On February 17, the OCC issued an NPRM in the Federal Register to revise procedures for appeals of material supervisory determinations by entities under its supervision. The proposal would replace the current ombudsman-led process with an appeals board composed of the chief national bank examiner and two “term appointees” (as defined in the NPRM), establish a formal “de novo standard of review” that is not deferential to either party or its determinations, and enhance prohibitions against retaliation. The proposal would shift the ombudsman’s role from a “decision maker” to a “neutral liaison” responsible for assisting banks in navigating appeals, conducting post-examination outreach, and investigating complaints. Under the rule, appellants could seek stays of disputed determinations if the appeals board determines that delaying action would not: (i) result in a risk of immediate financial harm to an OCC-supervised institution; (ii) impose costs on the appellant before an appeal decision; or (iii) otherwise harm the public interest.

The OCC stated the changes aim to increase independence and transparency in supervisory appeals as well as to ensure consistent application of supervisory standards. The agency projected the revised process would significantly increase appeal filings, estimating 50 per year with half likely to succeed. The proposal maintained existing deadlines for filing appeals — generally 60 days, but shorter for fair lending referrals to DOJ — and codified expedited review for matters causing critical undercapitalization. The OCC stated it is soliciting feedback on multiple structural elements, including the composition of the appeals board, term limits, and stay criteria. This OCC action followed the FDIC’s changes to its supervisory appeals process in January (covered by InfoBytes here).