeals does not further discuss the procedures the Board uses for these appeals. (333)

At the NCUA, the Inspector General is tasked with resolving allegations of suspected retaliation. (334) According to the policy statement, "[a]ny retaliation by NCUA staff against a credit union making any type of appeal will subject the employee to appropriate disciplinary or remedial action by the appropriate supervisor." (335) The NCUA recently added language about their non-retaliation policy to the cover sheet that accompanies all examination reports. (336)

2. NCUA Appeals

The NCUA does not publicly release appeals decisions in summary or redacted form. Moreover, for much of its history, the Supervisory Review Committee's recordkeeping was lacking. A 2012 report by the NCUA's Inspector General "determined the [Supervisory Review Committee] [kept] all of its records in hard-copy format in a cardboard box. During a change in [Committee] chairpersons in late 2011, the outgoing chairperson passed the cardboard box of files to the newly appointed chairperson." (337)

Nevertheless, in response to my FOIA requests, the NCUA provided redacted Supervisory Review Committee decisions. (338) I reviewed and categorized each of these decisions. The NCUA also provided a spreadsheet summarizing credit unions' written "contacts" (339) with NCUA Regional Offices concerning MSDs. (340) The spreadsheet shows the year each credit union contacted the Regional Office, whether the credit union was a federal or state-chartered credit union, the general subject matter of the contact, the Region's actions, and whether an appeal was filed with the Supervisory Review Committee. (341) Data in the spreadsheet begin in 2002. (342) This section reports information collected from these FOIA requests. (343) Because of the small number of Supervisory Review Committee decision (6 between 1995 and 2012), the bulk of this section reports NCUA contacts as characterized by the NCUA.

The FOIA information provided shows 140 total Regional Office contacts. As illustrated in Figure 11, the NCUA-provided data show an upward trend in the number of contacts per year. There are several possible explanations. First, information about early contacts may be incomplete. Although my FOIA request sought information on regional office contacts beginning on January 1, 1995, the information provided began in 2002. Information about earlier contacts may not have been kept, or, if it was kept, was subsequently destroyed. (344) Second, the financial crisis beginning in 2008 could have led to more appeals. (345) Third, the NCUA has recently undertaken an effort to publicize its process for appealing MSDs. (346) This may have increased credit unions' utilization of the appeals process.

Which credit unions initiated contacts? Of the 140 contacts, 126 (90%) were made by credit unions with a federal charter and only 14 (10%) were made by credit unions with a state charter. Although the disparity seems large, there are almost twice as many federal credit unions as there are state credit unions. (347) In addition, the NCUA does not annually conduct examinations at each state-chartered credit union; it examines only those credit unions with the most risk. (348) Finally, until recently, the NCUA did not release its examination ratings of state-chartered credit unions to the credit unions themselves. (349) Each of these factors explains why more federal credit unions than state credit unions contact regional offices regarding MSDs.

Figure 12 summarizes issues raised by at least 2 Regional Office contacts. As with the OCC, Federal Reserve, and FDIC, disagreement over CAMEL composite or component ratings was the most common reason that credit unions used the MSD appeals process. Additionally, 47 appeals involved a document of resolution, an enforcement tool used by examiners encouraging the credit union to agree with recommended remedial actions. (351) Because the NCUA provided this information in spreadsheet form, little else is know about the substance of these appeals. (352)

Five appeals handled by the Supervisory Review Committee concerned CAMEL composite or component ratings. (353) One appeal to the Supervisory Review Committee alleged that "agency field staff require[d] [the credit union] to submit additional monthly reporting information in retaliation for a complaint lodged by the credit union against a supervisory examiner." (354) It is possible that the Committee appeals contained additional issues, but the decisions have been redacted so heavily it is impossible to tell. (355)

When credit unions use the NCUA's MSD appeals process, they rarely succeed in overturning the initial examination determination. As illustrated in Figure 13, the overall success was 18% (26/142). Seventy percent (98/140) of Regional Office contacts upheld the examiner decision. (357) Less than 20% (25/140) of Region Office contacts amended the examiner decision. In spite of the low rate of credit union success at the Regional Office contact level, there are few appeals filed with the NCUA's Supervisory Review Committee. The Committee issued only 6 decisions between 1995 and 2012. Five of those Committee decisions upheld the examiner decisions. In the single successful Supervisory Review Committee appeal, a credit union challenged the Office of Small Credit Union Initiative's decision to deny a $5,000 grant reimbursement. Only 1 MSD appeal has been filed with the NCUA Board, and it was withdrawn before the Board issued a decision. (358)

III. WEAKNESSES IN THE APPEALS PROCESSES

Analysis of the MSD appeals processes shows significant weaknesses. This section will address three weaknesses in more detail: (1) the lack of consistency among regulators, (2) the small number of appeals, and (3) the lack of transparency regarding appeals.

A. Variations Among Regulators

First, there are significant differences among the MSD appeals processes used by each regulator. This is true even though regulators, at the urging of Congress, generally strive for consistency in the examination process. (359) Any time four separate regulators implement a single statute, differences are likely to arise. While policies should be tailored to meet the unique structure of the agency and the nature of the regulated institutions, policies should not advantage or disadvantage financial institutions based solely on the institutions' primary federal regulator. Regulatory decisions regarding the scope of appealable items and the standard of review used when evaluating an appeal have the potential to significantly alter the substantive rights of financial institutions. Such differences are inconsistent with Congressional and regulatory policies promoting uniformity.

1. Scope of Appealable Matters

Congress required that regulators provide a process for appealing "material supervisory determinations." Regulators disagree as to what this means. This section focuses on area of divergence: (1) differences in the appealability of examination ratings and (2) differences in the appealability of MSDs related to enforcement actions. In both of these cases, differences in the scope of appealable matters mean that some financial institutions have greater access to an appeals process than others.

a. CAMELS Ratings

Congress defined MSD to include "examination ratings." (360) The OCC, Federal Reserve, and FDIC allow financial institutions to appeal any examination rating. (361) The NCUA, however, only allows appeals of "composite CAMEL ratings of 3, 4, and 5 and all component ratings of those composite ratings." (362) That means a credit union with a composite CAMEL rating of 2 and a management rating of 3 or 4 cannot appeal either the composite rating or the management rating. (363) Yet such appeals have been heard by both the OCC and FDIC. (364) Credit unions, thus, have less access to an appeals process.

b. Enforcement-Related Determinations

The handling of MSDs related to enforcement actions is even more fractured. Congress specified that MSDs do not include regulators' decisions to close financial institutions or take prompt corrective action, including the removal of officers and directors, from undercapitalized institutions. (365) Congress added that the MSD appeals process does not "affect the authority of an appropriate Federal banking agency or the National Credit Union Administration Board to take enforcement or supervisory action." (366) While this seems to preclude using the MSD appeals processes to directly challenge prompt corrective action directives, it gives regulators leeway in dealing with determinations related to formal or informal enforcement actions.

OCC-regulated banks can use the MSD appeals process to challenge findings that a bank has not complied with an enforcement action. (367) In addition, an OCC-regulated bank can challenge CAMELS ratings and other MSDs while under an enforcement action, (368) but cannot challenge "the underlying facts that form the basis of a recommended or pending formal enforcement action and the acts or practices that are the subject of a pending formal enforcement action." (369)

The Federal Reserve policy states that its MSD appeals process cannot be used to appeal "prompt corrective action directives ... actions to impose administrative enforcement actions ..., capital directives, and orders issued pursuant to applications under the [Bank Holding Company] Act." (370) However, in one instance the Federal Reserve heard an appeal about whether a memorandum of understanding should remain in effect and in another instance evaluated the accuracy of an examination finding that a bank had not complied with an enforcement action.

The FDIC's policy is the most restrictive. It explicitly prohibits appeals of formal enforcement actions as well as "determinations and the underlying facts and circumstances that form the basis of a recommendation or pending formal enforcement action" and "determinations regarding compliance with an existing formal enforcement action." (371) Furthermore, FDIC does not allow appeals of "[d]ecisions to initiate informal enforcement actions (such as memoranda of understanding)." (372)

The NCUA's MSD appeals policy states that it is not available for "appeals of various administrative and enforcement actions." (373) Joy K. Lee, Chair of the NCUA's Supervisory Review Committee, explains that an enforcement action does not cut off a credit union's right to use the MSD appeals process; credit unions can still challenge facts that relate to the enforcement action. (374)

In sum, regulators reach different conclusions about whether financial institutions can appeal the facts and determinations underlying enforcement actions and about whether institutions can appeal a determination that the institution is not in compliance with an enforcement action.

2. Standard of Review

There is also disagreement and general confusion among regulators about the standard of review for evaluating MSD appeals. "Standard of review" refers to the level of deference the appellate authority affords the earlier decision maker. (375) Possible standards of review range from the deferential "abuse of discretion" standard to the non-deferential "de novo" standard. (376) Because changing the standard of review adjusts deference given to the earlier determination, the Supreme Court has acknowledged that the standard of review used could make a practical difference in the outcome of a case. (377) Thus, financial institutions that are allowed to appeal using a non-deferential standard of review could have a much better chance of success than those appealing under a more deferential standard. The Riegle Community Development and Regulatory Improvement Act of 1994 does not specify a standard of review for the appeals processes. (378) Without direction, regulators have adopted widely differing standards.

The OCC policy states that "the appeal is limited to a consideration of whether the examiners appropriately applied agency policies and standards." (379) The current OCC Ombudsman says this approach is a "standard-based" review that does not give "deference to either side." (380) The inaugural OCC Ombudsman described the standard of review as de novo. (381)

The Federal Reserve, while stating that it wanted all institutions to receive "the same appellant rights regardless of the Federal Reserve district in which they reside," did not adopt an agencywide standard of review. (382) Left to their own judgment, regional Federal Reserve Banks provide a potpourri of standards of review from de novo in New York, to ad hoc (but probably not de novo) standards in Kansas City, to "findings and conclusions were based on sufficient evidence and were consistent with FRS policy" in Minneapolis, to no stated standard in other regions. (383)

The FDIC "review[s] the appeal for consistency with the policies, practices, and mission of the FDIC and the overall reasonableness of, and the support offered for, the positions advanced." (384)

Neither the NCUA MSD appeals policy nor the appeals decisions themselves provide a statement on the appropriate standard of review. Joy K. Lee, Chair of the NCUA's Supervisory Review Committee, describes a review process that does not give deference to either credit union or the examiner. (385)

B. Few Appeals

Another shortcoming of the current MSD appeals processes is that there are few appeals. Thousands of financial institutions have been examined every year since regulators adopted MSD appeals policies in 1995. Yet the OCC Ombudsman has issued 157 decisions, the Federal Reserve has decided 25 appeals (although data from 1995-2000 are unavailable for the Federal Reserve), the FDIC's Supervision Appeals Review Committee has issued 63 decisions, and the NCUA's Supervisory Review Committee has issued six decisions. (386) One regulator has touted the small number of appeals as evidence that institutions are happy with the examination process and that examiners make few mistakes. (387) There is, however, reason to believe this view is overly optimistic.

Surveys suggest that financial institutions would like to appeal MSDs far more often than they actually do. In 2011, the Alliance of Bankers Associations, in connection with the American Bankers Association, conducted a nation-wide survey questioning banks about their most recent examination. The survey, which received more than 1000 responses, asked banks to rate satisfaction with the most recent examination and results on a 1 to 5 scale with 1 being very satisfied and 5 being very unsatisfied. More than 30% of responding banks were unsatisfied or very unsatisfied. (388)

Respondents were also asked to evaluate agreement with the assigned CAMELS rating on the same 1 to 5 scale. That question yielded an average response of 3.38, (389) evidencing some disagreement with examination ratings.

Moreover, surveys of credit unions produced similar results. In 2010, the Credit Union National Association conducted a survey in which "27% of respondents reported dissatisfaction with their most recent exam." (390) Moreover, "one-in-five (21%) [of the responding credit unions] indicated that they wanted to appeal but did not." (391) "Two-thirds of the credit unions that wanted to appeal indicated they did not appeal for fear of retaliation by examination staff. Nearly the same number indicated they did not appeal because they did not believe it would make a difference in outcome." (392)

The Credit Union National Association performed a second survey about the examination process in 2012. While it did not specifically ask about the MSD appeals process, it did ask about credit unions' agreement with examination results. The survey found that 25% of respondents were unhappy with their most recent examination and results. (393) In addition, 22% of respondents expressed dissatisfaction with their current CAMEL rating. (394)

These surveys are not without their faults. (395) Each of the surveys relied on financial institutions voluntarily completing the survey form. Those dissatisfied with the examination process may have been more motivated to complete the survey. Thus, it may not be possible to extrapolate the survey results to the entire population of financial institutions. Nevertheless, the number of survey respondents that reported dissatisfaction with their examination is far greater than the number of financial institutions that utilized the MSD appeals processes. Thus, while it might not be possible to predict the ideal number of appeals, the survey data suggest the appeal processes are not functioning properly. Some financial institutions believe that appealing is futile. Others fear retaliation.

C. Little Transparency

Finally, the MSD appeals processes are far from transparent. It can be difficult or even impossible to get information about appeals decisions. Without transparency it is difficult to realize the objectives Congress sought in mandating MSD appeals processes: correcting "uneven treatment by examiners" and fostering "confidence" in the regulatory process. (396)

Written and regularly disseminated decisions serve several functions. First, they can be a learning tool for regulators themselves. If decisions are public, all regulators can review the decisions and compare them with their current examination practices. How can regulators be expected to achieve any measure of consistency (either within an agency or across agencies) if one regulator has no idea what other regulators are doing? (397) Second, written decisions act as guideposts for financial institutions. Institutions are better able to comply with regulator expectations when they understand what the regulators expect. Third, written decisions give the public a way to evaluate the MSD appeals processes and the examination function overall. As President Obama explains, "[t]ransparency promotes accountability and provides information for citizens about what their Government is doing." (398)

Of course, the OCC and FDIC deserve credit for releasing some appeals decisions. The OCC provides summaries of Ombudsman decisions, and the FDIC provides redacted Supervision Appeals Review Committee decisions. (399) In both cases, the materials released generally allow readers to determine (1) the reason the appealing bank believes examiners erred, (2) the applicable law, regulation, or agency guidance, and (3) the appellate authority's decision and accompanying reasoning. The Federal Reserve and NCUA are not as forthcoming. Even in response to FOIA requests, the Federal Reserve has never released its opinions. (400) Although the NCUA did release decisions from its Supervisory Review Committee, (401) in many cases the opinions were so heavily redacted it was difficult to determine the precise nature of the controversy, the applicable law (or agency guidance), and the factors influencing the Committee decision. (402)

MSD appeals that result in written decisions by the OCC's Ombudsman, the FDIC's Supervision Appeals Review Committee, and the NCUA's Supervisory Review Committee capture only part of the financial institutions that use the appeals processes. In each of those cases the institution has either the option or the requirement to first pursue an appeal with an agency official who supervised the examination. (403) The decisions reached at these earlier stages of the MSD appeals processes are a near complete black box. No regulator has released any written decision from this stage of the process. Furthermore, no regulator systematically provides summary information about appeals handled at this stage. Do financial institutions appeal? What do they appeal? Do they ever win? What do these decisions teach us about regulatory reasoning? Are these decisions consistent with one another? While I did my best to unravel the answers to these questions through FOIA requests and regulator interviews, much of this stage of the appeals processes remains a mystery.

Secrecy at this early stage of the MSD appeals processes may be especially problematic. These appeals are not addressed by a single appellate authority within each regulator but are instead handled by a variety of decision-makers. One division, region, or office may decide appeals differently than another division, region, or office. Moreover, because this level of appeal is addressed to an agency official more closely associated with the examination staff, this may be the stage at which the appeal is most likely to induce examiner retaliation.

In sum, the lack of transparency stands as a barrier to consistency and confidence in the examination process.

IV. STRENGTHENING THE APPEALS PROCESSES

Given the weaknesses in the current MSD appeals processes, I recommend three changes. First, once examiners issue an MSD, financial institutions should have direct access to an appellate authority outside of the examination function. Second, the appellate authority should engage in a robust review. The review should consider a broad scope of appealable matters and employ a clear and rigorous standard of review. The scope of review and standard of review should be consistent across regulators. Third, regulators should release detailed information about each decision reached by the appellate authority. This Part will discuss these recommendations in more detail, but one of the virtues of these suggestions is that they could all be implemented voluntarily by the regulators. Congressional action would not be required. (404) This Part will also address a more drastic proposal that would require Congressional action: the creation of a single super-Ombudsman for all financial institution MSD appeals.

A. Strengthened Independence of Review

Once examiners issue an MSD, financial institutions should have direct access to a dedicated appellate authority outside of the examination function. The OCC is currently the only regulator to provide this access; OCC-regulated banks can appeal directly to the Ombudsman. (405) FDIC-regulated banks and credit unions first address an appeal to an official who oversees the examination function. (406) Federal Reserve-regulated institutions first address an appeal to an ad hoc committee that changes with each appeal. (407) I propose that FDIC-regulated banks be allowed to appeal directly to the Supervision Appeals Review Committee and credit unions be allowed to appeal directly to the Supervisory Review Committee. I also propose that the Federal Reserve create an appellate authority to review MSDs. The appellate authority should consist of a person or group of persons who are not part of the examination function. Moreover, membership of the appellate authority should be consistent and not change with each appeal.

The benefits of direct access to a dedicated appellate authority outside the examination function are threefold. First, consistent decisions are more likely to come from a single appellate authority (whether consisting of an individual or a small group) than from a number of different individuals who do not deliberate together (as is the case when appeals are first routed through division, region, or office directors).

Second, a single appellate authority promotes transparency. Regulators do not regularly release any information about early-stage appeals that are routed to a division, region, or office director. Perhaps this is partly because these officials are so connected with the examination function that they presume complete secrecy is preferable. Allowing appeals to instead begin with a dedicated appellate authority outside the examination function may facilitate public release of summary or redacted opinions. A dedicated appellate authority outside the examination function may be better able to balance protection of information that could lead to banking runs with disclosure of information that could improve the examination function. Indeed, the OCC Ombudsman and FDIC Supervision Appeals Review Committee (appellate authorities outside the examination function) already strike a reasonable balance when they release their decisions. (408)

Third, a more independent appellate authority may increase bank confidence in the MSD appeals processes. Financial institutions that disagree with an MSD may view the regulator's examination function with suspicion. Assigning the first step of the examination function to examination officials does little to assuage this concern. Institutions would likely view a dedicated appellate authority outside the examination function as more independent, particularly if that authority publicly disclosed its decisions. The OCC gives its banks the choice of filing with the Ombudsman or the Deputy Comptroller of the supervisory district that oversees the bank. (409) Current Ombudsman Hattix estimates that about eighty percent start directly with the Comptroller. (410) This suggests most banks prefer the appellate authority outside the examination function.

B. Robust Review Authority

Next, regulators should empower their appellate authorities to conduct robust reviews of MSDs. Each appellate authority should consider a broad scope of appealable matters. Furthermore, in considering appeals, the appellate authority should employ a consistent and robust standard of review.

1. Broad Scope of Appealable Matters

Financial institutions should be able to use the MSD appeals processes to challenge a wide variety of MSDs. All regulators should define appealable MSDs to include any examination rating. In addition, institutions should be able to appeal some enforcement action-related MSDs.

a. Examination Ratings

The NCUA is the only regulator to restrict institutions' ability to appeal examination ratings. (411) The NCUA allows appeals of CAMEL ratings (composite and component) only when the composite rating is 3, 4, or 5. (412) The NCUA defends excluding credits unions with a 1 or 2 CAMEL composite rating by noting that these credit unions have little reason to appeal. (413) Yet banks have appealed CAMELS 2 ratings. (414) These banks may be worried that unless errors are corrected early, the misunderstanding will eventually lead to further ratings downgrades and enforcement actions. At any rate, even the NCUA would likely concede that allowing appeals from 1 and 2 rated credit unions is unlikely to flood the NCUA's seldom-used system. The NCUA should allow appeals on par with other financial institution regulators.

b. Enforcement-Related Determinations

There is little agreement among regulators about the extent to which institutions can use the MSD appeals processes to challenge determinations related to informal or formal enforcement actions. (415) The issue, however, is important. Regulators typically place institutions that receive a 3, 4, or 5 composite CAMELS rating under informal or formal enforcement action. (416) Although there are processes for contesting formal enforcement actions, (417) doing so is costly and actions are reviewed under standards deferential to the regulator. Thus, most banks do not challenge enforcement actions. (418) All informal enforcement actions (419) and the vast majority of formal enforcement actions are entered by consent. (420) In those circumstances, institutions have little opportunity to correct examiner mistakes. And by excluding enforcement-related determinations from the MSD appeals processes, regulators significantly restrict the usefulness of the processes. For this reason, Eugene A. Ludwig, a former Comptroller of the Currency, proposes that financial institutions be allowed to use the MSD appeals processes for issues related to enforcement actions. (421)

My proposal is more specific. I suggest that institutions be able to use the MSD appeals processes for any material finding or decision underlying an informal or formal enforcement action entered by consent. Institutions should also be able to use the MSD appeals processes to challenge findings that the institution has not complied with an existing enforcement action, unless the regulator is currently asking a court to enforce the existing enforcement action. In either case, the regulator would not be constrained in its ability to pursue an enforcement action and any enforcement action would remain in force during the pendency of the MSD appeal.

I further propose that if the appellate authority decides that one or more MSDs were erroneous, top regulatory officials (422) would consider whether the enforcement action should be withdrawn. If the regulator chooses not to lift the enforcement action, the institution should be given the option to withdraw its consent to the action. (423) The regulator could then pursue formal enforcement actions under existing statutory authority, including statutes that allow for temporary orders without pre-order hearings in high-risk cases. (424) In less urgent cases (such as when a regulator seeks a cease-and-desist order for an unsafe or unsound condition), the institution could contest the action through the hearing process.

In the past, regulators have resisted proposals to allow appeals of enforcement action-related MSDs, claiming that such appeals would dangerously delay the enforcement process. (425) My proposal, however, does not affect enforcement authority; it allows regulators the same essential tools they have now. It only provides a mechanism for institutions to ask regulators to reconsider underlying MSDs. In addition, both the OCC and FDIC have, at times, allowed review of MSDs related to enforcement actions. (426) There is no indication that institutions' use of the MSD appeals processes during the time these appeals were allowed hampered enforcement activity.

Regulators assert additional review of enforcement-related MSDs is unnecessary because agency officials already vet enforcement actions, minimizing the chances for regulatory error and overreach. (427) Regulators, however, tend to give the greatest scrutiny to those enforcement actions contested by financial institutions. Top agency officials rarely review or approve enforcement actions entered with an institution's consent. At the FDIC, enforcement action decisions are commonly made by a regional director or regional counsel. (428) The FDIC's Washington office only becomes involved if the bank requests a hearing. (429) The process is similar at the OCC (430) and Federal Reserve. (431) Because the vast majority of enforcement actions are entered by consent, the internal and opaque vetting processes provide little assurance of consistency.

Finally, regulators note that financial institutions facing enforcement actions already have access to other appeals mechanisms. (432) If an institution is unhappy with an MSD underlying an enforcement action, why not just contest the enforcement action itself? The answer is that contesting an enforcement action is a formal, expensive, and time-consuming process. The institution must hire an attorney to represent it in a formal hearing before an administrative law judge. (433) Following the recommendation decision by the administrative law judge, the regulator issues a "final decision and order based on the entire record of proceeding, which is subject to limited review by an appropriate court of appeals." (434) The entire process can take two to five years. (435) During those two to five years, the regulator continues to examine the bank, making additional material supervisory determinations and requesting or demanding additional changes. (436) In these circumstances, it seems reasonable to conclude that institutions would be most likely to contest egregious and costly errors. If an institution could comply with an enforcement action at a lower cost than challenging the enforcement action, that institution might rationally consent to an enforcement action, even if it believes the action is unwarranted. (437)

In contrast, the MSD appeals processes are informal, inexpensive, and speedy. Institutions can make their case directly to the appellate authority; they need not employ an attorney. (438) Even in complicated cases, the appeal is heard and decided within a year. (4390 The appealing institution avoids a drawn-out, contentious process with an agency with whom it hopes to preserve a working relationship. Thus, a financial institution might use the MSD appeals process even if it would not contest an enforcement action. There are at least two pieces of evidence to support this conclusion. First, some banks have brought enforcement-related appeals through the MSD appeals processes. (440) Second, in 2008, when the FDIC removed enforcement-related determinations from the list of appealable MSDs, hankers' comments uniformly protested the decision. (441)

In sum, if regulators adopted a broader scope of appealable MSDs, institutions would have more opportunity to correct examiner errors and we could be more confident that the MSD appeals processes provided consistent rights to all financial institutions.

2. Clear and Rigorous Standard of Review

Next, regulators should adopt a clear and rigorous standard of review for MSD appeals. As explained in Part III.A.2, there is inconsistency and confusion regarding the standard of review used by regulators in MSD appeals. Regulatory adoption of a uniform, clear, and rigorous standard of review could make the MSD appeals processes more useful in achieving consistency. I would select a de novo standard for both findings of fact and issues of law and policy.

At present, three regulators consider whether the MSD is consistent with regulator policies and standards. (442) This check is important; examiner decisions should be consistent with the law and previous regulatory pronouncements. However, it is not sufficient to ensure that examiner decisions are consistent. While some appeals may involve MSDs that are straightforward applications of law or written policy, (443) other appeals might present different issues.

Some appeals may involve questions of fact. For example, in rating a loan, one factor considered is the value of the collateral securing the loan. (444) The financial institution and the regulator may have differing conclusions about the value of that collateral. The examiner may have properly classified the loan according to policy, but nevertheless arrived at the wrong classification because the factual assessment of the value of the collateral was incorrect. Standards of review that refer only to law and policy are unhelpful in addressing such factual disputes.

A "consistent with agency policy" (445) standard is also problematic when existing law and written policy do not cover the issue raised by the financial institution. For example, with respect to capital adequacy, regulators have detailed regulations setting minimum levels, but regulators often require additional capital. (446) Exactly how regulators determine the amount of additional capital is not included in any public pronouncement and is rarely explained to financial institutions. (447) Indeed, financial institution regulators sometimes admit that some MSDs are not explicitly governed by statute, regulation, or even public guidance. (448) It is when examiners are exercising individual judgment that variations across examiners are most likely to occur.

So what happens when a financial institution appeals an issue that cannot be easily resolved by consulting governing law or written policies? At present, regulators might review the MSD de novo, (449) review it for "overall reasonableness," (450) review it under a standard adopted specifically for that appeal, (451) or perhaps not even review it at all. There would be value in simply unifying the standard across regulators so that each appealing financial institution has the same opportunity for review.

Choosing the appropriate level of deference is more difficult. Because judicial deference to administrative decisions is a bulwark of administrative law, some may be tempted to graft similar levels of deference onto the MSD appeals processes. A court reviewing an agency administrative law judge's decision would review questions of fact under a "substantial evidence" or "arbitrary and capricious standard." (452) A court reviewing questions of law or policy would apply Chevron, (453) Skidmore, (454) or Auer (455) deference. However, many justifications for judicial deference to agency determinations do not apply here.

First, courts defer to agencies because the Administrative Procedure Act, or some other relevant statute, has instructed that they defer. (456) Congress has determined that statutory gaps should be filled by administrative agencies rather than courts. (457) In contrast, Congress did not specify a standard of review for MSD appeals in either the Administrative Procedure Act (458) or in the Riegle Community Development and Regulatory Improvement Act. (459) Because both the MSD appeals process and the initial examiners are housed within the administrative agency, there is no reason to believe Congress preferred that the appellate authority defer to the agency officials who reached the initial MSD.

Next, it is sometimes argued that judicial deference to agencies is justified by the agencies' special expertise in the subject matter of the controversy. (460) With MSDs, however, the appellate authorities have expertise. Indeed, agency officials who hear MSD appeals generally have greater training and experience than the examiners who made the initial determination. (461)

Next, some note that judicial deference allows administrative agencies to create a single uniform interpretation of the law. If each court exercised its own judgment, different rules may apply in different jurisdictions. (462) With the MSD appeals process, deference has the opposite effect. The MSD process is an opportunity for a single appellate authority within each regulator to harmonize differing examiner decisions. (463) If the appellate authority instead defers to the original examiner decision, we could end up with many different but "reasonable" interpretations of banking law and policy.

Judicial deference "has also been justified on democratic grounds--namely that agencies are politically accountable and courts are not." (464) Again, this deference justification is not applicable because the MSD appeals process is housed within each financial institution regulator, rather than in a separate branch of government. The MSD appellate authority is at least as accountable as the examination staff. Indeed, the appellate authority is even more accountable due to the authorities' generally higher position with each agency. Lower-level agency employees should not be conclusively deciding questions of law and policy (including any controversy about the appropriate application of law and policy). (465) Thus, the appellate authority deciding MSD appeals, should conduct de novo review on questions of law or policy.

Finally, courts defer to agency findings of fact because the agency was in a better position to collect and evaluate the facts underlying the dispute. (466) In the MSD appeals processes, the appellate authority has broad access to the underlying facts. (467) The OCC Ombudsman has even visited financial institutions in order to resolve appeals. (468) Moreover, a de novo standard of review of facts is not unprecedented for appeals within an administrative agency. For example, if an applicant is denied a Social Security claim, the applicant can request a hearing before an administrative law judge who reviews the facts and law de novo in reaching a decision. (469) The administrative law judge does not defer to the agency officials who reached the initial eligibility determination. In MSD appeals, the appellate authorities are in much the same position as the administrative law judge. An initial agency decision has been made, often by a relatively low-level agency official. The appeals or hearing process offers the agency the opportunity to correct erroneous factual determinations as well as errors of law. (470)

Thus, justifications for judicial deference fall short when applied to the MSD appeals process. Moreover, if financial institutions view the MSD appeals process as nothing more than a rubber stamp for the examiners, few institutions will appeal. (471) Consequently, the MSD appeals processes should adopt a clear and robust standard of review.

Some may worry that de novo review, particularly when combined with direct access to an independent appellate authority, will encourage financial institutions to "sandbag" examination staff. Rather than raising relevant facts or concerns with examiners, financial institutions might remain silent and then overturn the MSD through the appeals process. This, however, seems unlikely for a variety of reasons. First, the MSD appeals process cannot be used to stall enforcement actions. Financial institutions must comply with examiner instructions while any appeal is pending. (472) Second, financial institutions are repeat regulatory players. It is not in their interest to antagonize regulators. (473) Third, the historic success rate for MSD appeals suggests it would be foolhardy for a financial institution to think that winning on appeal is a foregone conclusion. (474) Even if reforms strengthen the appeals process, financial institutions will face risks when using the process.

Some may also worry a robust standard of review will add to the costs of regulating financial institutions. Admittedly, it is difficult to predict what it would cost for appellate authorities to conduct a robust review. It is also difficult to predict to what extent the more robust review would lead to increased use of the MSD appeals processes. Given past utilization of the processes, I think it unlikely that additional costs would be astronomical. To the extent that a more complete review does increase regulatory costs, the cost may be justified by the improvement to the regulatory system. Finally, any increased costs will not fall directly on taxpayers. Financial regulators are funded by fees charged to financial institutions (475)--institutions that are generally in favor of strengthening the MSD appeals process. (476)

C. Public Disclosure of Appeal Decisions

Finally, and perhaps most obviously, each appellate authority should provide summary or redacted decisions. The information provided should include (1) the reason the appealing financial institution believes the examiner erred, (2) the applicable law, regulation, or agency guidance, and (3) the decision and accompanying reasoning.

Regulators' primary objection to releasing decisions appears to be that MSD appeals consider confidential information from bank examinations. (477) Regulators keep examination information confidential, believing that negative information could spark a bank run or even a banking panic. (478)

While secrecy may be warranted with respect to the examination itself, (479) there is no need to extend complete secrecy to MSD appeal decisions. The OCC and FDIC have managed to strike a balance between releasing meaningful information and protecting sensitive information. (480) Even during the 2008 financial crisis, disclosure of MSD appeals decisions did not incite a bank run or banking panic. Cloaking the MSD appeals processes in complete secrecy serves only to insulate the processes from public accountability.

D. Another Proposal: The Super-Ombudsman

Others have advocated a more far-reaching change to the MSD appeals processes. Over the last few years, members of Congress have repeatedly introduced legislation that would create an appeals process outside of the regulators to review MSDs. (481) The legislation would establish an Ombudsman Office at the Federal Financial Institutions Examination Council. This "super-Ombudsman" (482) would investigate bank complaints about regulators and hear appeals of MSDs. Financial institution trade groups support such legislation. (483) Yet so far, none of the legislative proposals has made it out of committee.

Regulators oppose a super-Ombudsman. They argue that a new unified arbiter could undercut regulators' ability to effectively monitor the safety and soundness of the banking system. They assert that routing appeals through a super-Ombudsman could:

* delay corrective efforts and introduce additional risk in the banking system; (484)

* discourage financial institutions from properly communicating with examiners; (485)

* result in decisions made by people who do not understand the examination process unique to each regulator; (486)

* increase the cost of examinations by effectively requiring "examiners ... to document each and every finding with specific references to ... rules and regulations;" (487) and

* increase regulatory costs by creating another government bureaucracy. (488)

I am not necessarily opposed to an appeals process housed outside the financial institution regulators. A single regulator could unify the differing treatment faced by institutions with different regulators. Institutions may also feel more comfortable bringing appeals to an appellate authority outside their primary regulator. To the extent that a super-Ombudsman would motivate regulators to more fully justify and explain examination ratings and other MSDs in examination reports, it would be beneficial to financial institutions and the examination process as a whole.

However, creating a super-Ombudsman would require Congressional action. This may be an uphill battle because regulators uniformly oppose the proposals. And a super-Ombudsman potentially adds cost for both regulators and financial institutions. (489) Moreover, simply changing the appellate body will not necessarily solve some of the major deficiencies in the current system, namely the inconsistent rules regarding when the appeals processes can be used, lack of a clear and rigorous standard of review, and the lack of transparency. Rather than waiting to see if Congress will impose a super-Ombudsman, regulators should take initiative now to improve their MSD appeals processes.

CONCLUSION

When Congress mandated that each federal financial regulator provide "an independent intra-agency appellate process ... to review material supervisory determinations made at insured depository institutions," (490) it hoped the processes would "provide an avenue of redress ... from uneven treatment by examiners." (491) Now, two decades later, the processes adopted pursuant to this mandate have hardly been used. Regulators differ significantly in the access they provide to the appeals process as well as the standards they use to evaluate appeals. Even finding out basic information about appeals decisions can be difficult. In short, the existing MSD appeals processes do not provide a meaningful avenue for correcting uneven regulatory treatment.

To achieve Congress's goal, regulators must strengthen their MSD appeals processes. Financial institutions should have direct access to a dedicated appellate authority outside of the examination function. Regulators should allow appeals of a broad array of determinations, including all CAMELS ratings and determinations underlying enforcement actions entered with the consent of the financial institution. Regulators should employ a clear and rigorous standard of review. Finally, regulators should release appeals decisions in summary or redacted form. While regulators may initially be skeptical of my recommendations, more robust appeals processes benefit regulators by lending credibility to the regulatory structure.

JULIE ANDERSEN HILL, Associate Professor of Law, University of Alabama School of Law. I am grateful to Samuel P. Golden, Larry L. Hattix, Joy K. Lee, and Hattie M. Ulan who shared their regulatory experiences with me. Their helpfulness does not necessarily indicate agreement with my conclusions. Ashlin Aldinger provided excellent research assistance, and Michael Hill provided invaluable help with the appeals data. Without them, the process of writing this article would not have been nearly as fun. I am indebted to William Andreen, Emily Bremer, Shahar Dillbary, Ronald Krotoszynski, and Andrew Morriss for their comments on earlier drafts of this article. Finally, I appreciate the opportunities to present this work at the Federal Reserve Bank of St. Louis' Conference on Community Banking in the 21st Century and Indiana University Maurer School of Law's faculty workshop series. Comments I received in these venues were particularly astute.

(1.) As used in this Article, the terms "financial institution" and "institution" refer to banks, credit unions, bank holding companies, and financial holding companies. In some circumstances, I distinguish between "banks" (which are regulated by the Office of the Comptroller of the Currency, the Federal Reserve, and/or the Federal Deposit Insurance Corporation) and "credit unions" (which are regulated by the National Credit Union Share Insurance Fund).

(2.) MSDs include "determinations relating to ... (i) examination ratings; (ii) the adequacy of loan loss reserve provisions; and (iii) loan classifications on loans that are significant to an institution." 12 U.S.C. [section] 4806(f)(1)(A) (2012).

(3.) Id. [section][section] 1818(b), 1786(b).

(4.) Id. [section][section] 191, 1464(d), 1787(a), 1818(a)(2) (allowing for the government closure of financial institutions).

(5.) See, e.g., The Financial Institutions Examination Fairness and Reform Act: Hearing on H.R. 3461 Before the Subcomm. on Fin. Insts. & Consumer Credit of the H. Comm, on Fin. Serves., 112th Cong. 164 (2012) [hereinafter Hearing on H.R. 3461] (written statement of Noah Wilcox, President & CEO, Grand Rapids State Bank) ("There is an unmistakable trend toward arbitrary, micromanaged, and unreasonably harsh examinations.").

(6.) Hearing on H.R. 3461, supra note 5, at 150 (statement of Ken Watts, President & CEO, West Virginia Credit Union League).

(7.) Bryan McKenzie, Small Banks Struggle with New Regulations, Daily PROGRESS (Charlottesville, VA), Sept. 5, 2010, available at 2010 WLNR 17668535 (quoting Patricia G. Satterfield, President & CEO, Virginia Association of Community Banks). See also Steve Cocheo, Tough Times on the Exam Front, ABA BANKING J., Nov. 2009, at 6 ("Management that was brilliant two years ago running a CAMELS 1 -rated bank now appears to be a bunch of idiots running a 4- or 5-rated bank.") (quoting banking attorney Jeffrey Gerrish).

(8.) See Heather Anderson, OIG Dismisses Ohio Exam Claims, Credit Union Times, Oct. 17, 2012, at 1, 20 (reporting on a credit union complaint that an examiner had introduced himself as "The Liquidator," harassed credit union staff, and retaliated when the credit union appealed the exam rating); George Waldon, Bank's Tiff with the OCC Takes a Twist, Ark. BUS., Oct. 8, 2012, at 24 (reporting on an Arkansas bank's claim that it received a cease-and-desist order due to a "prejudicial bias [that] flowed from something akin to personal animosity").

(9.) 12 U.S.C. [section] 4806(a) (2012).

(10.) See Bank Appeals Process, OCC Bulletin 2013-15 (June 7, 2013) available at http://www.occ.gov/news-issuances/bulletins/2013/bulletin-2013-15.html, archived at http://perma.cc/BS84-4CLH [hereinafter OCC Bulletin 2013-15]; Fed. Reserve Sys., Internal Appeals Process, 60 Fed. Reg. 16,470 (Mar. 30, 1995); FDIC, Intra-Agency Appeal Process, 77 Fed. Reg. 17,055 (Mar. 23, 2012); NCUA, Guidelines for the Supervisory Review Committee, 76 Fed. Reg. 23,871 (Apr. 29, 2011); NCUA, Guidelines for the Supervisory Review Committee, 77 Fed. Reg. 322,004 (May 31, 2012).

(11.) See infra notes 130, 211, 262, 336-37 and accompanying text.

(12.) In 2012, the Inspector General of each federal financial institution regulator reviewed its agency's MSD appeals process. The reports generated from these reviews were far from scrutinizing. After recounting the appeals process, the reports all noted that few institutions chose to appeal. None of the reports offered extensive suggestions for improvement or compared the effectiveness of the appeals processes across regulators. See generally OFFICE OF INSPECTOR Gen., DEP'T OF THE Treasury, Safety and Soundness: Review of OCC Community Bank Examination and APPEALS PROCESSES (2012), available at http://www.treasury.gov/about/organizational- stracture/ig/Audit%20Reports%20and%20Testimonies/OIG12070.pdf, archived at http://perma.cc/KP3A-XHYP [hereinafter OCC OIG Report]; Office OF Inspector Gen., Bd. of Governors OF THE Fed. Reserve Sys., Audit of the Small Community Bank Examination Process (2012), available at http://www.federalreserve.gov/oig/files/Audit SCB Exam Process August2012.pdf [hereinafter Federal Reserve OIG Report]; FDIC Office of Inspector Gen., The FDIC's Examination Process for Small Community Banks (2012), available at http://www.fdicoig.gov/reports12/12011AUD.pdf, archived at http://perma.cc/DQD6-R4Q9 [hereinafter FDIC OIG Report]; NCUA Office of Inspector Gen., Review of NCUA's Examination and Complaint Processes for Small Credit Unions (2012), available at http://www.ncua.gov/about/Leadership/CO/ OIG/Documents/OIG-12-10ReviewExamProcess.pdf, archived at http://perma.cc/KPG4-M4ND [hereinafter NCUA OIG Report].

(13.) Interview with Samuel P. Golden, Managing Dir., Alvarez & Marsal, former Ombudsman, Office of the Comptroller of the Currency, in Houston, Tex. (Nov. 9, 2012) [hereinafter Golden Interview]; Telephone Interview with Larry L. Hattix, Senior Deputy Comptroller for Enterprise Governance & Ombudsman, Office of the Comptroller of the Currency (June 14. 2013) [hereinafter Hattix Interview]; Telephone Interview with Joy K. Lee, Supervisory Review Comm. Chair & Ombudsman, Nat'l Credit Union Admin. (Apr. 24, 2012) [hereinafter Lee Interview]; Telephone Interview with Hattie M. Ulan, Senior Ethics Counsel, former member Supervisory Review Comm., Nat'l Credit Union Admin. (June 18, 2013) [hereinafter Ulan Interview].

(14.) See generally infra Parts II.A.1, II.B.1, II.C.1, II.D.1 (discussing the appealable determinations and standard of review used by each federal financial institution regulator).

(15.) The MSD appeals data in this article end in 2012.

(16.) See infra text accompanying notes 357-58.

(17.) See infra Part IV.D.

(18.) 12 U.S.C. [section] 4806(a) (2012).

(19.) 12 U.S.C. [section] 1820(d)(1) (2012). There are a few exceptions to this general rule. State-chartered banks may be examined by their federal regulator every other year if the state regulator conducts an adequate examination during the year that the federal regulator does not. Id. [section] 1820(d)(3). In addition, regulators may examine certain small, healthy, and well-managed banks on an eighteen-month cycle. Id. [section] 1820(d)(4). Federal regulators examine federally chartered credit unions on a twelve-month cycle. See Examining the Health of the Credit Union Industry as We Emerge from the Financial Crisis and Recover and Grow Our Economy: Hearing Before the S. Comm, on Banking, Hous., & Urban Affairs, 111th Cong. 6, 8, 25 (2010) (statement of Deborah Matz, Chairman, NCUA). However, for federally-insured state-chartered credit unions, the federal regulator, "[t]o the maximum extent feasible, ... utilize[s] examinations conducted by state regulatory agencies." 12 C.F.R. [section] 741.1 (2014). The federal credit union regulator schedules examinations of state-chartered credit unions "based on risk factors of individual credit unions." NCUA, EXAMINER'S Guide 26-4, available at http://www.ncua.gov/Legal/GuidesEtc/Pages/Examiners-Guide.aspx (last visited Feb. 7, 2015). State credit unions that are large, have received a previous poor examination rating, or pose other unique risks are more likely to receive a federal examination. Id.

(20.) Fed. Fin. Insts. Examination Council, Uniform Financial Institutions Rating System, 61 Fed. Reg. 67,021 (Dec. 19, 1996).

(21.) Id. "Federally insured credit unions are evaluated using the 'CAMEL' rating system, which is substantially similar to the 'CAMELS' system without the 'S' component for rating Sensitivity to market risk." OCC, FRB, FDIC, OTS, NCUA, Interagency Policy Statement on Funding and Liquidity Risk Management, 75 Fed. Reg. 13,656, 13,665 n.19 (Mar. 22, 2010).

(22.) Fed. Fin. Insts. Examination Council, Uniform Financial Institutions Rating System, 61 Fed. Reg. 67,021,67,022.

(23.) Fed. Fin. Insts. Examination Council, Uniform Financial Institutions Rating System, 61 Fed. Reg. 67,021, 67,025.

(24.) Id.

(25.) See id. at 67,027 (explaining that the asset quality rating depends on the level and severity of classified assets).

(26.) See id. at 67,027-28 (explaining that both the management rating and the composite rating depend on the institution's ability to effectively manage risk).

(27.) See Richard Scott Carnell, Jonathan R. Macey & Geoffrey P. Miller, The Law of Financial Institutions 442 (5th ed. 2013).

(28.) Fed. Fin. Insts. Examination Council, Uniform Financial Institutions Rating System, 61 Fed. Reg. 67,021,67,026.

(29.) See Jim Rives, A Perspective on Regulatory Risk: Enforcement Actions and CAMELS, RMA J., Mar. 2011, at 20. See also 12 U.S.C. [section] 1818(b)(8) (2012) (authorizing formal enforcement actions); Julie Andersen Hill, Bank Capital Regulation by Enforcement: An Empirical Study, 87 IND. L.J. 645, 658-62 (2012) (providing a more fulsome description of enforcement actions).

(30.) See What an Enforcement Order Will Cost Your Bank, BANK SAFETY & SOUNDNESS Advisor, Nov. 22, 2010, at 1. Such an action can cost a "$ 100 million community bank ... between $750,000 and $1 million in additional expenses, including hiring outside consultants, regulatory counsel and increased FDIC insurance premiums." Id. For larger institutions, enforcement actions are probably even more costly. Id. (noting that a $348.6 million community bank spent between $1 million and $2 million on a cease-and-desist order).

(31.) 12 C.F.R. [section] 327.4; id. pt. 327, subpt. A, app. A (2014). Credit unions, however, pay share insurance premiums that are based on the institution's number of insured shares outstanding without regard to the CAMEL rating. 12 U.S.C. [section] 1781(c)(2) (2012).

(32.) See 12 U.S.C. [section] 1831o(g) (2012); 12 C.F.R. [section] 325.103(d) (2014) (FDIC); id. [section] 208.43(c) (Federal Reserve); id. [section] 702.102(b) (NCUA); id. [section] 6.4(d) (OCC).

(33.) See 12 U.S.C. [section] 1831f(a) (2012); 12 C.F.R. [section] 337.6(b)(3)(i) (2014). Credit unions tend to "rely less on brokered sources of funds than banks." Letter from Dennis Dollar, Acting Chairman, NCUA to Federally Insured Credit Unions (July 2001), available at http://www.ncua.gov/ Resources/Documents/LCU2001-08.pdf, archived at http://perma.cc/4TGG-HKR8. Thus, credit union regulations do not contain similar restrictions on brokered share accounts.

(34.) See 12 U.S.C. [section] 1831o(e)(3) -(4) (2012); 12 C.F.R. [section] 702.202(a)(3)-(4) (2014) (explaining that an undercapitalized institution cannot increase its average total assets, acquire any company, establish new branches, or enter new lines of business without regulator approval).

(35.) See, e.g., 12 C.F.R. [section] 5.51(d) (2014) (requiring that a bank that is not adequately capitalized provide 90 days notice to the OCC before making changes to the board of directors or senior management); id. [section] 701.14(c) (requiring that a federally-insured credit union that receives a 4 or 5 composite rating provide 30 days notice before makings changes to the board of directors or senior management). Banks may also face restrictions on golden parachutes--payments made to employees as a condition of terminating their employment. See id. [section] 359.

(36.) See generally OCC, Bank Supervision Process: Comptroller's Handbook 12, 72-89 (2014); Div. of Banking Supervision & Regulation, Fed. Reserve, Commercial Bank Examination Manual [section][section] 4200.1, 6010.1 (2014), available at http://www.federalreserve.gov/boarddocs/supmanual/cbem/cbem.pdf [hereinafter Federal Reserve Exam Manual]; FDIC, Trust Examination Manual (2005), available at https://www.fdic.gov/regulations/examinations/trustmanual/. The NCUA does not use the Uniform Interagency Trust Rating System. See Fed. Fin. Insts. Examination Council, Uniform Interagency Trust Rating Systems, 63 Fed. Reg. 54,704 (Oct. 13, 1998).

(37.) See generally FFIEC, IT EXAMINATION HANDBOOK INFOBASE: IT BOOKLETS, available at http://ithandbook.ffiec.gov/it-booklets.aspx (last visited Feb. 7, 2015).

(38.) In a compliance examination, regulators visit the institution to assess conformity with fair lending laws, consumer disclosure laws, unfair or abusive practice laws, and privacy laws. See generally OCC, BANK SUPERVISION PROCESS: COMPTROLLER'S HANDBOOK 12, 90-93 (2014); Div. of Consumer & Cmty. Affairs, Federal Reserve, Consumer Compliance Handbook (2014); FDIC, Compliance Examination Manual (2014); NCUA, Examiner's Guide ch. 19, available at http://www.ncua.gov/Legal/GuidesEtc/Pages/Examiners-Guide.aspx (last visited Feb. 7, 2015).

(39.) See generally OCC, Bank Supervision Process: Comptroller's Handbook 12,94-105 (2014); Div. of Consumer & Cmty. Affairs, Fed. Reserve, Consumer Compliance Handbook ch. VI.99 (2014); FDIC, COMPLIANCE Examination Manual ch. XI (2014). Credit unions are not included within the scope of the Community Reinvestment Act and are not subject to Community Reinvestment Act examinations. See 12 U.S.C. [section][section] 1813(c)(2), 2902-03 (2012).

(40.) In a Bank Secrecy Act/anti-money laundering examination, regulators assess an institution's compliance with laws designed to help law enforcement officials "identify the source, volume, and movement of currency and other monetary instruments." Fed. Fin. INSTS. EXAMINATION COUNCIL, Bank Secrecy Act/Anti-Money Laundering Examination Manual 7 (2010).

(41.) For example, although the Community Reinvestment Act does not generally allow regulators to bring enforcement actions against banks that do not adequately serve the credit needs of the community, the examiner's report is publicly released. See Carnell, Macey & Miller, supra note 27, at 361. Thus, any adverse finding may damage the institution's reputation.

(42.) See FDIC v. Bank of Coushatta, 930 F.2d 1122,1126 (5th Cir. 1991).

(43.) See Joseph T. Lynyak III, Responding to Capital Directives and Related Enforcement Actions, 129 Banking L.J. 387, 390 (2012) ("[B]ecause the Bank Regulators' enforcement alternatives are so expansive[,] ... banks do not elect to contest administratively the issuance of a package of capital-related orders.").

(44.) See, e.g., Frontier State Bank v. FDIC, 702 F.3d 588, 597 (10th Cir. 2012) (holding that a regulator's decision to set an individual bank minimum capital requirement in a cease-and-desist order was not subject to judicial review because Congress granted complete discretion to bank regulators); Greene Cnty. Bank v. FDIC, 92 F.3d 633, 636 (8th Cir. 1996) (holding that a regulator's conclusion that a bank had not complied with a memorandum of understanding was supported by substantial evidence).

(45.) Can You Sue to Reverse a Receivership, Bank SAFETY & SOUNDNESS ADVISOR, Apr. 4. 2011, at 1 (explaining that regulators have broad power to close any financial institution with an "unsafe or unsound condition" and even if the regulator acts improperly the financial institution's assets will likely have been sold to others before the legal challenge concludes). See also Lynyak, supra note 43, at 397 ("Although there are instances in which the closing of a bank may be viewed by stakeholders as unfair or perhaps illegal, there are no modern instances in which a bank closing has been reversed or enjoined.").

(46.) See 12 C.F.R. [section][section] 4.32(b)(2), 4.36 (2014) (OCC); id. [section][section] 309.5(g)(8), 309.6(a), 350.9 (FDIC); id. [section][section] 261.2(c)(1), 261.20(g), 261.22(e) (Federal Reserve); id. [section] 792.30 (2014) (NCUA).

(47.) See Press Release, OCC, FDIC, Fed. Reserve & OTS, Interagency Advisory on the Confidentiality of the Supervisory Rating and Other Nonpublic Supervisory Information (Feb. 28, 2005), available at http://www.fdic.gov/news/news/press/2005/pr1805a.html, archived at http://perma. cc/YZ4Q-EEMC (citing the criminal penalties associated with 18 U.S.C. [section] 641); Material Supervisory Determination Decision of Dec. 10, 1999, SARC-99-07 (FDIC Dec. 10, 1999), available at http://www.fdic.gov/regulations/laws/sarc/sarcappeals/sarc9907.html, archived at http:// perma.cc/5MK8-ZXTR (upholding an examiner determination that a bank had violated "Section 309.6 of FDIC Rules and Regulations, which prohibits disclosure of confidential supervisory information, without the prior approval of the FDIC" when the bank "copied individual members of Congress and the General Accounting Office ... on its appeal of' an examination rating); Director Banned for Disclosing CAMEL Rating, Credit Union J., Apr. 2, 2012, at 1 (reporting that the NCUA had banned a credit union director from associating with any credit union because he publicly disclosed a credit union CAMEL rating).

(48.) Eugene A. Ludwig, Column: After Dodd-Frank, More Ombudsmen, Am. Banker, Sept. 16, 2010, at 9. Technically, the FDIC announced an informal policy for reviewing supervisory decisions in early 1992, but the policy was short on details and only provided that the Division of Supervision Director would "make a good faith effort to evaluate and resolve" written complaints from banks. FDIC, Fin. Inst. Letter 11-92, Procedures for Requesting Review of Supervisory Decisions (Feb. 7, 1992), available at 1992 WL 714970.

(49.) Stephen Goldstein, Metropolitan Money Movers & Shakers, WASH. TIMES, Aug. 16, 1993, at B5.

(50.) See generally An Examination of the Banking Crises OF the 1980s and Early 1990s, in 1 Div. of Research & Statistics, FDIC, History of the Eighties--Lessons for the Future (1997), available at https://www.fdic.gov/bank/historical/history/ (explaining that a collapse of energy prices, real estate downturns, and an agricultural recession all combined to stress the banking industry).

(51.) Golden Interview, supra note 13 ("On [President Clinton's] transition team ... there were several key bankers from some of the largest banks in the country who said, 'You need something to provide an avenue that when we disagree with the bank examiners that you don't go to the fox in the henhouse....'").

(52.) OCC Banking Circular No. 272 (June 11, 1993).

(53.) Appeals Process, 13 OCC Q.J., no. 1, 1993-1994, at 61; Steve Cocheo, OCC's First Ombudsman Hangs Out His Shingle, ABA Banking J., Oct. 1993, at 6. The office was initially located in Houston, Texas in part to create an appearance of objectivity. Barbara A. Rehm, Former Examiner Ready for Jobas OCC's Complaint Department, Am. BANKER, Sept. 9, 1993, at 18.

(54.) Golden Interview, supra note 13 ("[T]he [appeals] process is binding arbitration because you listen to both sides, you go through, and you make a de novo separate decision on what is the right outcome.").

(55.) OCC Banking Circular No. 272 (June 11, 1993). Ombudsman Golden explained: "There were no forms that [were] required; there was no infrastructure that's required. You simply frame[d] the issue that you [had]." Golden Interview, supra note 13.

(56.) The OCC Ombudsman's Office initially consisted of Ombudsman Golden and a single administrative assistant, but it hired three additional staff members in the first year. Rehm, supra note 53, at 18; Golden Interview, supra note 13.

(57.) OCC policy allowed both examination staff and bank management the opportunity to request a telephone or in-person meeting. See OCC Banking Circular No. 272 (June 11, 1993). Under the direction of Ombudsman Golden, staff from the Ombudsman's Office would almost always visit the bank. Golden Interview, supra note 13.

(58.) Appeals Process, supra note 53, at 61.

(59.) Golden Interview, supra note 13. See also Bill Atkinson, Bankers Not Shy About Appealing OCC Decisions, Am. Banker, Jan. 31, 1994, at 6.

(60.) Terrence O'Hara, To Feisty CEO, 'Needs to Improve' Meant War, Am. Banker, May 17, 1994, at 8 (quoting Carl J. Schmitt, Chairman & CEO, Univ. Nat'l Bank & Trust Co.).

(61.) Golden Interview, supra note 13 ("[The FDIC and Federal Reserve] would not have independently [created an independent MSD appeals process] had it not been for state banks who said, 'Why do national banks have that and we don't?' So that's when Congress essentially mandated that they would do it.'"). It is not clear whether credit unions were equally interested in an appeals process. See Ulan Interview, supra note 13 (stating that she did not recall credit unions "clamoring for [an appeals] process").

(62.) OCC Report of the Ombudsman 1995-1996, at 3 (1997).

(63.) Riegle Community Development and Regulatory Improvement Act of 1994, Pub. L. No. 103-325, [section] 309(a), 108 Stat. 2160, 2218 (codified at 12 U.S.C. [section] 4806(a) (2012)). The statute applies to "each appropriate Federal banking agency and the National Credit Union Administration Board." Id. "Federal banking agency" is currently defined to include only the OCC, Federal Reserve, and FDIC. See 12 U.S.C. [section][section] 1813(q), 4801(1) (2012). The newly created Consumer Financial Protection Bureau ("CFPB"), although generally thought of as an additional bank regulator, does not fall within the ambit of the statute. The CFPB has voluntarily established a supervisory appeals process, but notes that it "is not intended to nor should it be construed to ... create or confer upon any person, including one who is the subject of CFPB supervisory, investigation or enforcement activity, any substantive or procedural rights or defenses that are enforceable in any manner." CFPB Bulletin 2012-07, Appeals of Supervisory Matters 2 n.1 (Oct. 31, 2012), available at http://www.consumerfinance.gov/f/201210 cfpb_bulletin_supervisory-appeals-process.pdf, archived at http://perma.cc/24H6-WE6P. There is no substantive reason that the CFPB should not be required by statute to provide an appeals process on par with other financial institution regulators.

(64.) S. Rep. No. 103-169, at 51 (1993), reprinted in 1994 U.S.C.C.A.N. 1881, 1935 (explaining that "[e]venhandedness is important to maintain confidence in our regulatory system").

(65.) 12 U.S.C. [section] 4806(f)(2) (2012). The statute provides only for "intra-agency" agency appeals processes. Id. [section] 4806(a). It does not address whether an MSD may be further appealed in federal court. See Donald R. Cassling, Banks Must Pursue All Agency Appeal Procedures Prior to Filing Suit Against the OCC, 121 BANKING LJ. 760, 762 (2004) ("As Section 4806 does not directly authorize judicial review of OCC deicisons, [financial institutions] must provide that a final agency action occurred."). In Peoples Nat'l Bank v. OCC, the United States Court of Appeals for the Fifth Circuit explained in dicta that a bank may bring a claim in federal court under the Administrative Procedure Act after exhausting the MSD intra-agency process. 362 F.d 333, 336-37 (2004) (dismissing an appeal for lack of subject matter jurisdiction when the bank had not filed an intra-agency appeal). However, I was unable to locate any judicial appeal of a decision made through any of the regulators' MSD appeals processes. Because this article focuses on the intra-agency appeals processes, I do not further address the potential availability of judicial review.

(66.) 12 U.S.C. [section] 4806(b)(2) (2012).

(67.) Id. [section] 4806(f)(1)(A).

(68.) Id. [section] 4806(f)(1)(B).

(69.) Id. [section] 4806(g).

(70.) I sought interviews with many past and current agency officials. The Federal Reserve has adopted a process that essentially creates an ad hoc review committee for each appeal. See infra notes 169-70 and accompanying text. Thus, it was impossible to identify an individual who could give a first-person account of the functioning of the appeals process as a whole. My attempts to secure interviews with FDIC officials were unsuccessful. I did, however, gather significant information from interviews of past and current OCC Ombudsmen and past and current members of the NCUA's Supervisory Review Committee. See supra note 13.

(71.) About the OCC, OCC, http://www.occ.treas.gov/aboutocc.htm, archived at http://perma.cc/9G6Z-AETA (last visited Feb. 7, 2015). In 2011, the OCC gained regulatory authority over national thrifts when the Dodd-Frank Act shuttered the Office of Thrift Supervision. See 12 U.S.C. [section][section] 5411-12 (2012).

(72.) See Find Banks, FDIC, https://www2.fdic.gov/idasp/main.asp (search with Information as of Dec. 31, 2012 and Federal Regulator as Comptroller of the Currency) (last visited Feb. 25, 2015).

(73.) See Summary of Deposits, FDIC, http://www2.fdic.gov/sod/ (linking to Summary Tables, which provides a table for the June 30, 2012 report for the Top 50 Commercial Banks and Savings Institutions by Deposits).

(74.) See Find Banks, FDIC, https://www2.fdic.gov/idasp/main.asp (search with Information as of Dec. 31, 2012, Size or Performance as Total Assets ($) Equal or Less Than $1,000,000,000, and Federal Regulator as Comptroller of the Currency) (last visited Feb. 26,2015).

(75.) OCC, AR-2012, Annual Report: Fiscal Year 2012, inside front cover.

(76.) See supra notes 61-63 and accompanying text.

(77.) The OCC revised the procedures in 1996, 2002, 2011, and 2013. See OCC, Independent Regulatory Appeals Process, 61 Fed. Reg. 7,042 (Feb. 23, 1996); National Bank Appeals Process, OCC Bulletin 1996-18 (Feb. 23, 1996); National Bank Appeals Process, OCC Bulletin 2002-9 (Feb. 25, 2002); Bank Appeals Process, OCC Bulletin 2011-44 (Nov. 1, 2011); OCC BULLETIN 2013-15, supra note 10.

(78.) OCC Bulletin 2013-15, supra note 10; OCC, Policies and Procedures Manual (PPM) 1000-9 (Revised), Administering Bank Appeals (June 3, 2013) [hereinafter OCC PPM 1000-9] (acquired through a Freedom of Information Act request, copy on file with author); OCC, Appeals Process for National Banks and Federal Savings Associations (2013), available at http://www.occ.gov/topics/dispute-resolution/bank-appeals/bank-appeals-process-brochure.pdf, archived at http://perma.cc/GYQ6-E936 [hereinafter OCC Bank Appeals Process Brochure].

(79.) OCC BULLETIN 2013-15, supra note 10; OCC PPM 1000-9, supra note 78.

(80.) OCC BULLETIN 2013-15, supra note 10.

(81.) Id.

(82.) See id. ("A formal appeal to the Deputy Comptroller shall be filed with the Deputy Comptroller responsible for the unit that issued the decision or action in dispute.").

(83.) Id.

(84.) Press Release, OCC, The Office of the Comptroller of the Currency Names Larry Hattix to be Ombudsman (Feb. 8, 2008), available at http://www.occ.gov/news-issuances/news-releases/2008/nr-occ-2008-12.html, archived at http://perma.cc/3LND-BDYV. Before becoming Ombudsman both men had lengthy careers as OCC examiners. Id.

(85.) Hattix Interview, supra note 13. Three additional Ombudsman Office employees assist with the appeals function as needed. Id. The Ombudsman calls on other experts throughout the OCC to help with appeals on a case-by-case basis. Id.

(86.) OCC Bulletin 2013-15, supra note 10.

(87.) Id. See also OCC PPM 1000-9, supra note 78 (stating that a formal appeal should include "[s]upervisory standards (i.e., law citation or supervisory guidance) thought to be applied inaccurately").

(88.) OCC Bulletin 2013-15, supra note 10.

(89.) Hattix Interview, supra note 13.

(90.) OCC BULLETIN 2013-15, supra note 10.

(91.) Id.

(92.) Id.

(93.) Id.

(94.) Because the Deputy Comptroller oversees the examination function, some banks may fear retaliation is more likely if the first appeal is filed with the Deputy Comptroller. The OCC's process allows these banks to bypass the Deputy Comptroller.

(95.) OCC Bulletin 2013-15, supra note 10.

(96.) Hattix Interview, supra note 13 ("There have been ... occasions when sometimes I will visit [the appealing bank] if I think that that's appropriate. There's times also when the banks have asked if they can come in, and we always allow that.... [B]ut it's not the majority. It's the minority."). In contrast Mr. Hattix's predecessor, Ombudsman Samuel P. Golden, reports that he or his staff nearly always visited appealing banks. He explains:
   Most of the time, if I want to know how you live, I'm going to go
   to your house. You can tell me about how you live, and then I go to
   your house and it is junky as hell. You know, seriously. If you
   want to know the real facts, you literally go. So ninety-five
   percent of the time we went to the bank.


Golden Interview, supra note 13.

(97.) Hattix Interview, supra note 13 ("[O]ur goal is to try and get things resolved within forty-five days. Right now we are probably averaging probably closer to sixty, and I think that that has to do with the types of cases that we are getting right now with the economy being what it is."). See also OCC Bulletin 2013-15, supra note 10.

(98.) 12 U.S.C. [section] 4806(f)(1)(A) (2012).

(99.) OCC Bulletin 2013-15, supra note 10.

(100.) Id. Additionally, banks may not appeal decisions to close a bank, preliminary conclusions that have not yet been finalized, formal or informal rulemaking, formal or informal adjudications under the Administrative Procedures Act, or FOIA decisions. Id.

(101.) Id.

(102.) See id. ("While banks may not appeal a decision by the supervisory office to pursue a formal enforcement-related action, banks may appeal conclusions in the [report of examination]."); Hattix Interview, supra note 13 ("[I]f you're under an enforcement agreement and that's what you are appealing, the enforcement document itself, then we could probably say, 'Yeah, that's probably not going to be appealable.' But a lot of times, the underlying factors, you know, your ratings, you can still appeal.").

(103.) OCC BULLETIN 2013-15, supra note 10.

(104.) Hattix Interview, supra note 13.

(105.) Id.

(106.) Id.

(107.) OCC BULLETIN 2013-15, supra note 10.

(108.) Hattix Interview, supra note 13 (explaining that if an MSD had instructed a bank to reimburse customers for fair lending violations, a stay might be appropriate while the Ombudsman reviewed the violation).

(109.) OCC Bulletin 2013-15, supra note 10.

(110.) OCC Bank Appeals Process Brochure, supra note 78.

(111.) Id.

(112.) Golden Interview, supra note 13 ("Most appeals were de novo, which means this: If you appeal it, what you are asking for is a reassessment of the facts and circumstances and a decision that you believe is fair and balanced. And so what I had was the opportunity to go back and not be bound by the decision that the exam team had made. And that 'not being bound by' means that I could change it in any way that we believed that our analysis, the facts and circumstances were that led to the decision.").

(113.) Id. While Ombudsman Golden reviewed most appeals de novo, he used a more limited standard of review for appeals involving banks with formal enforcement actions. Id. In those cases, the Ombudsman had to "take the same facts and circumstances that the exam team had," and then determine whether the examiners' decisions "were consistent with the examination guidelines." Id. The OCC's review of findings related to enforcement action is more limited now. See OCC BULLETIN 2013-15, supra note 10; Hearing on HR. 3461, supra note 5, at 53 (testimony of Eugene A. Ludwig, Founder & CEO, Promontory Financial Group, LLC).

(114.) Hattix Interview, supra note 13.

(115.) Id.

(116.) Id.

(117.) See supra note 96.

(118.) The OCC guidance does not provide distinctions between a Deputy Comptroller appeal and an Ombudsman appeal that suggest these officials might employ a different standard of review. See OCC Bulletin 2013-15, supra note 10. However, because I did not interview any Deputy Comptrollers, it is hard to know whether they approach appeals like the Ombudsmen.

(119.) Id.

(120.) See infra notes 133-34 and accompanying text.

(121.) Rachel Witkowski, OCC's Ombudsman Opposes Appeal Reform Bill, Am. Banker, Apr. 19, 2012, available at 2012 WLNR 8174226 (quoting OCC Ombudsman Larry L. Hattix).

(122.) Golden Interview, supra note 13 (noting that, while it was usually possible to preserve confidentiality while still having meaningful disclosure, occasionally "the summaries had to be neutered to the point where it was difficult to" fully describe the appeal).

(123.) OCC Bulletin 2013-15, supra note 10 ("The Ombudsman will contact bank management (1) 60 days after the date of the decision letter and (2) 60 days after the completion of the first examination of the appellant bank following its appeal."). Banks may also contact the Ombudsman about retaliation at their convenience. Id.

(124.) Id.

(125.) Id.

(126.) Hattix Interview, supra note 13.

(127.) OCC Bulletin 2013-15, supra note 10. Ombudsman Hattix explains that disciplinary action might be taken by either the Inspector General or the Ombudsman. Hattix Interview, supra note 13.

(128.) OCC Bulletin 2013-15, supra note 10 (noting that "[t]he Comptroller will make the final decision on any such exclusion").

(129.) See supra notes 78-83 and accompanying text.

(130.) Letter from Frank D. Vance, Jr., Manager, Disclosure Services & FOIA Officer, OCC to author (Feb. 28, 2014) (on file with author).

(131.) The letter accompanying the appeals list explains: "Our Deputy Comptroller Offices were unable to locate any documents showing evidence of any appeals at their level prior to June 2002." Id. In response to a prior FOIA request for the same documents, the OCC advised that "some underlying documents from the 1990s would have been destroyed through our normal destruction schedules." Letter from Frank D. Vance, Jr., Manager, Disclosure Service & FOIA Officer, OCC to author (Aug. 21, 2013) (on file with author).

(132.) Current OCC Ombudsman Larry L. Hattix estimates that 20% of appeals originate with a Deputy Comptroller. Hattix Interview, supra note 13. There were 58 Ombudsman appeals between 2002 and 2012. See infra Figure 1. The 11 Deputy Comptroller appeals would be less than 20% of the total number of appeals during that time.

(133.) See, e.g., Appeals Process, 13 OCC Q.J., no. 1, 1993-1994, at 61, 61-66; OCC Report OF the Ombudsman 1995-1996, at 23-184 (1997).

(134.) See Bank Appeals Summaries, OCC, http://www.occ.gov/topics/dispute-resolution/bank- appeals/summaries/index-summaries.html (last visited Feb. 26, 2015). Due to the workload in the Ombudsman's Office, it currently takes about 90 to 120 days after the decision for the summary to appear on the Internet. Hattix Interview, supra note 13.

(135.) To provide the OCC Ombudsman appeals data contained in this section, I reviewed and classified all of the appeals summaries from the OCC annual reports, the OCC Quartelry Journal, and the OCC Intranet. See supra notes 133-34 and accompanying text (describing these sources).The printed and Internet sources contained minor discrepancies. When sources conflicted, I relied on the printed source.

(136.) See supra note 50 and accompanying text.

(137.) Ombudsman Golden explained: "I traveled, the first year, over 200,000 miles making sure that everyone understood--that no one was fearful of [the appeals] process...." Golden Interview, supra note 13. He credited the early number of appeals with this communication strategy. Id.

(138.) Find Banks, FDIC, https://www2.fdic.gov/idasp/raain.asp (search with Information as of Dec. 31, 1992 and Federal Regulator as Comptroller of the Currency) (last visited Feb. 25, 2015)

(139.) See id. (search with Information as of Dec. 31, 2012 and Federal Regulator as Comptroller of the Currency).

(140.) Hattix Interview, supra note 13.

(141.) OCC OIG Report, supra note 12, at 11 (this number includes appeals fded with both the Ombudsman and the appropriate Deputy Comptroller).

(142.) See, e.g., Joe Adler, Why Camels Aren't as Secret as You Think, Am. Banker, Aug. 15, 2011, at 1 ("[M]ost agree it is impossible to replicate the official ratings exactly, since the regulators likely include highly subjective information about individual institutions in determining a Camels score. One crucial element of the rating system is the quality of a bank's management, which is not necessarily quantifiable."); Kathryn Reed Edge, Anatomy of a Bank Failure, TENN. B.J., Apr. 2012,

at 25 ("The composite is not an average of the other ratings and is sometimes highly subjective.").

(143.) Bd. of Governors of the Fed. Reserve Sys., 99th Annual Report 2012, at 1 (2013).

(144.) See id.

(145.) 12U.S.C. [section][section] 222, 321 (2012).

(146.) Id. [section] 222.

(147.) See supra Part II.A.

(148.) See 12 U.S.C. [section] 325 (2012); Bd. of Governors of the Fed. Reserve Sys., 99th Annual Report 2013, at 51 -52 (2013).

(149.) See Find Banks, FD1C, https://www2.fdic.gov/idasp/main.asp (search with Information as of Dec. 31, 2012 and Federal Regulator as Federal Reserve Board) (last visited Feb. 25,2015).

(150.) Federal Reserve Exam Manual, supra note 36 [section] 1000.1 ("Under the alternate-year examination program, those banks that qualify are examined in alternate examination cycles by the Reserve Bank and the state.").

(151.) 12 U.S.C. [section][section] 1844, 1467a (2012). See also Bd. of Governors of the Fed. Reserve Sys., 99th Annual REPORT 2012, at 51 (2013) ("The Federal Reserve also has responsibility for supervising the operations of all Edge Act and agreement corporations, the international operations of state member banks and U.S. [bank holding companies], and the U.S. operations of foreign banking organizations.").

(152.) Bd. of Governors of the Fed. Reserve Sys., 99th Annual Report 2012, at 56 (2013).

(153.) For example, the four largest bank holding companies each have total assets exceeding $1 billion. Holding Companies with Assets Greater than $10 Billion, Federal Reserve System National Information Center, http://www.ffiec.gov/nicpubweb/nicweb/Top50Form.aspx, archived at http://perma.ee/2QLD-G5RU (last visited Feb. 26, 2015).

(154.) See Federal Reserve Exam Manual, supra note 36, [section] 2060.2 (noting the existence of "small shell" holding companies that do not have "formal written budgets or [financial] plans").

(155.) See Div. of Banking Supervision & Regulation, Bd. of Governors of the Fed. Reserve Sys., Supervisory Letter 02-1, Revisions to Bank Holding Company Supervision Procedures for Organizations with Total Consolidated Assets of $5 Billion or Less (Jan. 9, 2002), available at http://www.federalreserve.gOv/boarddocs/srletters/2002/sr0201.htm, archived at http://perma.cc/484W26WA.

(156.) Bd. of Governors of the Fed. Reserve Sys., 99th Annual Report 2012, at 53 tbl.1 (2013).

(157.) Bd. of Governors of the Fed. Reserve Sys., Annual Report: Budget Review 2013, at 37 tbl.B.3, 42 tbl.C.4 (2013) (noting that there were 383 supervision employees at the Board of Governors and 3725 supervision employees at the regional Federal Reserve Banks).

(158.) Fed. Reserve Sys., Internal Appeals Process, 60 Fed. Reg. 16,470 (Mar. 30, 1995).

(159.) Id. at 16,473.

(160.) Mat 16,472.

(161.) Id.

(162.) See id. at 16,473 ("Each Reserve Bank shall make these guidelines and the Reserve Bank's process for selecting a review panel available to each institution in its district, any institution appealing a material supervisory determination, and any member of the public who requests them.").

(163.) Fed. Reserve Bank of Atlanta, Procedures for Appeals of material Supervisory DETERMINATIONS (2010), available at http://www.frbatlanta.org/documents/banking/sr/FRBATL_ Appeals%20 Proc_030210.pdf [hereinafter FRB Atlanta Appeals]; Fed. Reserve Bank of Boston, Appeals Process: Guidelines for Appeals of Material Supervisory Determinations, available at http://www.bostonfed.org/bankinfo/supinfo/appeals-process.htm (last updated Oct. 15, 2009) [hereinafter FRB Boston Appeals]; Fed. Reserve Bank of Kansas City, Procedures for Appealing Material Supervisory Determinations, available at http://www.kansascityfed.org/publicat/banking/membership/smb/AppealProcedures.pdf, archived at http://perma.cc/4JZX-UWXD (last visited Feb. 7, 2015) [hereinafter FRB KANSAS CITY Appeals]; Fed. Reserve Bank of Minneapolis, Procedures for Appealing Material Supervisory Determinations (2014), available at https://www.minneapolisfed.org/~/media/files/banking/ srcappealsprocedures020114final.pdf?la=en [hereinafter FRB Minneapolis Appeals]; Fed. Reserve Bank of New York, Procedures for Appeals of Adverse Material Supervisory DETERMINATIONS, available at http://www.newyorkfed.org/banking/pdf/appeals_procedures.pdf, archived at http://perma.cc/6BUX-HVHV (last visited Feb. 7, 2015) [hereinafter FRB NEW YORK Appeals]; Fed. Reserve Bank of Philadelphia, Policy Statement on Appeals of Material Supervisory Determinations (2014) [hereinafter FRB Philadelphia Appeals], available at http://www.phil.frb.org/bank-resources/supervision-and-regulation/appeals-policy/AppealPolicy.pdf, archived at http://perma.cc/46SM-WD79; Fed. Reserve Bank of Richmond, Policy Statement on Appeals of Material Supervisory Determinations (2012), available at http://www.richmond fed.org/banking/supervision_and_regulation/pdf/policy_statement_on_appeals.pdf, archived at http://perma.cc/R669-R65G [hereinafter FRB Richmond Appeals]; Fed. Reserve Bank of San Francisco, Policy Statement on Appeals of Material Supervisory Determinations (2013), available at http://www.frbsf.org/banking-supervision/regulation/appeals-policy/FRBSF-Appeals-Policy.pdf, archived at http://perma.cc/9GPZ-BBLU [hereinafter FRB San Francisco Appeals].

(164.) A 2012 Federal Reserve Office of Inspector General audit of the community bank examination process "found that all 12 Reserve Banks have established appeals policies that follow Board guidance." FEDERAL RESERVE OIG REPORT, supra note 12, at 24. To gather such policies, I made a FOIA request to the Federal Reserve for all "policies currently in effect for handling ... appeals of material supervisory determinations." See E-mail from author to [Federal Reserve] FOIA Requests (May 27, 2013) (on file with author). The Federal Reserve's response did not contain policies from the Federal Reserve Banks of Boston, Chicago, Cleveland, or St. Louis. See E-mail from Denise Harris, FOIA Office, Federal Reserve Board to author (June 10, 2013) (on file with author). 1 telephoned the Federal Reserve's FOIA Office and confirmed that no policies were available for these Reserve Banks. Telephone call with Denise Harris, FOIA Office, Federal Reserve Board (June 21, 2013). Later I found a copy of the Boston guidelines online. See FRB BOSTON Appeals, supra note 163.

(165.) Fed. Reserve Sys., Internal Appeals Process, 60 Fed. Reg. 16,470, 16,472 (Mar. 30, 1995).

(166.) Id.

(167.) Id.

(168.) Mat 16,473.

(169.) Mat 16,472.

(170.) See FRB Atlanta APPEALS, supra note 163, at 2 (providing for a three person review panel); FRB BOSTON APPEALS, supra note 163 ("A Review Panel, composed of three department representatives and selected by the SR&C Officer; or three officers/managers from other districts will be established to review the appeal."); FRB Philadelphia Appeals, supra note 163, [section] IV.B (specifying that a review panel consists of three or five individuals); FRB RICHMOND APPEALS, supra note 163, at IV.B (stating that the reserve panel must contain at least three individuals);. But see FRB KANSAS CITY Appeals, supra note 163, at 4 (stating that the size of the panel should be determined "in light of the nature of the appeal, availability of independent qualified officers and staff, and other factors deemed relevant by the Appropriate Reserve Bank Official"); FRB MINNEAPOLIS Appeals, supra note 163, at 3 (stating that the size of the panel should be determined "in light of the nature of the appeal, availability of independent qualified officers and staff, and other factors deemed relevant by the Officer in Charge of Supervision"); FRB New YORK Appeals, supra note 163, [section] 7(a) (stating that the review panel must consist of at least one individual); FRB SAN FRANCISCO Appeals, supra note 163, at 3 (failing to specify the number of individuals on a review panel).

(171.) Ben S. Bernanke, Chairman, Bd. of Governors of the Fed. Reserve Sys., Speech at the Future of Community Banking Conference: Community Banking (Feb. 16, 2012), available at 2012 WL 523933.

(172.) Federal Reserve OIG Report, supra note 12, at 22 ("According to Board staff, members of the independent panel are often selected from other Reserve Banks to ensure their independence."). See also FRB BOSTON APPEALS, supra note 163 (noting that the panel may consist of "three officers/managers from other districts"); FRB Philadelphia Appeals, supra note 163, [section] IV.B (stating that the review panel may consist of "officers or senior staff of the [Federal] Reserve Bank [of Philadelphia]" or "officers or senior staff that are othersize employed by the Federal Reserve System").

(173.) Fed. Reserve Sys., Internal Appeals Process, 60 Fed. Reg. 16,470, 16,472 (Mar. 30, 1995).

(174.) Id.

(175.) FRB New York Appeals, supra note 163, [section] 9(a).

(176.) Id. [section] 9(c).

(177.) Some Federal Reserve Banks' policies allow the review panel to determine whether a transcript or recording is made. FRB ATLANTA APPEALS, supra note 163, at 3; FRB PHILADELPHIA Appeals, supra note 163, [section] V.B.5.d; FRB SAN Francisco Appeals, supra note 163, at 5. Other Federal Reserve Banks' policies require a transcript or recording. FRB KANSAS CITY Appeals, supra note 163, at 6; FRB Richmond Appeals, supra note 163, [section] V.B.5.d; FRB New York Appeals, supra note 163, [section] 9(d); FRB MINNEAPOLIS APPEALS, supra note 163, [section] 6(d).

(178.) Fed. Reserve Sys., Internal Appeals Process, 60 Fed. Reg. 16,470, 16,473 (Mar. 30, 1995).

(179.) Id

(180.) FRB San Francisco Appeals, supra note 163, at 2.

(181.) Fed. Reserve Sys., Internal Appeals Process, 60 Fed. Reg. 16,470, 16,473 (Mar. 30, 1995).

(182.) Id

(183.) Id

(184.) FRB New York Appeals, supra note 163, [section] 10(a).

(185.) FRB KANSAS CITY Appeals, supra note 163, at 6 ("The Appeal Panel will then determine such administrative items as its standard for review.").

(186.) FRB Kansas City Appeals, supra note 163, at 6.

(187.) Id

(188.) Fed. Reserve Bank of Minneapolis, Procedures for Appealing Material Supervisory Determinations 7 (2004).

(189.) FRB Minneapolis Appeals, supra note 163, at 4.

(190.) Id.

(191.) The policies of the Federal Reserve Banks of Philadelphia and Richmond state that the written decision should "set forth the basis for the Review Panel's conclusions, including the scope of the review." FRB PHILADELPHIA APPEALS, supra note 163, at 8; FRB Richmond Appeals, supra note 163, [section] V.C.1.

(192.) Fed. Reserve Sys., Internal Appeals Process, 60 Fed. Reg. 16,470, 16,472 (Mar. 30, 1995).

(193.) See, e.g., FRB Kansas City Appeals, supra note 163, at 7 ("The written decision will include a memorandum outlining the basis for the Appeal Panel's conclusions, including appropriate citations of legal authority or [Federal Reserve System] policies and documentation provided by the Appellant or the Reserve Bank.").

(194.) See, e.g., FRB PHILADELPHIA APPEALS, supra note 163, [section] V.C.2.

(195.) See, e.g., FRB Atlanta Appeals, supra note 163, at 3.

(196.) Fed. Reserve Sys., Internal Appeals Process, 60 Fed. Reg. at 16,472. Federal Reserve Bank policies generally provide that an appeal is not considered "informationally complete" until any requested hearing has been held. See, e.g., FRB RICHMOND APPEALS, supra note 163, [section] V.B.3.

(197.) Fed. Reserve Sys., Internal Appeals Process, 60 Fed. Reg. at 16,472. The Federal Reserve Bank of New York's policy provides that the second level of appeal may be heard by the Federal Reserve Bank "President or his or her appointed delegate (e.g., the [Federal Reserve Bank's] Management Committee)." FRB New York Appeals, supra note 163, [section] 11(a).

(198.) Fed. Reserve Sys., Internal Appeals Process, 60 Fed. Reg. at 16,472.

(199.) Id.

(200.) FRB Philadelphia Appeals, supra note 163, at 9; FRB Richmond Appeals, supra note 163, [section] VI.C.2; FRB Minneapolis Appeals, supra note 163, at 6.

(201.) FRB Kansas City Appeals, supra note 163, at 8 ("The President Specific standards for review are not set, but rather the President may base his/her decision on whatever facts and information the President deems relevant under the circumstances."; FRB MINNEAPOLIS Appeals, supra note 163, at 6 ("There is no specific standard of review; rather, the President may base his/her decision on whatever facts and information the President deems relevant under the circumstances.").

(202.) Fed. Reserve Sys., Internal Appeals Process, 60 Fed. Reg. at 16,473.

(203.) Ben S. Bemanke, Chairman, Bd. of Governors of the Federal Reserve System, Speech at the Future of Community Banking Conference: Community Banking (Feb. 16, 2012), available at 2012 WL 523933.

(204.) Fed. Reserve Sys., Internal Appeals Process, 60 Fed. Reg. at 16,473.

(205.) Id.

(206.) Id.

(207.) See, e.g., FRB Richmond Appeals, supra note 163, [section] VIII.B.

(208.) See FRB ATLANTA APPEALS, supra note 163, at 4; FRB PHILADELPHIA APPEALS, supra note 163, at 10; FRB Richmond Appeals, supra note 163, at VIII.A; FRB SAN Francisco Appeals, supra note 163, at 7. Other Reserve Banks' policies specify that protections are crafted based on the circumstances of the case by the review panel or other Reserve Bank officials. FRB KANSAS City Appeals, supra note 163, at 9-10; FRB New York Appeals, supra note 163, [section] 12(b).

(209.) Ombudsman Policy Statement, Bd. OF GOVERNORS OF THE Fed. Reserve Sys., http://www.federalreserve.gov/aboutthefed/ombpolicy.htm, archived at http://perma.cc/6ZW4-VPR4 (last updated Feb. 20, 2014). See also Fed. Reserve Sys., Internal Appeals Process, 60 Fed. Reg. at 16,473 ("The Board's Ombudsman will periodically contact institutions after their appeals have been decided in order to make certain that no retaliation has occurred.").

(210.) Fed. Reserve Sys., Internal Appeals Process, 60 Fed. Reg. at 16,473.

(211.) Letter from Margaret McCloskey Shanks, Assoc. Sec'y of the Bd., Bd. of Governors of the Fed. Reserve Sys., to author (Aug. 20, 2012) (on file with author).

(212.) Id.

(213.) It is also possible that information on appeals, particularly from the earlier years is incomplete.

(214.) The Federal Reserve listed the reason for the appeal as "[c]omposite/component BHC rating based on OCC subsidiary bank composite/component ratings and violations of law." Letter from Margaret McCloskey Shanks, Assoc. Sec'y of the Bd., Bd. of Governors of the Fed.l Reserve Sys., to author (Aug. 20, 2012) (on file with author).

(215.) Id.

(216.) This appeal is show in the "Other" category in Figure 5.

(217.) Because both the review committee and the President upheld this examiner decision, 1 categorized it as an appeal that upheld the examiner decision for the purpose of Figure 5. Only appeals that were withdrawn before any appeals process decision were included in the "Withdrawn" category for Figure 5.

(218.) 12U.S.C. [section][section] 1811, 1814-15 (2012).

(219.) See supra Parts II.A, II.B (describing the examination authority of the OCC and Federal Reserve); 12 U.S.C. [section] 1820(b)(3) (giving the FDIC examination authority over all insured banks); CARNELL, MACEY & MILLER, supra note 27, at 632 (describing the examination conventions employed by federal regulators).

(220.) FDIC OIG REPORT, supra note 12, at 2.

(221.) Id.

(222.) See Find Banks, FDIC, https://www2.fdic.gov/idasp/main.asp (search with Information as of Dec. 31, 2012 and Federal Regulator as FDIC) (last visited Feb. 25, 2015); Statistics on Depository Institutions, FDIC, http://www2.fdic.gov/sdi/ (last visited Jan. 18, 2013).

(223.) See Find Banks, FDIC, https://www2.fdic.gov/idasp/main.asp (search with Information as of Dec. 31, 2012, Size or Preformance as Total Assets ($) Equal or Less than $1,000,000,000, and Federal Regulator as FDIC) (listing 4152 state-chartered non-member banks with less than $1 billion in assets).

(224.) FDIC, Annual Report 2012, at 133(2013).

(225.) FDIC, Fin. Inst. Letter 11-92, Procedures for Requesting Review of Supervisory Decisions (Feb. 7, 1992), available at 1992 WL 714970.

(226.) Id.

(227.) Id.

(228.) FDIC, Intra-Agency Appellate Process, 60 Fed. Reg. 15,923 (Mar. 28, 1995).

(229.) See FDIC, Intra-Agency Appeal Process, 69 Fed. Reg. 41,479, 41,480 (July 9, 2004) (reducing the Supervisory Appellate Review Committee from five to three members and adjusting the process for triggering review by that Committee); FDIC, Guidelines for Appeals of Material Supervisory Determinations, 73 Fed. Reg. 54,822 (Sept. 23, 2008) ("eliminat[ing] the ability of an FDIC-supervised institution to file an appeal with the [Supervisory Review Committee] with respect to determinations or the facts and circumstances underlying a recommended or pending formal enforcement-related action or decision"); FDIC, Intra-Agency Appeal Process, 75 Fed. Reg. 20,358, 20,359 (Apr. 19, 2010) (extending various deadlines for FDIC decisions on appeals); FDIC, Intra-Agency Appeal Process, 77 Fed. Reg. 17,055, 17,056 (Mar. 23, 2012) (making changes to reflect organizational adjustments necessitated in part by the elimination of the Office of Thrift Supervision). The 2004 process changes suggest that the FDIC also amended the policy in 1999. See FDIC, Intra-Agency Appeal Process, 69 Fed. Reg. 41,479, 41,480 (July 9, 2004) ("The 1995 SARC guidelines were amended in 1999 ... to provide formally that the Directors of DOS and DCA (now the DSC Director) would not vote on cases brought before the SARC involving their respective (now consolidated) divisions...."). However, when 1 made a FOIA request for documents related to a 1999 change, the FDIC responded that it had no responsive documents, explaining that "the FDIC did not publish a 1999 edition of the Guidelines for Appeals of Material Supervisory Determinations." Letter from Jim Braun, Senior FOIA Specialist, FOLA/Privacy Act Group, FDIC, to author (July 9, 2013) (on file with author).

(230.) FDIC, Intra-Agency Appeal Process, 77 Fed. Reg. at 17,057.

(231.) Id. (specifying that appeals should be made to "either the Director, [Division of Depositor and Consumer Protection], Director, [Division of Risk Management Supervision], or Director, [Office of Complex Financial Institutions]"). The Division of Risk Management Supervision has responsibility for safety and soundness examinations as well as trust operations, information technology controls, and Bank Secrecy Act compliance. FDIC OIG REPORT, supra note 12, at 3.The Division of Depositor and Consumer Protection conducts examinations to assess compliance with the Community Reinvestment Act and consumer protection laws. Id. The Office of Complex Financial Institutions is tasked with overseeing the supervisory, insurance, and resolution risks presented to the FDIC by large and complex financial institutions. Id. at 3-4.

(232.) See FDIC, Intra-Agency Appeal Process, 77 Fed. Reg. at 17,057 (additionally requiring a description of "how resolution of the dispute would materially affect the institution, and whether a good-faith effort was made to resolve the dispute with the on-site examiner and the Regional Office").

(233.) Id.

(234.) Div. of Supervision & Consumer Prot., FDIC, Guidelines for Processing Requests for Review of Material Supervisory Determinations (2004), http://www.fdic.gov/regulations/laws/sarc/dscguidelines.html, archived at https://perma.cc/CUP4-2RKG [hereinafter FDIC DSC Guidelines], Although the name of the division has changed and the FDIC's appeals guidelines have been updated since 2004, see supra note 229, it does not appear that the Division has updated its process guidelines.

(235.) FDIC DSC Guidelines, supra note 234. If the subject matter of the appeal was the "joint product" of the FDIC and a state regulator, the FDIC must notify the state regulator of the appeal and provide that regulator with an opportunity to comment on it. FDIC, Intra-Agency Appeal Process, 77 Fed. Reg. at 17,058.

(236.) FDIC DSC Guidelines, supra note 234.

(237.) FDIC, Intra-Agency Appeal Process, 77 Fed. Reg. at 17,057.

(238.) Id. at 17,056.

(239.) Id.

(240.) Letter from Jim Braun, Senior FOIA Specialist, FOIA/Privacy Act Group, FDIC, to author (July 15, 2013) (on file with author).

(241.) Id.

(242.) FDIC, Intra-Agency Appeal Process, 77 Fed. Reg. at 17,058.

(243.) See id. ("Evidence not presented for review to the Division or Office Director may be submitted to the [Committee] only if authorized by the [Committee] Chairperson.").

(244.) Id.

(245.) Id.

(246.) Id. at 17,057. Banks may also appeal IT ratings, CRA ratings, consumer compliance ratings, trust ratings, securities dealer examination ratings, findings of statutory or regulatory violations, Truth in Lending Act restitution, and "[a]ny other supervisory determination ... that may affect the capital, earnings, operating flexibility, or capital category for prompt corrective action purposes of an institution, or otherwise affect the nature and level of supervisory oversight accorded an institution." Id.

(247.) Id.

(248.) Id. at 17,058.

(249.) Id.

(250.) Hearing on H.R. 3461, supra note 5, at 145 (written testimony of Sandra L. Thompson, Director, FDIC Division of Risk Management Supervision).

(251.) FDIC, Intra-Agency Appeal Process, 77 Fed. Reg. at 17,058.

(252.) Id.

(253.) Id

(254.) Id.

(255.) See id. (noting that the appeals decisions can be cited as precedent). For a listing of these appeals, see Supervision Appeals Review Committee--Decisions, FDIC, http://www.fdic.gov/ regulations/laws/sarc/sarcappeals.html, archived at http://perma.cc/ZNA5-PUEV (last updated Apr. 16, 2014).

(256.) FDIC, Intra-Agency Appeal Process, 77 Fed. Reg. at 17,058. See, e.g., Material Supervisory Determination Decision of May 2, 2008, SARC-2007-04 (FDIC May 2, 2008), available at https://www.fdic.gov/regulations/laws/sarc/sarcappeals/sarc200704.html, archived at https://perma.ee/ NP6C-9KS6.

(257.) FDIC, Intra-Agency Appeal Process, 77 Fed. Reg. at 17,059.

(258.) Id.

(259.) Id.

(260.) See supra note 231 and accompanying text.

(261.) See supra notes 238-41 and accompanying text.

(262.) Initially, the FDIC denied my request asserting the information was protected bank examination material under 5 U.S.C. [section] 552(b)(8). Letter from Jim Braun, Senior FOIA Specialist, FOIA/Privacy Act Group, FDIC, to author (June 18, 2013) (on file with author). I appealed the denial to the FDIC's General Counsel. Letter from author to Richard J. Osterman, Jr., Acting Gen. Counsel, FDIC (June 19, 2013) (on file with author). The FDIC then agreed to provide the summary information. Letter from Barbara Sarshik, Senior Counsel, FDIC, to author (July 30, 2013) (on file with author). The initial table provided by the FDIC omitted Committee information for some appeals. Id. A further FOIA request yielded the missing information. Letter from Jim Braun, Senior FOIA Specialist, FOIA/Privacy Act Group, FDIC, to author (Oct. 10, 2013) (on file with author).

(263.) Appeals to the Supervision Appeals Review Committee are summarized in Figure 8.

(264.) Record making and keeping during the pre-2005 time period may have been lacking. Cf. FDIC, Intra-Agency Appeal Process, 69 Fed. Reg. 41,479, 41,481 (July 9, 2004) (noting a financial institution's complaint that it had never been "informed of [the Director's] denial of its request for review or that the request has been passed to the SARC").

(265.) In three instances, I still could not reconcile the FOIA data with the FDIC's Supervision Appeals Review Committee decisions webpage. One webpage Committee decision did not appear on the FOIA list. Material Suprevisory Determination Decision of Sept. 7, 2010, SARC-2010-04 (FDIC Sept. 7, 2010), available at http://www.fdic.gov/regulations/laws/sarc/sarcappeals/sarc201004.pdf, archived at http://perma.cc/ZNA5-PUEV (appeal of rate restrictions under 12 C.F.R. [section] 337.6). Two Committee appeals on the FOIA list did not appear as decisions on the FDIC's webpage. One was a March 24, 2005 appeal of a "[c]omposite rating; capital, management, earning, and liquidity component ratings" that was reportedly denied by the Committee. Letter from Jim Braun, Senior FOIA Specialist, FOIA/Privacy Act Group, FDIC, to author (Oct. 10, 2013) (on file with author). The other was a February 1, 2005 appeal of a "[c]onsumer compliance rating" that was reportedly denied by the Committee. Id.

(266.) Supervision Appeals Review Committee--Decisions, FDIC, http://www.fdic.gov/regulations/ laws/sarc/sarcappeals.html, archived at http://perma.cc/ZNA5-PUEV (last updated Apr. 16, 2014).

(267.) FDIC, Intra-Agency Appellate Process, 60 Fed. Reg. 15,923, 15,930 (Mar. 28, 1995).

(268.) FDIC, Intra-Agency Appeal Process, 69 Fed. Reg. at 41,481.

(269.) Data for this figure were compiled from the FOIA-provided summary of Director-level appeals. Letter from Jim Braun, Senior FOIA Specialist, FOIA/Privacy Act Group, FDIC, to author (Oct. 10, 2013) (on file with author). As such, it contains the issues as characterized by the FDIC. I attempted to reconcile the FOIA information with the Supervision Appeals Review Committee Decisions. See Supervision Appeals Review Committee--Decisions, FDIC, http://www.fdic.gov/ regulations/laws/sarc/sarcappeals.html, archived at http://perma.cc/ZNA5-PUEV (last updated Apr. 16, 2014). In cases where the Director decision was appealed to the Committee, the FDIC's description of the issued appealed was generally accurate.

(270.) I collected the data reporte in this paragraph from the FDIC web page. See Supervision Appeals Review Committee--Decisions, supra note 269.

(271.) Data for this figure were compiled from both the data received through FOIA and the publicly available appeals decisions. See Letter from Jim Braun, Senior FOIA Specialist, FOIA/Privacy Act Group, FDIC, to author (Oct. 10, 2013) (on file with author); Supervision Appeals Review Committee--Decisions, FDIC, http://www.fdic.gov/regulations/laws/sarc/sarcappeals.html, archived at http://perma.cc/ZNA5-PUEV (last updated Apr. 16, 2014). Figure 10 shows the ultimate outcome whether reached at the Director level or at the Supervision Appeals Review Committee Level. For this reason, it contains data on 2 more appeals than the data in Figures 8 and 9. See supra note 265 (describing minor data inconsistencies). For those curious about just those appeals before the Supervision Appeals Review Committee (1995-2012): 58 upheld the examiner determination, 4 reversed the examiner determination, and 1 was a mixed decision.

(272.) It is unclear whether this same pattern holds for pre-2005 appeals. Of the Supervision Appeals Review Committee decisions issued before 2005, 39 upheld the examiner determination, 4 reversed the examiner determination, and 4 were mixed decisions. On the other hand, the likely incomplete FOIA list of appeals, see supra note 264 and accompanying text, show 5 appeals upholding the examiner, 8 reversing the examiner, 6 mixed decisions, and 2 withdrawn appeals.

(273.) In one of those cases, the regional office reconsidered and upgraded the appealed management rating before the Director decided the appeal. The other bank win was issued at the Director-level.

(274.) One mixed decision was issued at the Director-level. The other 2 were issued by the Supervision Appeals Review Committee.

(275.) The outcomes of 3 appeals were categorized as "other" because the bank was closed or its deposit insurance was terminated. The final "other" appeal was "Returned/PCA notice rescinded."

(276.) 12 U.S.C. [section] 1756(2012).

(277.) Id. [section][section] 1782, 1784. Credit union deposits can be insured by the National Credit Union Share Insurance Fund, an insurance fund operated by the federal government that is similar to the FDIC's insurance fund for banks. Id. [section] 1783. Both federally-chartered and state-chartered credit unions are eligible for this federal insurance, and most elect its coverage. See id. [section] 1781(a); The State of the Credit Union Industry: Hearing Before the S. Comm, on Banking, Hous. & Urban Affairs, 111th Cong. 15 (2010) (written statement of Deborah Matz, Chairman, NCUA).

(278.) 12 U.S.C. [section] 1759 (2012) (describing membership in federal credit unions); id. [section] 1752(6) (describing "State-chartered credit union" as "a credit union organized and operated according to the laws of any State, the District of Columbia, the several territories and possessions of the United States, the Panama Canal Zone, or the Commonwealth of Puerto Rico, which laws provide for the organization of credit unions similar in principle and objectives to Federal credit unions").

(279.) Id. [section] 1757(a).

(280.) 26 U.S.C. [section] 501(c)(14)(A) (2012) (providing that credit unions, as non-profit, mutual organizations, are exempt from federal income tax).

(281.) Timothy W. Koch & S. Scott MacDonald, Bank Management 40M1 (7th ed. 2010).

(282.) See supra notes 20-24 and accompanying text.

(283.) 12 U.S.C. [section] 4806(a) (2012).

(284.) NCUA, Financial Trends in Federally Insured Credit Unions: December 31, 2012, available at http://www.ncua.gov/Legal/Documents/Reports/FT20121231.pclf, archived at http://perma. CC/M3S5-ALWQ.

(285.) NCUA, 2012 Annual Report 12 (2013).

(286.) NCUA, Guidelines for the Supervisory Review Committee, 60 Fed. Reg. 14,795 (Mar. 20, 1995) (also known as NCUA Interpretive Ruling and Policy Statement 95-1).

(287.) In 2001, the NCUA adopted a program known as RegFlex that allowed strong credit unions exemptions from some regulatory requirements. The NCUA subsequently amended the appeals process to allow credit unions to appeal the NCUA's determination as to whether the credit union qualified for RegFlex. See NCUA, Guidelines for the Supervisory Review Committee, 67 Fed. Reg. 19,778 (Apr. 23, 2002) (also known as NCUA Interpretive Ruling and Policy Statement 02-1); NCUA, Guidelines for the Supervisory Review Committee, 76 Fed. Reg. 3,674 (Jan. 20, 2011); NCUA, Guidelines for the Supervisory Review Committee, 76 Fed. Reg. 23,871 (Apr. 29, 2011) (combining two previous sets of guidelines). Later, the NCUA abandoned the RegFlex program and accordingly adjusted the list of appealable issues. NCUA, Guidelines for the Supervisory Review Committee, 77 Fed. Reg. 32,004 (May 31, 2012). The current guidelines, as amended, are available in an NCUA Interpretive Ruling and Policy Statement. NCUA, IRPS 11-1 (AS AMENDED BY 1 RPS 12-1), Supervisory Review Committee (2012), available at http://www.ncua.gov/Legal/Documents/ IRPS/IRPS2011-1.pdf, archived at http://perma.cc/BMZ8-MEAX [hereinafter NCUA IRPS 11-1],

(288.) See id. at 1.

(289.) Id.

(290.) Id. at 2. As explained earlier, the NCUA only conducts on-site examinations of those state-chartered credit unions that pose greater risk to the share insurance fund. See supra note 19.

(291.) NCUA IRPS 11-1, supra note 287, at 2. This situation would most likely arise when the state credit union regulator conducted the examination that led to the appeal. See Lee Interview, supra note 13.

(292.) See NCUA IRPS 11-1, supra note 287, at 1 .Corporate credit unions "must contact the Office of Corporate Credit Unions," the subdivision of the NCUA that oversees their examination and enforcement. Id. at 2. Current chair of the NCUA's Supervisory Review Committee, Joy K. Lee, notes that before raising the issue with the regional director, a credit union should have already raised the issue with the examiner, the supervisory examiner, and the associate regional director. Lee Interview, supra note 13.

(293.) See NCUA IRPS 11-1, supra note 287, at 2.

(294.) Lee Interview, supra note 13.

(295.) NCUA IRPS 11-1, supra note 287, at 2.

(296.) Id.

(297.) Id.

(298.) Lee Interview, supra note 13.

(299.) NCUA IRPS 11-1, supra note 287, at 2.

(300.) Lee Interview, supra note 13.

(301.) Id.

(302.) NCUA IRPS 11-1, supra note 287, at 1.

(303.) Id. (stating that no members of the Committee "shall be currently serving as a Regional Director, Associate Regional Director, Executive Director, Director of the Office of Small Credit Union Initiatives, or Senior Policy Advisor of Chief of Staff to a Board Member").

(304.) See id.

(305.) See Sara Snell Cooke, Editor's Column, The Absence of Light Causes Darkness, CREDIT Union Times, Nov. 7, 2012, at 4 (stating that when the Credit Union Times reported the name of the Chairman of the Supervisory Review Committee, the NCUA asked the Credit Union Times to remove the information from the Internet).

(306.) NCUA, Guidelines for the Supervisory Review Committee, 76 Fed. Reg. 23,871, 23,872 (Apr. 29, 2011).

(307.) Supervisory Review Committee, NCUA, http://www.ncua.gov/Resources/CUs/Pages/ SRC.aspx (last visited Mar. 2, 2014) (listing Joy K. Lee, Special Assistant to the Executive Director, Gerard Poliquin, Secretary of the Board, and Judy Graham, Program Officer, as members of the Committee).

(308.) Attorneys who have served on the Committee include: John Ianno (Trial Attorney, 1995), Sheila Albin (Assoc. Gen. Counsel, 1996-97), Hattie M. Ulan (Special Counsel to the Gen. Counsel, 1998-2000), Chrisanthy Loizos (EEO Counselor, 2003-05), Regina Metz (Staff Attorney, 2006-07), Linda Dent (Staff Attorney, 2008), Ross Kendall (Trial Attorney, 2009-10, 2012-2013), and Gerard Poliquin (Sr. Trial Attorney, 2011). Letter from Regina Metz, Staff Attorney, NCUA, to author (Mar. 22, 2013) (on file with author) (responding to a FOIA request for members and titles for the NCUA Supervisory Review Committee). None of the attorneys has served as chair of the Committee. Id.

(309.) See id.

(310.) NCUA IRPS 11-1, supra note 287, at 1.

(311.) Id.

(312.) Lee Interview, supra note 13.

(313.) NCUA IRPS 11-1, supra note 287, at 1 (emphasis added); Lee Interview, supra note 13 (noting that appealing credit unions can "determine if they feel like it's a material size loan or not").

(314.) According to Supervisory Review Committee Chair Lee, there is "really no connection" between enforcement actions and the right to appeal an MSD. Lee Interview, supra note 13. "Anybody can [appeal], it doesn't matter if you have a regional director letter, a preliminary warning letter, a letter of understanding and agreement, or cease-and-desist." Id.

(315.) NCUA IRPS 11-1, supra note 287, at 2.

(316.) According to Supervisory Review Committee Chair Lee, if the Committee during the appeals process found a significant error, the NCUA would have to revisit the need for the enforcement action, but termination of the enforcement action would not be "automatic." Lee Interview, supra note 13 (noting that this circumstance has not yet arisen at the NCUA).

(317.) Id. (describing circumstances where the Committee Chair spoke with an examiner, a supervisory examiner, a chief accountant, and a record keeping specialist).

(318.) Id.

(319.) NCUA IRPS 11-1, supra note 287, at 2 (allowing the "personal appearance" to be held "through teleconference").

(320.) See Lee Interview, supra note 13.

(321.) See id.

(322.) See id.

(323.) Id. (stating that the Committee generally asks "very limited questions").

(324.) Id. (explaining that the meeting might be immediately after the appearance or on a later date, depending on the length of the appearance).

(325.) Id.

(326.) Id.

(327.) Id.

(328.) NCUA IRPS 11-1, supra note 287, at 2 (noting that the 30-day timeframe is "subject to adjustment by the Committee, whether on its own or upon request of the appellant or the Region or other office involved").

(329.) Lee Interview, supra note 13.

(330.) In cases where the appeal receives media attention, the decision is circulated to the NCUA's public and congressional affairs staff as well as the NCUA Chairman. Id.

(331.) The NCUA released redacted decisions in response to my FOIA request. Letter from Regina Metz, Staff Attorney, NCUA, to author (Sept. 19, 2012). This is the only time decisions have been released. See Lee Interview, supra note 13 (noting that redacted opinions had been released in response to a single FOIA request).

(332.) NCUA IRPS 11-1, supra note 287, at 3 (allowing credit unions thirty days to appeal to the Board).

(333.) Id.

(334.) Id.

(335.) Id.

(336.) Mary Dunn, NCUA Responding to CU Exam Issues, CREDIT UNION MAG., June 2012, at 58 (noting that a credit union trade group had received a letter from the NCUA stating that "as a result of your input, we will add specific language on the exam report cover page to emphasize NCUA's nonretaliation policy").

(337.) NCUA OIG Report, supra note 12, at 25.

(338.) See Letter from Regina Metz, Staff Attorney, NCUA, to author (Sept. 19, 2012) (on file with author); Letter from Regina Metz, Staff Attorney, NCUA, to author (July 19, 2013) (on file with author).

(339.) As previously explained, the NCUA describes the first stage of its review process as "contact with the regional office" rather than as an appeal. See supra note 292-294 and accompanying text. Consequently, I have used the "contact" language throughout this section when describing appeals to Regional Offices.

(340.) Letter from Regina Metz, Staff Attorney, NCUA, to author (Sept. 16, 2013) (on file with author).

(341.) Id

(342.) Id.

(343.) See Letter from Regina Metz, Staff Attorney, NCUA, to author (Sept. 19, 2012) (on file with author); Letter from Regina Metz, Staff Attorney, NCUA, to author (July 19, 2013) (on file with author); Letter from Regina Metz, Staff Attorney, NCUA, to author (Sept. 16, 2013) (on file with author).

(344.) Additionally, 2 Supervisory Review Committee decisions (years 2008 and 2012) do not seem to appear on the NCUA's list of regional office contacts. Perhaps these credit unions simply did not approach the regional office, see supra notes 292-94 and accompanying text, or perhaps this information was missing from the information provided.

(345.) Lee Interview, supra note 13 (noting the financial crisis had increased appeals and that credit unions tended to "lag behind the banks in terms of financial crisis").

(346.) See id.; Ulan Interview, supra note 13. See also Letter from Debbie Matz, Chairman, NCUA, to Federally Insured Credit Unions (Jan. 2013), available at http://www.ncua.gov/Resources/ Documents/LCU2013-01.pdf, archived at http://perma.cc/Z3WJ-SH82 (NCUA Letter 13-CU-01) (noting that "information on all formal and informal appeal options available to credit unions is now included in the exam report cover letter").

(347.) See supra note 284.

(348.) See supra note 19.

(349.) Letter from Debbie Matz, Chairman, NCUA, to Federally Insured State Credit Unions (Aug. 2011), available at http://www.ncua.gov/Resources/Pages/LCU2011-12.aspx (NCUA Letter 11-CU12).

(350.) Data for this figure were compiled from NCUA-provided summaries of regional office contacts. As such, it contains the issues as characterized by the NCUA.

(351.) NCUA, Examiner's Guide 20-4 (2004), available at http://www.ncua.gov/Legal/ GuidesEtc/ExaminerGuide/chapter20.pdf, archived at http://perma.cc/2H4W-97EG (describing documents of resolution).

(352.) See Letter from Regina Metz, Staff Attorney, NCUA, to author (Sept. 16, 2013) (on file with author).

(353.) See Letter from Regina Metz, Staff Attorney, NCUA, to author (Sept. 19, 2012) (on file with author); Letter from Regina Metz, Staff Attorney, NCUA, to author (July 19, 2013) (on file with author); In most cases, the NCUA redacted the numerical ratings (1-5) that the credit union received from the appeals decision before releasing the Supervisory Review Committee decision through FOIA.

(354.) On that issue, the Committee concluded that "the Region's material supervisory determination was based upon objective criteria." Thus, the complaint of retaliation was "not within the purview of the [Committee]." Id.

(355.) For example, the press widely reported that Commodore Perry Federal Credit Union brought an appeal alleging that "its examiner retaliated by reporting inaccurate exam findings because management complained to the NCUA that he sexually harassed and bullied [Credit Union] employees." See, e.g., Heather Anderson, Ohio CU's Appeal, Credit UNION Times, Oct. 31, 2012, at 1,20. The redacted Committee decisions from this time period do not discuss any retaliation issues. Of course, it is also possible that the press reports simply do not match the information contained in the credit union's appeal.

(356.) This graph shows outcomes of all uses of the appeals process whether the appeal concluded at the Regional Office contact or the Supervisory Review Committee. The number of total appeals here is two more than the total regional office contacts because the FOIA data on Regional Office contacts seems to be missing two appeals that were handled by the Supervisory Review Committee. See supra note 344 (describing my reconciliation of the data). It is possible that some negative outcomes of Regional Office office contacts were appealed the Supervisory Review Committee. If the Committee issued a decision after the close of 2013, the final outcome of the appeals process would not be captured in Figure 13. Thus, Figure 13 might understate the success rate for appeals. Complete Supervisory Review Committee data are not available for 2013. Preliminary information shows that the Committee issued at least 3 decisions in 2013. These decisions involved appeals of CAMEL composite and component ratings and resulted in decisions upholding the initial examiner decision. Thus, to the extent that Figure 13 might understate the rate of success, the discrepancy is likely slight.

(357.) Outcome data for regional office contacts were compiled from the FOIA-provided summary of regional office contacts. See supra note 339-340 and accompanying text (describing these data). "Amended" refers to those instances where the appeals process reversed the examiner decision in whole or in part. As such, it is the combination of the "reversed" and "mixed" data categories reported for OCC, Federal Reserve, and FDIC appeals. See supra Figures 3, 6, 10. The "Other" category consists of contacts that the NCUA described as "resolved" (1), "reevaluated" (1), "addressed" (11), "explained" (2), and "updated" (2).

(358.) See Heather Anderson, Commodore Stops Appeal, CREDIT UNION TIMES, Apr. 3, 2013, at 1, 23 (noting that a credit union had filed, but then withdrawn a Board-level appeal); Lee Interview, supra note 13 (stating the Board had never decided an appeal).

(359.) Congress created the Federal Financial Institutions Examination Council in 1979 to "prescribe uniform principles and standards for the Federal examination of financial institutions ... and make recommendations to promote uniformity in the supervision of these financial institutions." 12 U.S.C. [section] 3301 (2012). Working together as part of the Examination Council, officials from each regulator developed the CAMELS system. See supra notes 20-24 and accompanying text. To ensure that the CAMELS system is consistently implemented across each of the federal regulators, the Examination Council "conduct[s] schools for examiners and assistant examiners." 12 U.S.C. [section] 3305(d) (2012).

(360.) 12 U.S.C. [section] 4806(f)(l)(A)(i) (2012).

(361.) The OCC policy allows appeal of "[e]xamination ratings." OCC Bulletin 2013-15, supra note 10. The Federal Reserve policy defines "material supervisory determination" to include "examination or inspection composite ratings," Fed. Reserve Sys., Internal Appeals Process, 60 Fed. Reg. 16,470, 16,473 (Mar. 30, 1995), and the information provided shows appeals for CAMELS composite and component ratings. The FDIC policy allows appeals of CAMELS ratings, IT ratings, trust ratings, CRA ratings, and consumer compliance ratings. FDIC, Intra-Agency Appeal Process, 77 Fed. Reg. 17,055, 17,057 (Mar. 23,2012).

(362.) NCUA IRPS 11-1, supra note 287, at 3.

(363.) Lee Interview, supra note 13.

(364.) See, e.g., Material Supervisory Determination of First Quarter 2006, OCC Q.J., Mar. 2006, at 37 (2006) (appeal of composite and component rating); FDIC, Appeal of Material Supervisory Determination: Guidelines & Decisions, SARC-2004-02 (FDIC Apr. 12, 2004) (appeal of CAMELS compenent ratings for asset quality and management), available at http://www.fdic.gov/regulations/ laws/sarc/sarcappeals/sarc200402.html, archived at http://perma.cc/H4HA-3XCV (appeal of CAMELS component ratings for asset quality and management). Although the Federal Reserve's guidelines are worded broadly enough to allow appeals from institutions with a 1 or 2 composite rating, the data gathered through FOIA are insufficient to confirm that the Federal Reserve has actually considered appeals from such institutions.

(365.) 12 U.S.C. [section] 4806(f)(1)(B) (2012).

(366.) Id [section] 4806(g).

(367.) OCC Bulletin 2013-15, supra note 10. Earlier OCC policies did not allow banks to use the MSD appeals process to challenge examiner findings that the bank did not comply with an enforcement action. See Material Supervisory Determination Decision of Second Quarter 2012, http://www.occ.gov/topics/dispute-resolution/bank-appeals/summaries/appeal-composite-component-ratings-q2-2012.html, archived at http://perma.cc/4X8A-ZR4W (appeal of composite and component ratings and violations of law).

(368.) See supra note 102 and accompanying text. Under the OCC's initial MSD appeals procedures, banks had more leeway to appeal MSDs underlying enforcement actions. See Golden Interview, supra note 13; Hearing on HR. 3461, supra note 5, at 53 (testimony of Eugene A. Ludwig, Founder & CEO, Promontory Financial Group, LLC).

(369.) OCC BULLETIN 2013 15, supra note 10, at n.i.

(370.) Fed. Reserve Sys., Internal Appeals Process, 60 Fed. Reg. 16,470, 16.473 (Mar. 30, 1995).

(371.) FDIC, Intra-Agency Appeal Process, 77 Fed. Reg. 17,055, 17,057 (Mar. 23, 2012). Earlier FDIC policies were not so restrictive. Id. at 17,056 (noting the FDIC policy was amended in 2008 "to modify the supervisory determinations eligible for appeal to eliminate the ability of an FDIC-supervised institution to file an appeal with the SARC for determinations, or the facts and circumstances underlying a recommended or pending formal enforcement-related action or decision, and to make limited technical amendments").

(372.) Id. at 17,057.

(373.) NCUA IRPS, supra note 287, at 3.

(374.) See supra notes 314-16 and accompanying text.

(375.) See Black's Law Dictionary 1535 (9th ed. 2009) ("The criterion by which an appellate court exercising appellate jurisdiction measures the constitutionality of a statute or the propriety of an order, finding, or judgment entered by a lower court.").

(376.) See Amanda Peters, The Meaning, Measure, and Misuse of Standards of Review, 13 LEWIS & Clark L. Rev. 233, 243-46 (2009) (explaining that in "de novo" review the appellate body simply reviews the issue anew while in "abuse of discretion" review the appellate body uses a much higher threshold, such as whether the initial decision was "outside the scope of the applicable law").

(377.) Dickinson v. Zurko, 527 U.S. 150, 162 (1999) ("The upshot in terms of judicial review is some practical difference in outcome depending upon which standard is used."). But see, e.g., David Zaring, Reasonable Agencies, 96 Va. L. Rev. 135, 135 (2010) (concluding that "regardless of the standard of review, courts affirm agencies' actions slightly more than two thirds of the time").

(378.) See generally 12 U.S.C. [section] 4806 (2012).

(379.) OCC Bulletin 2013-15, supra note 10.

(380.) See supra notes 114-16 and accompanying text.

(381.) See supra notes 112-13 and accompanying text.

(382.) Fed. Reserve Sys., Internal Appeals Process, 60 Fed. Reg. 16,470, 16,472 (Mar. 30, 1995).

(383.) See supra notes 184-91 and accompanying text.

(384.) FDIC, Intra-Agency Appeal Process, 77 Fed. Reg. 17,055, 17,058 (Mar. 23, 2012).

(385.) See supra notes 325-26 and accompanying text.

(386.) The number of appeals at the FDIC and NCUA is somewhat larger if you consider appeals to or contacts with officials housed within the regulators' examination functions (Director or Regional Office appeals). See supra Figures 8, 11. But even considering these early-stage appeals, utilization of the MSD appeals processes seems low.

(387.) Heather Anderson, Marquis: Lack of Appeals a Sign the Exam System Is Working, CREDIT UNION Times, July 6, 2012, available at 2012 WLNR 14198420 ("The fact that only four credit unions have elevated an exam appeal to the NCUA's supervisory review committee in the past 10 years is a sign the exam system is working, [NCUA] Executive Director David Marquis told Credit Union Times.").

(388.) Am. Bankers Ass'n & State Bankers Ass'ns, Summary Report from Banks Supervised by the Office of the Comptroller of the Currency 5 (2012), available at http://www.aba.cora/aba/documents/news/ReportforOCCMarch2012.pdf, archived at http://perma.cc/ BP5Q-SQRB (N=203, 10% very dissatisfied, 23% dissatisfied, 17% neutral, 32% satisfied, 18% very satisfied); am. Bankers Ass'n & State Bankers Ass'ns, Summary Report for the Federal Reserve 5 (2012), available at http://www.aba.com/aba/documents/news/ReportforFedMarch2012.pdf, archived at http://perma.cc/U436-9H84 (N=133, 15% very dissatisfied, 20% dissatisfied, 17% neutral, 26% satisfied, 21% very satisfied); Am. Bankers Ass'n & State Bankers Ass'ns, Summary Report for Banks Examined by the Federal Deposit Insurance Corporation 5 (2012), available at http://www.aba.com/aba/documents/news/ReportforFDICApril2012.pdf, archived at http://perma.cc/2JUH-BD4F (N=397, 13% very dissatisfied, 21% dissatisfied, 17% neutral, 31% satisfied, 17% very satisfied). See also Joe Adler, Banker-Examiner Relationship, Once Testy, Thaws, Am. BANKER, June 11, 2012, available at 2012 WLNR 12040228 (reporting on the survey).

(389.) Adler, supra note 388.

(390.) Hearing on H.R. 3461, supra note 5, at 150 (written statement of Ken Watts, President & CEO, West Virginia Credit Union League) (citing a Credit Union National Association survey).

(391.) Id.

(392.) Id. Additionally, "[o]ver one-third of credit unions who had examination concerns did not appeal because they were not aware of the process." Id.

(393.) Credit Union Nat'l Ass'n, 2012 Credit Union Exams Survey (on file with author) (N=1531, 10% very dissatisfied, 15% somewhat dissatisfied, 15% neutral, 39% satisfied, 21% very satisfied).

(394.) Id. (N=1531, 8% very dissatisfied, 14% somewhat dissatisfied, 17% neutral, 39% satisfied, 23% very satisfied).

(395.) An FDIC spokesman stated that the Alliance of Bankers Associations survey "has inherent limitations based on geography, sample size and other methodological issues." Adler, supra note 388.

(396.) S. Rep. No. 103-169, at 51 (1993), reprinted in 1994 U.S.C.C.A.N. 1881, 1935.

(397.) Cf. Patricia M. Wald, The Rhetoric of Results and the Results of Rhetoric: Judicial Writings, 62 U. CHI. L. Rev. 1371, 1372 (1995) (asserting that written judicial opinions are a device to "impose consistency and correct the judges who 'err'"). Perhaps some regulatory consistency could be achieved by circulating decisions within an agency and sharing decisions across agencies. However, there is little evidence that regulators do this.

(398.) Transparency and Open Government, 74 Fed. Reg. 4685 (Jan. 21, 2009) (Memorandum from Barack Obama, President of the United States, to Heads of Executive Departments and Agencies).

(399.) See supra notes 133-35,255-56, 266 and accompanying text.

(400.) See supra note 211 and accompanying text.

(401.) See supra notes 338-10 and accompanying text.

(402.) For example, an NCUA decision obtained through FOIA contained a paragraph that began: "According to the NCUA's LCU No. 07-CU-12, CAMEL [redacted] credit unions." The remainder of the paragraph likely contained the NCUA's standard for a 3, 4, or 5 rated credit union. However, the remainder was entirely redacted.

(403.) See supra notes 80-82, 231, 292-94 and accompanying text.

(404.) Of course, Congress could also choose to impose these requirements.

(405.) OCC BULLETIN 2013-15, supra note 10.

(406.) See supra note 403.

(407.) See supra notes 169-70 and accompanying text.

(408.) See supra notes 133-34, 255 and accompanying text (explaining the OCC's practice of releasing summary decisions and the FDIC's practice of releasing redacted decisions).

(409.) OCC Bulletin 2013-15, supra note 10.

(410.) See Hattix Interview, supra note 13.

(411.) See supra Part 111. A. 1 .a.

(412.) NCUA IRPS 11-1, supra note 287, at 1.

(413.) Ulan Interview, supra note 13 (stating that "in practical terms, it doesn't matter whether [a credit union is rated] a 1 or a 2").

(414.) See supra note 364.

(415.) See supra Part III.A.1.b.

(416.) Rives, supra note 29. See also 12 U.S.C. [section] 1818(b)(8) (2012) (allowing regulators to impose formal enforcement when an institution receives "a less-than-satisfactory rating for asset quality, management, earnings, or liquidity").

(417.) See 12 U.S.C. [section] 1818(b), 1831o (2012).

(418.) See supra note 43.

(419.) Hill, supra note 29, at 662-63 (explaining that "regulators acknowledge that they have informal regulatory powers" to convince banks to willingly enter informal enforcement actions like board resolutions, commitment letters, safety and soundness plans, and memoranda of understanding).

(420.) See id. at 675 (finding that 90% of formal capital enforcement actions between 1993 and 2010 were entered with the consent of the bank).

(421.) Ludwig, supra note 48, at 9 ("If the ombudsman cannot delve into enforcement matters, he or she is precluded from getting into a whole variety of issues that could involve mistakes. Furthermore, matters involving enforcement actions typically are of great importance to the regulated financial institution. A second pair of eyes in such important cases not only avoids unnecessary harm but also enhances the agency's stature as a place of probity and fairness.").

(422.) I propose that the review of these enforcement actions happen at the highest level within the regulator: the Comptroller of the Currency, the Federal Reserve Board, the FDIC Board of Directors, and the NCUA Board of Directors.

(423.) The financial institution's board of directors should vote to approve the institution's withdrawal from the enforcement action.

(424.) See 12 U.S.C. [section][section] 1818(c), 1786(0 (2012).

(425.) FDIC, Intra-Agency Appellate Process, 60 Fed. Reg. 15,923, 15,926 (Mar. 28, 1995) (rejecting suggestion that "decisions to initiate informal enforcement actions ... be appealable" because of "the possible abuse of the appeals process to delay or otherwise impede well-founded enforcement actions").

(426.) See supra notes 368, 371.

(427.) FDIC, Guidelines for Appeals of Material Supervisory Determinations, 73 Fed. Reg. 54,822, 54,824 (Sept. 23, 2008) ("All FDIC formal enforcement actions are reviewed by a number of high-level FDIC officials both prior and subsequent to their initiation.").

(428.) Hill, supra note 29, at 705.

(429.) FDIC, Guidelines for Appeals of Material Supervisory Determinations, 73 Fed. Reg. at 54,824.

(430.) Examining the Settlement Practices of U.S. Financial Regulators: Hearing Before the H. Comm. on Fin. Servs., 112th Cong. 115-16(2012) [hereinafter Settlement Practices Hearing] (written statement of Daniel P. Stipano, Deputy Chief Counsel, OCC) (explaining that enforcement actions are generally approved by one of several supervision review committees).

(431.) Letter from Ben S. Bernanke, Chairman, Board of Governors of the Federal Reserve System, to Senator Elizabeth Warren & Representative Elijah E. Cummings (Dec. 16, 2013), available at http://democrats.oversight.house.gov/sites/democrats.oversight.house.gov/files/migrated/ uploads/12%2016%2013%20Reply%20to%20Cummings%20%20Warren%201.pdf (stating that, of the "nearly 1,000 formal, public enforcement actions the Federal Reserve has taken over the past 10 years," only eleven were contested and therefore approved by the Federal Reserve Board).

(432.) Fed. Reserve Sys., Internal Appeals Process, 60 Fed. Reg. 16,470, 16,472 (Mar. 30, 1995) (rejecting a suggestion to allow appeals of some enforcement-related items because an existing "alterative [sic] appeals mechanism" allowed banks to "contest enforcement actions"); FDIC, Guidelines for Appeals of Material Supervisory Determinations, 73 Fed. Reg. at 54,823 ("[T]he administrative hearing process and the right to court review of final enforcement orders have uniformly been found to provide all required due process.").

(433.) See generally 12 U.S.C. [section][section] 1818(h), 1786 (2012). Financial institutions cannot bypass the administrative law judge review. Judicial review is available only after an administrative law judge decision. Id.

(434.) Settlement Practices Hearing, supra note 430, at 117 (written statement of Daniel P. Stipano, Deputy Chief Counsel, OCC).

(435.) Id.

(436.) See supra note 19 and accompany text (explaining that regulators generally conduct yearly examination).

(437.) One hint that not all institutions who enter into enforcement action by consent agree with their regulators: these enforcement actions almost never contain admissions that the institution violated law, policy, or agency guidance. See Settlement Practices Hearing, supra note 430, at 7, 10, 12 (statements of Scott G. Alvarez, Gen. Counsel, Bd. of Governors of the Fed. Reserve Sys.; Richard J. Osterman, Jr., Deputy Gen. Counsel, FDIC; and Daniel P. Stipano, Deputy Chief Counsel, OCC).

(438.) See supra notes 89, 320 and accompanying text.

(439.) See OCC OIG Report, supra note 12, at 10; Federal Reserve OIG Report, supra note 12, at 22; FDIC OIG Report, supra note 12, at 33; NCUA OIG Report, supra note 12, at 24.

(440.) See supra Figures 2, 5, 9.

(441.) FDIC, Guidelines for Appeals of Material Supervisory Determinations, 73 Fed. Reg. 54,822, 54,823 (Sept. 23, 2008) ("The commenters uniformly expressed support for an independent review of underlying facts, circumstances, and determinations, and that there needs to be 'an effective and non-biased appeals procedure for banks.'").

(442.) See OCC Bulletin 2013--15, supra note 10; FRB Kansas City Appeals, supra note 163, at 6; FRB Minneapolis Appeals, supra note 163, at 4; FDIC, Intra-Agency Appeal Process, 77 Fed. Reg. 17,055, 17,058 (Mar. 23, 2012).

(443.) Hattix Interview, supra note 13 ("Most of what we do, most of it is driven by the number or policy that says, 'Here's how you treat certain situations.'").

(444.) See, e.g., Div. OF SUPERVISION & CONSUMER PROT., FDIC, RISK MANAGEMENT MANUAL OF Examination Policies [section] 3.2-41 (2012) ("Substandard loans are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any.").

(445.) See OCC Bulletin 2013 L15, supra note 10; FRB Kansas City Appeals, supra note 163, at 6; FRB Minneapolis Appeals, supra note 163, at 4; FDIC, Intra-Agency Appeal Process, 77 Fed. Reg. 17,055, 17,058 (Mar. 23, 2012).

(446.) See Hill, supra note 29, at 650-57, 698-99.

(447.) See id.

(448.) For example, in addressing a proposal to create an ombudsman outside of each of the financial regulators to hear MSD appeals, see infra Part IV.D, David M. Marquis, then-NCUA Executive Director explained:
   Currently, much of an examiner's findings are based on sound
   judgment and sound business or industry practice.... For example,
   there is no hard-and-true formula about proper asset
   diversification. Today, if an examiner looks at a credit union's
   books and sees too many mortgages with only a three percent down
   payment or inappropriately large mortgages, he or she will warn of
   overconcentration in the exam report. If, however, a credit union
   appealed this finding to an [authority outside the NCUA, the] NCUA
   could not point to the violation of a specific regulation, other
   than citing the fact that overconcentration is an unsafe and
   unsound practice.


Hearing on H.R. 3461, supra note 5, at 131-32 (written statement of David M. Marquis, Exec. Dir., NCUA).

(449.) FRB New York Appeals, supra note 163, at 10(a).

(450.) FDIC, Intra-Agency Appeal Process, 77 Fed. Reg. 17,055, 17,058 (Mar. 23, 2012).

(451.) FRB Kansas City Appeals, supra note 163, at 6.

(452.) Agency factfinding established through formal proceeding made "on the record" are reversed only if "unsupported by substantial evidence." 5 U.S.C. [section] 706(2)(E) (2012). Agency factfinding established through informal proceedings are reversed only if "arbitrary" or "capricious." Id. [section] 706(2)(A).

(453.) Chevron U.S.A., Inc v. Natural Res. Def. Council, Inc., 467 U.S. 837, 842M3 (1984) (holding that courts must "give effect to the unambiguously expressed intent of Congress," but gives interpretations of ambiguous statutes "controlling weight unless they are arbitrary, capricious, or manifestly contrary to the statute").

(454.) Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944) (holding that when an agency is not empowered to act with the force of law, the weight accorded to the agency's interpretation "will depend upon the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors which give it power to persuade").

(455.) Auer v. Robbins, 519 U.S. 452, 461 (1997) (quoting Bowles v. Seminole Rock & Sand Co., 325 U.S. 410,414 (1945)) (holding that interprets a test that is "a creature of [its] own regulations, [its] interpretation of it is, under our jurisprudence, controlling unless 'plainly erroneous or inconsistent with the regulation'").

(456.) See Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins., 463 U.S. 29, 41 (1983) (explaining that when an agency was authorized to promulgate safety standards using informal rulemaking, the Administrative Procedure Act's standard of review for informal rulemaking was applicable).

(457.) Chevron, 467 U.S. at 843 44. See also Ronald J. Krotoszynski, Jr., Why Deference?: Implied Delegations, Agency Expertise, and the Misplaced Legacy of Skidmore, 54 ADMIN. L. Rev. 735, 736 (2002) ("[A] reviewing court lacks legitimacy if it attempts to displace an agency's reasonable interpretation of an ambiguous statute with its own interpretation of the statute. After all, Congress vested the agency, not the federal judiciary, with the authority to resolve the meaning of ambiguous statutory text.").

(458.) See 5 U.S.C. [section] 555(e) (2012) (providing only that agencies provide "[p]rompt notice" and a "brief statement" when denying a "request of an interested person made in connection with any agency proceeding").

(459.) 12 U.S.C. [section] 4806 (2012).

(460.) See, e.g., SEC v. Chenery Corp., 332 U.S. 194, 209 (1947); Skidmore v. Swift & Co., 323 U.S. 134, 139-40 (1944). See also Krotoszynski, supra note 457, at 736 (noting that pre-Chevron case law "squarely held that federal judges should afford persuasive force to the work product of agencies based on the assumption that agencies possessed greater expertise over their own statutes and policies than did federal courts").

(461.) The OCC's Ombusdman reports directly to the Comptroller. OCC BULLETIN 2013-15, supra note 10. Some Regional Federal Reserve Bank's policies specify that officer, manager, or senior staff be appointed to review panels. See, e.g., FRB Boston Appeals, supra note 163 (noting that the panel may consist of "three officers/managers from other districts"); FRB PHILADELPHIA APPEALS, supra note 163, [section] IV.B "senior" officials on review panels. In addition, Federal Reserve Bank appeals make their way to the Regional Reserve Bank Presidents and then a member of the Board of Governors of the Federal Reserve System. Federal Reserve Sys., Internal Appeals Process, 60 Fed. Reg. 16,470, 16,472-73 (Mar. 30, 1995). At the FD1C, the Supervision Appeals Review Committee must contain one FDIC inside board member and one deputy or special assistant to a board member. FDIC, Intra-Agency Appeal Process, 77 Fed. Reg. 17,055, 17,056. The NCUA's Supervisory Review Committee consists of "members of the NCUA's senior staff." NCUA IRPS 11-1, supra note 287, at 1. In contrast, a bank examiner might be an entry-level employee at the financial regulator. See Entry-Level Bank Examiner, OCC (last visited Mar. 1, 2015) (describing the job of entry-level bank examiner).

(462.) See Peter L. Strauss, One Hundred Fifty Cases per Year: Some Implications of the Supreme Court's Limited Resources for Judicial Review of Agency Action, 87 Colum. L. Rev. 1093, 1105, 1121-22(1987).

(463.) There is still the possibility that each regulator could come to a different conclusion, but adding deference only compounds the potential differences.

(464.) Aaron-Andrew P. Bruhl, Hierarchically Variable Deference to Agency Interpretations, 89 Notre Dame L. Rev. 727,743 (2013).

(465.) As Professor Mark Seidenfeld explains:
   When an interpretation is made by a low-level official from a
   program, technical, or enforcement office within an agency as part
   of his day-to-day functions, the interpretation is likely to
   reflect the professional perspective of that official. It is
   unlikely either to go through a serious vetting process within the
   agency, or be the focus of congressional or White House attention.
   Thus, such an interpretation is more likely to reflect an
   idiosyncratic professional perspective than is one that has been
   reached after consideration by agency officials with different
   professional backgrounds or an interpretation that is sufficiently
   central to the agency's mission that it will attract attention of
   those in the White House or on Capital [sic] Hill.


Mark Seidenfeld, Chevron's Foundation, 86 Notre Dame L. Rev. 273, 301 (2011) (citations omitted). Cf. 5 U.S.C. [section] 557(b) (2012) ("On appeal from or review of the initial decision, the agency as all the powers which it would have in making the initial decision except as it may limit the issues on notice or by rule.").

(466.) See, e.g., James Madison Ltd. v. Ludwig, 82 F.3d 1085, 1096 (D.C. Cir. 1996) ("Generally speaking, district courts reviewing agency action under the APA's arbitrary and capricious standard do not resolve factual issues, but operate instead as appellate courts resolving legal questions.").

(467.) See supra notes 96, 173-74,249, 317 and accompanying text.

(468.) See supra note 96 and accompanying text.

(469.) 20 C.F.R. [section] 416.1429(2014).

(470.) Colleagues have suggested that a robust appeals process might review question of law or policy de novo but reviews questions of fact under an arbitrary and capricious standard. For the reasons already explained, 1 believe the MSD appeal processes would function best with de novo review of all appealable issues. However, I believe that a uniform arbitrary and capricious standard for facts would be a significant improvement over the current system.

(471.) See supra note 392 and accompanying text (explaining that some credit unions report not using the appeals process because they believe it will not make a difference).

(472.) See supra notes 168, 315 and accompanying text.

(473.) See Zenneth A. Ziskin, How to Cope with Tougher Exams and Enforcement Actions, Am. Banker, Dec. 28,1992, at 4.

(474.) See supra Figures 3, 6, 10, 13.

(475.) Carnell, MACEY & Miller, supra note 27, at 61-62; Connie Edwards Josey, Comment, State v. National Banks: The Battle over Examination Fees, 6 N.C. BANKING INST. 463, 466-68 (2002).

(476.) See infra note 483 and accompanying text.

(477.) Ulan Interview, supra note 13.

(478.) See generally Heidi Mandanis Schooner, The Secrets of Bank Regulation: A Reply to Professor Cohen, 6 Green Bag 2d 389 (2003).

(479.) Not everyone agrees on this point. See Heather Anderson, CAMEL Peace in Our Time, CREDIT Union Times, Feb. 11, 2013, at 1, 31 (describing disagreement between the North Carolina credit union regulator and the NCUA over whether it was appropriate to publicly release CAMEL ratings).

(480.) See supra notes 134-35, 266 and accompanying text. Some might argue that requiring the appellate authority to provide a public, written opinion will delay the appeals processes. Again, however, it appears that the OCC and FDIC have managed to provide decision information without significant delays.

(481.) See-, H.R. 2767, 113th Cong. (2013); S. 798, 113th Cong. (2013); H.R. 1553 113th Cong. (2013); S. 727, 113th Cong. (2013); S. 2160,112th Cong. (2012); H.R. 3461, 112th Cong. (2011).

(482.) See Hearing on H.R. 3461, supra note 5, at 50 (statement of Eugene A. Ludwig, Founder & CEO, Promontory Financial Group, LLC).

(483.) Id. at 78 (written statement of Albert C. Kelly, Jr., Chairman, American Bankers Association); id. at 150 (written statement of Ken Watts, President & CEO, West Virginia Credit Union League).

(484.) According to OCC Ombudsman Larry L. Hattix:
   Our concern is that creating an outside bureaucracy to hear appeals
   will significantly delay exam processing. [It would also] delay
   corrective actions that our supervisory process determines are
   necessary for the safe and sound operation of that bank or savings
   association.... If decisions are delayed because of an extended
   appeals period, bankers may be precluded from conducting certain
   activities until the appeal is resolved and a final decision
   rendered.


Witkowski, supra note 121 (quoting Larry L. Hattix, Ombudsman, OCC).

(485.) Id. ("[T]he creation of an outside ombudsman may have a chilling effect on the everyday communication that is critical to effective supervision.").

(486.) Lee Interview, supra note 13 ("If you had someone totally separate from the agency working on [MSD appeals], I just feel like it would put credit unions kind of at a disadvantage if you had somebody who was just completely unfamiliar with our processes and our institutions.").

(487.) Hearing on HR. 3461, supra note 5, at 130 (written statement of David M. Marquis, Executive Director, NCUA).

(488.) Id. at 91 (Jennifer Kelly, Senior Deputy Comptroller for Midsize and Community Bank Supervision, OCC); id. at 133 (written statement of David M. Marquis, Executive Director, NCUA).

(489.) A variant of the super-Ombudsman proposal by former Comptroller Eugene A. Ludwig suggests that a super-Ombudsman taskforce comprised of representatives from each regulator be grafted on top of existing regulatory MSD appeals processes. See id. at 50 (statement of Eugene A. Ludwig, Founder & CEO, Promontory Financial Group, LLC). An institution could approach the taskforce after exhausting the appeals process offered by its regulator. Id. Thus, the taskforce would "play more of a coordinating role among the ombudsmen at the regulatory agencies, and act as a safety valve or an appeals mechanism." Id. Given the small number of appeals that currently make it through the existing MSD appeals processes, it seems doubtful that such a taskforce would be utilized enough to justify the cost. This is particularly true if no changes are made to the existing appeals processes.

(490.) 12 U.S.C. [section] 4806(a) (2012).

(491.) S. Rep. NO. 103-169, at 51 (1993), reprinted in 1994 U.S.C.C.A.N. 1881, 1935.
FIGURE 1: OCC MATERIAL SUPERVISORY DETERMINATIONS
OMBUDSMAN APPEALS PER YEAR (1994-2012)

Year

1994   21   18
1996   10    6
1998   17    9
2000   12    6
2002    4    6
2004    2    6
2006    6    3
2008    6    3
2010    9    4
2012    9

Note: Table made from bar graph.

FIGURE 2: OCC MATERIAL SUPERVISORY DETERMINATIONS APPEALED
TO OMBUDSMAN (1994-2012)

Reason for Appeal                                             Number

CAMELS Composite or Component Ratings                           47

Loan or Asset Classifications                                   27

Community Reinvestment Act Exam Ratings or Conclusions          24

Issues Related to a Formal or Informal Enforcement Actions      17

Accounting Issues                                               15

Unprofessional, Abusive, or Retaliatory Examiner Conduct        13

Allowance for Loan and Lease Losses                             10

Insider Lending / Regulation 0                                  10

Consumer Compliance Exam Ratings or Conclusions                 9

Designation of the Bank as "Troubled"                           8

Lending Limit Rules                                             8

Determination that Bank Must Amend Its Call Report              6

Truth in Lending Act / Regulation Z                             6

FIGURE 3: OUTCOMES OF OCC MATERIAL SUPERVISORY DETERMINATION
APPEALS TO OMBUDSMAN (1994-2012)

Other       (4)
Reversed   (31)
Mixed      (32)
Upheld     (90)

Note: Table made from pie chart.

FIGURE 4: FEDERAL RESERVE MATERIAL SUPERVISORY DETERMINATIONS
APPEALS PER YEAR (2001-2012)

Year

2001   1   1
2003   1
2005   1
2009   1   5   5
2011   8   2

Note: Table made from bar graph.

FIGURE 5: FEDERAL RESERVE MATERIAL SUPERVISORY
DETERMINATIONS

Appealed (2001-2012)

Reason for Appeal                         Number

CAMELS Composite or Component Ratings       16

Loan or Asset Classifications               7

Capital Calculations                        2

Limitation or Restriction of Dividend       2
Payments

Issues Related to a Formal or Informal      2
Enforcement Actions

FIGURE 6: OUTCOMES OF FEDERAL RESERVE MATERIAL SUPERVISORY
DETERMINATION APPEALS TO OMBUDSMAN (2001-2012)

Other        (1)
Reversed     (2)
Withdrawn    (2)
Mixed        (3)
Upheld      (17)

Note: Table made from pie chart.

FIGURE 7: FDIC MATERIAL SUPERVISORY DETERMINATIONS
APPEALS FILED WITH A DIVISION DIRECTOR (2005-2012)

Year

2005   9   3
2007   8   5
2009   5
2011   11  9   6

Note: Table made from bar graph.

FIGURE 8: FDIC SUPERVISION APPEALS REVIEW COMMITTEE DECISIONS
PER YEAR (1995-2012)

Year

1996   8   7   5
1998   8   6
2000   3   2
2002   1
2004   3   3   3
2006   2   1
2008   3   2
2010   3   2
2012   1

Note: Table made from bar graph.

FIGURE 9: FDIC MATERIAL SUPERVISORY DETERMINATIONS APPEALED
(2005-2012)269

Reason for Appeal                                       Number

CAMELS Composite or Component Ratings                     35

Community Reinvestment Act Rating                         19

Loan or Asset Classifications                             13

Consumer Compliance Exam Rating or Conclusions            12

Fair Housing Act / Equal Credit Opportunity Act           7
Findings or Violations

Capital Calculations or Classification and Resulting      6
Restrictions

Issues Related to a Formal or Informal Enforcement        6
Actions

Allowance for Loan and Lease Losses                       3

Accounting Issues                                         3

Insider Lending / Regulation O                            3

Designation of the Bank as "Troubled"                     2

Determination that Bank Must Amend Its Call Report        2

FIGURE 10: OUTCOMES OF FDIC MATERIAL SUPERVISORY
DETERMINATION APPEALS (2005-2012) (271)

Reversed     (2)
Mixed        (3)
Withdrawn    (7)
Other       (11)
Upheld      (35)

Note: Table made from pie chart.

FIGURE 11: NCU MATERIAL SUPERVISORY DETERMINATION CONTACTS
FILED WITH A REGIONAL OFFICE (2002-2012)

Year

2002   1
2004   5   10
2006   14  10
2008   15  22
2010   10  22
2012   31

Note: Table made from pie chart.

FIGURE 12: NCUA MATERIAL SUPERVISORY DETERMINATIONS
PROMPTING CONTACT WITH REGIONAL OFFICE (2002-2012) (350)

Reason for Appeal                           Number

CAMEL Composite or Component Ratings          65

Document of Resolution                        47

Examiner Findings / Examination Findings      20

Report of Examination / Report Wording        14

Examiner Conduct (including Examiner          11
Communication)

Risk Rating                                   4

Insurance Review Examination Rating           3

FIGURE 13: OUTCOMES OF NCUA MATERIAL SUPERVISORY
DETERMINATION APPEALS PROCESS (2002-2012) (356)

Other        (17)
Amended      (26)
Concurred    (99)

Note: Table made from pie chart.
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Title Annotation:II. Appeals Processes by Regulator D. NCUA through Conclusion, with footnotes, p. 1149-1185
Author:Hill, Julie Andersen
Publication:Washington University Law Review
Date:Jul 1, 2015
Words:26134
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