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On February 17, the OCC issued a notice of proposed rulemaking to establish a revised regulatory framework governing appeals of material supervisory determinations under the Riegle Community Development and Regulatory Improvement Act. The proposal would replace the OCC's existing guidance and formalize procedures for banks and certain institution-affiliated parties to challenge examination findings and other supervisory decisions.
Under the proposal, the agency would replace the current ombudsman-led framework with a new appeals board composed of senior OCC leadership and term appointees, adopt a de novo standard of review that eliminates deference to exam staff, and strengthen anti-retaliation safeguards. The OCC acknowledged that only about 1% of supervised institutions filed appeals in 2024—and that more than 90% were decided in the agency's favor—suggesting the current system may discourage use. Under the revised framework, the OCC expects appeals to increase materially and anticipates a substantially higher reversal rate.
Putting It Into Practice: If finalized, the proposal would materially affect how OCC-supervised institutions approach supervisory disagreements. The express de novo review standard, formal stay criteria, and strengthened anti-retaliation provisions may shift the cost-benefit analysis around whether to escalate disputes beyond informal resolution. Banks should review internal governance procedures, including board approval protocols for appeals, and assess how the proposed framework could impact examination response strategies.
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