# SR 20-28 / CA 20-14: Internal Appeals Process for Material Supervisory Determinations and Policy Statement Regarding the Ombudsman for the Federal Reserve System

> Federal · Agency guidance · In force

URL: https://www.frixlaw.com/law-library/statutes/FRB_SR2028

## Section

- **Citation:** SR 20-28 / CA 20-14
- **Heading:** Internal Appeals Process for Material Supervisory Determinations and Policy Statement Regarding the Ombudsman for the Federal Reserve System
- **Jurisdiction:** Federal
- **Kind:** Agency guidance
- **Status:** In force
- **Text as of:** August 14, 2026
- **Source:** Compiled text
- **Location:** Federal Reserve SR/CA Letters / Internal Appeals Process for Material Supervisory Determinations and Policy Statement Regarding the Ombudsman for the Federal Reserve System

## Text

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BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON, D.C. 20551

DIVISION OF SUPERVISION
AND REGULATION

DIVISION OF CONSUMER AND
COMMUNITY AFFAIRS

SR 20-28
CA 20-14
December 4, 2020

TO THE OFFICER IN CHARGE OF SUPERVISION
AT EACH FEDERAL RESERVE BANK

SUBJECT: Internal Appeals Process for Material Supervisory Determinations and Policy
Statement Regarding the Ombudsman for the Federal Reserve System

Applicability: This guidance applies to institutions, including those with $10 billion or less in
total consolidated assets, that receive a material supervisory determination by the Federal
Reserve.

On April 1, 2020, the Federal Reserve Board updated its policy statement governing the
internal appeals process for material supervisory determinations and revised the Board’s
Ombudsman policy.1 As explained in the attached policy statement, the Board is committed to
maintaining an independent, intra-agency process to review appeals of material supervisory
determinations that complies with Section 309 of the Riegle Community Development and
Regulatory Improvement Act of 1994.2 The Board is also committed to maintaining an effective
Ombudsman to serve as a resource for individuals and institutions that are affected by the
Federal Reserve’s regulatory and supervisory actions.

1 With the issuance of this SR/CA letter, SR letter 95-18, “Section 309 of the Riegle Community Development and
Regulatory Improvement Act of 1994, Intra-Agency Appeals Process,” is superseded
e Board is also committed to maintaining an effective
Ombudsman to serve as a resource for individuals and institutions that are affected by the
Federal Reserve’s regulatory and supervisory actions.

1 With the issuance of this SR/CA letter, SR letter 95-18, “Section 309 of the Riegle Community Development and
Regulatory Improvement Act of 1994, Intra-Agency Appeals Process,” is superseded.
A “material supervisory determination” includes, but is not limited to, any material determination relating to
examination or inspection composite ratings, material examination or inspection component ratings, the adequacy of
loan loss reserves and/or capital, significant loan classification, accounting interpretation, Matters Requiring
Attention, Matters Requiring Immediate Attention, Community Reinvestment Act ratings (including component
ratings), and consumer compliance ratings. The term does not include any supervisory determination for which an
independent right of appeal exists or a referral to another government agency.
2 Refer to 12 U.S.C. 4806.

Page 2 of 2
Overview of Amended Appeals Process

As set forth in the policy statement, the Board amended its appeals process to improve
and expedite the process. For instance, the amended appeals process specifies the standards of
review that the Board will follow, and describes the selection of the review panel members. The
amended appeals process also decreases the processing time for appeals, and provides an
expedited timeline for appeals of determinations that relate to or that would cause an institution
to become critically undercapitalized under the Prompt Corrective Action framework. Other
changes to the appeals process include reducing the number of review levels from three under
the prior process to two, and increasing transparency through public disclosure of final appeal
decisions in redacted or summary form determined by the Board
ions that relate to or that would cause an institution
to become critically undercapitalized under the Prompt Corrective Action framework. Other
changes to the appeals process include reducing the number of review levels from three under
the prior process to two, and increasing transparency through public disclosure of final appeal
decisions in redacted or summary form determined by the Board.

Overview of the Ombudsman Policy

The amended Ombudsman policy formalizes many of the current practices of the
Ombudsman, including receiving supervisory-related complaints and material supervisory
determination appeals. In addition, the amended policy clarifies that the Ombudsman may attend
meetings or deliberations relating to an appeal as an observer, if requested by the institution or
Federal Reserve staff. The amended policy also formalizes the Ombudsman’s role as the
decision-maker with respect to claims of retaliation.
Reserve Banks are asked to distribute this letter to the supervised institutions in their
districts and to appropriate supervisory staff. Questions regarding this letter may be sent via the
Board’s public website.3 Questions regarding this letter may also be directed to the Board
Ombudsman’s Office, 1-800-337-0429.

Michael S. Gibson
Eric S. Belsky
Director
Director
Division of Supervision
Division of Consumer and
and Regulation
Community Affairs

Attachment:
• “Internal Appeals Process for Material Supervisory Determinations and Policy Statement
Regarding the Ombudsman for the Federal Reserve System”
Supersedes:
•
SR letter 95-18, “Section 309 of the Riegle Community Development and Regulatory
Improvement Act of 1994, Intra-Agency Appeals Process”

3 See http://www.federalreserve.gov/apps/contactus/feedback.aspx
y Affairs

Attachment:
• “Internal Appeals Process for Material Supervisory Determinations and Policy Statement
Regarding the Ombudsman for the Federal Reserve System”
Supersedes:
•
SR letter 95-18, “Section 309 of the Riegle Community Development and Regulatory
Improvement Act of 1994, Intra-Agency Appeals Process”

3 See http://www.federalreserve.gov/apps/contactus/feedback.aspx

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FEDERAL RESERVE SYSTEM

[Docket No. OP-1696]

Internal Appeals Process for Material Supervisory Determinations and
Policy Statement Regarding the Ombudsman for the Federal Reserve
System1

PROCESS FOR APPEALS OF MATERIAL SUPERVISORY
DETERMINATIONS

The Board is committed to maintaining an independent, intra-agency
process to review appeals of material supervisory determinations that complies
with section 309 of the Riegle Community Development and Regulatory
Improvement Act of 1994, 12 U.S.C. 4806.

The purpose of this document is to establish a comprehensive appellate
process for material supervisory determinations. In order to ensure that
institutions will be granted the same appellant rights regardless of the Federal
Reserve district in which they reside, appeals will be administered using
procedures that are consistent with this process. This process includes an
accelerated review process to improve its alignment with the Prompt Corrective
Action (“PCA”) framework under section 38 of the Federal Deposit Insurance
Act (“FDI Act”.)

A.
In General

Any institution about which the Federal Reserve makes a written material
supervisory determination is eligible to utilize the appeals process. An eligible
institution includes a state member bank, bank holding company and its
nonbank subsidiaries, U.S
t with the Prompt Corrective
Action (“PCA”) framework under section 38 of the Federal Deposit Insurance
Act (“FDI Act”.)

A.
In General

Any institution about which the Federal Reserve makes a written material
supervisory determination is eligible to utilize the appeals process. An eligible
institution includes a state member bank, bank holding company and its
nonbank subsidiaries, U.S. agency or branch of a foreign bank, Edge and
agreement corporation, savings and loan holding company, third party
electronic data processing servicer, systemically important nonbanking
financial organization identified by the Financial Stability Oversight Council,
and any other entity examined or inspected by the Federal Reserve.

1 See Board of Governors of the Federal Reserve System, “Internal Appeals Process for Material Supervisory
Determinations and Policy Statement Regarding the Ombudsman for the Federal Reserve System,” Federal
Register, vol. 85, pp. 15175-183 (March 17, 2020).

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An appeal under this process may be made of any written material
supervisory determination. A “material supervisory determination” includes,
but is not limited to, any material determination relating to examination or
inspection composite ratings, material examination or inspection component
ratings, the adequacy of loan loss reserves and/or capital, significant loan
classification, accounting interpretation, Matters Requiring Attention
(“MRAs”), Matters Requiring Immediate Attention (“MRIAs”), Community
Reinvestment Act ratings (including component ratings), and consumer
compliance ratings. The term does not include any supervisory determination
for which an independent right of appeal exists or a referral to another
government agency
significant loan
classification, accounting interpretation, Matters Requiring Attention
(“MRAs”), Matters Requiring Immediate Attention (“MRIAs”), Community
Reinvestment Act ratings (including component ratings), and consumer
compliance ratings. The term does not include any supervisory determination
for which an independent right of appeal exists or a referral to another
government agency. Excluded actions include, for example, PCA directives
issued pursuant to section 38 of the FDI Act; an action to impose administrative
enforcement actions under the FDI Act, the Home Owners’ Loan Act of 1933,
the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Bank
Holding Company Act of 1956 (“BHC Act”) or other applicable act; a capital
directive; an order related to approval or denial of a transaction issued pursuant
to section 3 or 4 of the BHC Act; written notice of a referral to the Attorney
General pursuant to the Equal Credit Opportunity Act (“ECOA”) or a notice to
the Secretary of Housing and Urban Development for violations of the ECOA
or the Fair Housing Act; and determinations made under the Shared National
Credit Program.

B.
General Procedures for Appealing a Material Supervisory
Determination

In general, the appeals process is an informal process that is not subject
to the adjudicative provisions of the Administrative Procedures Act (5 U.S.C.
554, 556-557). An appeal of a material supervisory determination shall be filed
and considered pursuant to the following procedures:
National
Credit Program.

B.
General Procedures for Appealing a Material Supervisory
Determination

In general, the appeals process is an informal process that is not subject
to the adjudicative provisions of the Administrative Procedures Act (5 U.S.C.
554, 556-557). An appeal of a material supervisory determination shall be filed
and considered pursuant to the following procedures:

(1)
Authorization to File. Any appeal must be approved by the board
of directors of the eligible institution or by its senior management in
consultation with its board of directors. Senior management is defined as the
core group of individuals directly accountable to the board of directors for the
sound and prudent day-to-day management of the firm, or in the case of a U.S.
agency or branch of a foreign bank, responsible for the bank’s U.S. operations.
Senior management shall inform the board of directors of the substance of the

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appeal before filing the appeal and shall keep the board of directors informed of
the status of the appeal.

(2)
Timelines and Contents. The institution must file the appeal in
writing with the Board’s Ombudsman within 30 calendar days of the earlier of
the date the material supervisory determination was sent electronically, the date
the institution received the written determination, or the date the Reserve Bank
received confirmation that the institution received the determination, with a
copy to the officer in charge of supervision at the appropriate Reserve Bank.
When the deadline for filing an appeal falls on a weekend or federal holiday,
the deadline for the appeal shall be the next business day. The institution may
file a written request for an extension of the time to file an appeal with the
Ombudsman, which request shall state good cause for granting the extension
h a
copy to the officer in charge of supervision at the appropriate Reserve Bank.
When the deadline for filing an appeal falls on a weekend or federal holiday,
the deadline for the appeal shall be the next business day. The institution may
file a written request for an extension of the time to file an appeal with the
Ombudsman, which request shall state good cause for granting the extension.
Such request shall be granted in the sole discretion of the director of the
appropriate division of the Board in consultation with the Board’s General
Counsel or his designee. The appeal must include a clear and complete
statement of all relevant facts and issues, as well as all arguments that the
institution wishes to present, and must include all relevant and material
documents that the institution wishes to be considered. Prior to a material
supervisory determination being made, it is expected that the institution will
have provided all available information it believes to be relevant to the
examination staff to assist them in making the determination. Accordingly,
absent good cause, as determined in the discretion of the initial review panel,
any facts or data submitted by the institution in connection with the appeal shall
be limited to those that were made available to examination staff prior to the
date on which the written material supervisory determination was delivered to
the institution.

(3)
Distribution of Appeal. After receipt of a request for an appeal,
the Board’s Ombudsman shall promptly notify the director of the appropriate
division of the Board and the Board’s General Counsel of the appeal.
d to those that were made available to examination staff prior to the
date on which the written material supervisory determination was delivered to
the institution.

(3)
Distribution of Appeal. After receipt of a request for an appeal,
the Board’s Ombudsman shall promptly notify the director of the appropriate
division of the Board and the Board’s General Counsel of the appeal.

(4)
Initial Review Panel. Within ten calendar days of receipt of a
timely appeal, the director of the appropriate division of the Board or an officer
designated by the appropriate division director must appoint three Reserve
Bank employees to serve as an initial review panel to consider the appeal and
an attorney to advise the initial review panel in the exercise of its
responsibilities. In appropriate circumstances, the appropriate division director
may appoint a Board employee as one of the three members of the initial review

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panel. The members of the initial review panel and the appointed attorney must
not have been substantively involved in any matter at issue; must not directly or
indirectly report to any person(s) who made the material supervisory
determination under review; must not be employed by the Reserve Bank that
made the material supervisory determination under review; and must have
relevant experience to contribute to the review of the material supervisory
determination. An individual shall be considered to have been substantively
involved in a material supervisory determination if the individual was
personally consulted regarding the issue being determined and provided
guidance regarding how it should be resolved. The initial review panel shall
determine all procedural issues regarding the initial review.
eview of the material supervisory
determination. An individual shall be considered to have been substantively
involved in a material supervisory determination if the individual was
personally consulted regarding the issue being determined and provided
guidance regarding how it should be resolved. The initial review panel shall
determine all procedural issues regarding the initial review.

(5)
Initial Review Meeting. The initial review panel shall conduct an
informal appeal meeting if the institution requests such a meeting at the time it
files its appeal or if the panel, in its discretion, decides to hold such a meeting.
If such a meeting is to be conducted, the panel should, in consultation with the
institution, schedule a meeting for a date that is no later than 21 calendar days
after the date the appeal is received. The panel shall notify the institution in
writing of the date, time, and place of the meeting. The institution may appear
at the appeal meeting personally or through counsel to make an oral
presentation to the panel. Panel members may ask questions of any person
participating in the meeting. The institution and the Reserve Bank may not
cross-examine persons participating in the meeting. A verbatim transcript of
the meeting may be taken if the institution requests a transcript and agrees to
pay all expenses, and if the initial review panel determines that a transcript
would assist the panel in carrying out its responsibilities. The meeting provided
under this process is not governed by formal rules of evidence. No formal
discovery is required or permitted. The initial review panel may make any
rulings reasonably necessary to facilitate the effective and efficient operation of
the meeting.
, and if the initial review panel determines that a transcript
would assist the panel in carrying out its responsibilities. The meeting provided
under this process is not governed by formal rules of evidence. No formal
discovery is required or permitted. The initial review panel may make any
rulings reasonably necessary to facilitate the effective and efficient operation of
the meeting.

(6)
Record. The record of the appeal shall at a minimum include the
original material supervisory determination being appealed, the materials
submitted by the institution in connection with the appeal, and the materials
identified by Federal Reserve staff as relevant to the material supervisory
determination being appealed, including workpapers. In addition, the initial
review panel may, in its discretion, conduct additional fact finding. For
example, the initial review panel may supplement the record by soliciting the
views of outside parties, including staff from the Board, the Reserve Banks,

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other supervisory agencies (for example, in cases of joint examinations or
inspections), and the Federal Reserve staff who participated in making the
material supervisory determination being appealed. The entire record of the
appeal, including the decision of the initial review panel and any meeting
transcripts or material(s) submitted in connection with any subsequent final
review, shall be considered confidential supervisory information of the Board.
inations or
inspections), and the Federal Reserve staff who participated in making the
material supervisory determination being appealed. The entire record of the
appeal, including the decision of the initial review panel and any meeting
transcripts or material(s) submitted in connection with any subsequent final
review, shall be considered confidential supervisory information of the Board.

(7)
Standard of Review Applied by Initial Review Panel. The
initial review panel shall conduct a review of the material supervisory
determination on appeal. The panel must consider whether the Reserve Bank’s
material supervisory determination is consistent with applicable laws,
regulations, and policy, and supported by a preponderance of the evidence in
the record. In doing so, the panel shall make its own supervisory determination
and shall not defer to the judgment of the Reserve Bank staff that made the
material supervisory determination though it may rely on any examination
workpapers developed by the Reserve Bank or materials submitted by the
institution if it determines it is reasonable to do so.

(8)
Notice of Decision. Within 45 calendar days after the date the
appeal is received, the initial review panel shall provide written notice of its
decision to the senior management and the board of directors of the institution.
A copy of the decision will be provided to the director of the appropriate
division of the Board, the officer in charge of supervision at the appropriate
Reserve Bank, and the Board’s Ombudsman. The notice of decision shall
contain a statement of the basis for the initial review panel’s decision to
continue, terminate, or otherwise modify the material supervisory
determination(s) at issue or to remand consideration of the material supervisory
determination at issue to the examiners that made the determination to allow
them to consider additional evidence presented in connection with the appeal
of decision shall
contain a statement of the basis for the initial review panel’s decision to
continue, terminate, or otherwise modify the material supervisory
determination(s) at issue or to remand consideration of the material supervisory
determination at issue to the examiners that made the determination to allow
them to consider additional evidence presented in connection with the appeal.
The notice of decision shall identify the information upon which the panel
relied in reaching its conclusion, and the panel shall promptly provide that
information to the institution upon the institution’s request to the extent
permitted by law. Such request must be made within seven calendar days of
receipt of the notice of decision. The notice of decision shall also indicate that
the institution may request a final review as set forth in this subpart by filing a
written request with the Board’s Ombudsman. The initial review panel may
extend the period for issuing a decision by up to 30 calendar days if the panel
determines that the record is incomplete and additional fact-finding is necessary
for the panel to issue a decision.

Page 6 of 16

(9)
Use of Confidential Supervisory Information. If the Reserve
Bank or the Board has confidential supervisory information from another
regulated institution that is pertinent to the appeal, they may elect to use that
information, provided that the information is entered into the record for the
appeal and provided to the appealing institution, subject to limitations on
disclosure, including those imposed by the Board’s applicable regulations,2 and
redaction of all information not relevant to the appeal.
rmation from another
regulated institution that is pertinent to the appeal, they may elect to use that
information, provided that the information is entered into the record for the
appeal and provided to the appealing institution, subject to limitations on
disclosure, including those imposed by the Board’s applicable regulations,2 and
redaction of all information not relevant to the appeal.

(10) Request for Final Review. Within 14 calendar days after notice
of decision by the initial review panel, the institution, at the direction of its
board of directors or senior management in consultation with the board of
directors, may appeal that decision to a final review panel by filing a written
request for final review with the Board’s Ombudsman, with a copy to the
officer in charge of supervision at the appropriate Reserve Bank. Senior
management shall inform the board of directors of the substance of the appeal
before filing the appeal and shall keep the board of directors informed of the
status of the appeal. The request for final review must state all the reasons,
legal and factual, the institution disagrees with the initial review panel’s
decision. The institution may file a written request for an extension of the time
to file an appeal with the Ombudsman, which request shall state good cause for
granting the extension. The decision to grant such a request shall be in the sole
discretion of the director of the appropriate division of the Board in consultation
with the Board’s General Counsel or his designee.

(11) Waiver of Final Review. Failure to timely request final review in
a manner consistent with this process shall constitute a waiver of the
opportunity for final review, and the decision of the initial review panel shall
constitute a final and unappealable material supervisory determination.
ropriate division of the Board in consultation
with the Board’s General Counsel or his designee.

(11) Waiver of Final Review. Failure to timely request final review in
a manner consistent with this process shall constitute a waiver of the
opportunity for final review, and the decision of the initial review panel shall
constitute a final and unappealable material supervisory determination.

(12) Distribution of Final Review Request. After receipt of a request
for final review, the Board’s Ombudsman shall promptly notify the director of
the appropriate division of the Board and the Board’s General Counsel of the
request for final review.

(13) Final Review Panel. When an institution files a request for final
review, the director of the appropriate division of the Board shall promptly

2 See 12 CFR 261.20.

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appoint three individuals to serve as a final review panel to permit completion
of the appeal within the applicable period. The final review panel shall include
at least two Board employees, at least one of whom must be an officer of the
Board at the level of associate director or higher. The Board’s General Counsel
shall appoint an attorney to advise the final review panel in the exercise of its
responsibilities. The members of the final review panel and the appointed
attorney must not be employed by the Reserve Bank that made the material
supervisory determination under review; must not have been members of the
initial review panel; and must not have been personally consulted regarding the
issue being determined and provided guidance regarding how it should be
resolved, or directly or indirectly report to the person(s) who made the material
supervisory determination under review. The final review panel shall determine
all procedural issues regarding the final review.
t not have been members of the
initial review panel; and must not have been personally consulted regarding the
issue being determined and provided guidance regarding how it should be
resolved, or directly or indirectly report to the person(s) who made the material
supervisory determination under review. The final review panel shall determine
all procedural issues regarding the final review.

(14) Final Review Meeting. The final review panel may determine in
its discretion to have an informal appeal meeting at which a representative of
the institution or counsel may appear personally to make an oral presentation to
the panel. No facts may be introduced in this meeting that are not contained in
the record upon which the initial review panel made its decision. In the event
the panel decides to have a meeting with the appealing institution, panel
members may ask questions of any person participating in the meeting. The
institution may not cross-examine persons participating in the meeting. A
verbatim transcript of the meeting may be taken at the cost of the Board if the
final review panel determines that a transcript would assist the panel in carrying
out its responsibilities. A meeting provided under this process is not governed
by formal rules of evidence. No formal discovery is required or permitted. The
final review panel may make any procedural rulings reasonably necessary to
facilitate the effective and efficient operation of the meeting.

(15) Scope of Final Review. The scope of the final review shall be
confined to the record upon which the initial review panel made its decision.
rocess is not governed
by formal rules of evidence. No formal discovery is required or permitted. The
final review panel may make any procedural rulings reasonably necessary to
facilitate the effective and efficient operation of the meeting.

(15) Scope of Final Review. The scope of the final review shall be
confined to the record upon which the initial review panel made its decision.

(16) Standard of Review of Final Review. The final review panel
shall determine whether the decision of the initial review panel is reasonable.
In reaching this determination, the panel should consider whether the decision
was based on a consideration of the applicable law, regulations, and policy, and
whether there has been a clear error of judgment. The final review panel may
affirm the decision of the initial review panel even if it is possible to draw a
contrary conclusion from the record presented on appeal.

Page 8 of 16

(17) Notice of Final Review Decision. Within 21 calendar days of the
filing of a request for final review, the director of the appropriate division of the
Board shall provide written notice of the decision of the final review panel to
the senior management and the board of directors of the institution. The final
review panel may continue, terminate, or otherwise modify the material
supervisory determination(s) at issue or remand consideration of the material
supervisory determination at issue to the examiners who made the
determination to allow them to consider additional evidence presented in
connection with the appeal. The notice of decision shall contain a statement of
the basis for the final review panel’s decision. A copy of the decision will be
provided to the director of the appropriate division of the Board, the officer in
charge of supervision at the appropriate Reserve Bank, and the Board’s
Ombudsman
termination to allow them to consider additional evidence presented in
connection with the appeal. The notice of decision shall contain a statement of
the basis for the final review panel’s decision. A copy of the decision will be
provided to the director of the appropriate division of the Board, the officer in
charge of supervision at the appropriate Reserve Bank, and the Board’s
Ombudsman. A copy of the decision will be published on the Board’s public
website as soon as practicable, and the published decision will be redacted to
avoid disclosure of exempt information. In cases in which redaction is deemed
insufficient to prevent improper disclosure, the published decision may be
presented in summary form. The final review panel may extend the period for
issuing a decision by up to 30 calendar days if the panel determines that, based
on the facts and circumstances of the appeal, an extension is appropriate.

(18) Ombudsman Participation. The Board’s Ombudsman may
attend, as an observer, meetings or deliberations relating to the appeal at either
level if requested by either the institution or System personnel. The
Ombudsman will not have substantive involvement in or act as a decision-
maker with respect to the appeal.

C.
Expedited Procedures for Appealing a Material Supervisory
Determination

When a material supervisory determination relates to or causes an
institution to become critically undercapitalized, as defined by section 38 of the
FDI Act, the review of any appeal of that supervisory determination will be
processed on an expedited basis.

Notwithstanding any other provision in this process, a matter processed
under expedited review will be subject to the same policies that govern all
appeals except that the initial review panel will issue a decision within 35
cally undercapitalized, as defined by section 38 of the
FDI Act, the review of any appeal of that supervisory determination will be
processed on an expedited basis.

Notwithstanding any other provision in this process, a matter processed
under expedited review will be subject to the same policies that govern all
appeals except that the initial review panel will issue a decision within 35

Page 9 of 16

calendar days following the date the appeal is received (such period may be
extended by up to an additional 7 calendar days if the initial review panel
decides that such time is required to supplement the record and to consider any
additional information received), the institution shall have 7 days to file an
appeal of the initial review panel’s decision, and the final review panel will
issue a decision within 10 calendar days.

D.
Effect of Appeal on Material Supervisory Determinations

A material supervisory determination shall remain in effect while under
appeal unless and until such time as it is modified or terminated through the
appeals process. An appeal does not prevent or suspend the Federal Reserve or
any other appropriate agency from taking any supervisory or enforcement
action–either formal or informal–it deems appropriate to discharge the agency’s
supervisory responsibilities. In such cases, the rights of appeal provided for in
the statutes and regulations concerning those actions shall govern.

In addition, an appeal does not prevent or suspend the operation of the
PCA framework under section 38 of the FDI Act, prevent or suspend an
appropriate authority from appointing a receiver for the institution or otherwise
causing the closure of an institution, or prevent or suspend an appropriate
authority from taking any other action under the PCA framework. If the
institution is placed into receivership while an appeal is outstanding, the appeal
will be considered moot and will not be completed.

E
ct, prevent or suspend an
appropriate authority from appointing a receiver for the institution or otherwise
causing the closure of an institution, or prevent or suspend an appropriate
authority from taking any other action under the PCA framework. If the
institution is placed into receivership while an appeal is outstanding, the appeal
will be considered moot and will not be completed.

E.
Safeguards Against Retaliation

Neither the Federal Reserve nor any employee of the Federal Reserve
may retaliate against an institution or person, including based on the filing or
outcome of an appeal under this process. In accordance with longstanding
Federal Reserve practice, the appeals framework is intended to foster an
environment where concerns and issues may be freely and openly discussed.

Each Reserve Bank shall provide institutions with notice of the Board’s
anti-retaliation policy in connection with each Federal Reserve led examination.

An institution that believes that it has suffered retaliation or any other
form of unfair treatment is encouraged to contact the appropriate Reserve Bank,
and may file a claim of retaliation with the Board’s Ombudsman. The

Page 10 of 16

Ombudsman may attempt to resolve a claim of retaliation informally by
engaging in discussions with the concerned institution and the appropriate
Board or Reserve Bank staff.

Nothing in this guidance is intended to prevent the Ombudsman from
initiating a factual inquiry into alleged retaliation at any time. The Ombudsman
may initiate a factual inquiry into a claim of retaliation, at any time, by
providing notice to the director of the appropriate division of the Board and
appropriate Board committee, and the officer in charge of supervision at the
appropriate Reserve Bank. As part of the inquiry, the Ombudsman may collect
and review documents, interview witnesses, and consult Board and Reserve
Bank staff with subject matter expertise
uiry into a claim of retaliation, at any time, by
providing notice to the director of the appropriate division of the Board and
appropriate Board committee, and the officer in charge of supervision at the
appropriate Reserve Bank. As part of the inquiry, the Ombudsman may collect
and review documents, interview witnesses, and consult Board and Reserve
Bank staff with subject matter expertise. The Ombudsman also may request
that the director of the appropriate division of the Board authorize or assign
such additional resources as necessary to assist the Ombudsman in fully
reviewing the matter.

Upon the completion of a factual inquiry into a claim of retaliation, if the
Ombudsman concludes that retaliation has occurred, the Ombudsman will
forward the claim of retaliation, along with the Ombudsman’s factual findings
to the director of the appropriate division of the Board. These officials will take
appropriate action consistent with the Board’s or relevant Reserve Bank’s
policies and procedures to resolve the matter. In addition, to prevent future
retaliation for an appeal, the Ombudsman may recommend to the director of the
appropriate division of the Board that the next examination of the institution or
review that may lead to a material supervisory determination exclude personnel
involved in the claim of retaliation. The division director(s) will make the final
decision as to whether any examination staff should be excluded.

The Board’s Ombudsman will contact institutions within six months after
a material supervisory determination appeal has been decided to inquire
whether the institution believes retaliation has occurred.
F.
Availability of Procedures
The Federal Reserve, through the Board and Reserve Banks, shall make
this process readily available on its public website and to any member of the
public who requests it.
an will contact institutions within six months after
a material supervisory determination appeal has been decided to inquire
whether the institution believes retaliation has occurred.
F.
Availability of Procedures
The Federal Reserve, through the Board and Reserve Banks, shall make
this process readily available on its public website and to any member of the
public who requests it.

Page 11 of 16

Ombudsman for the Federal Reserve System
Policy Statement
Section 309 of the Riegle Community Development and Regulatory
Improvement Act of 1994, 12 U.S.C. 4806, requires each of the Federal
banking agencies to appoint an Ombudsman. Section 309 provides that the
Ombudsman:
(1) Is to act as a liaison between the agency and any affected person with
respect to any problem such party may have in dealing with the agency
resulting from the regulatory activities of the agency; and
(2) Is to assure that safeguards exist to encourage complainants to come
forward and preserve confidentiality.
Mission of the Ombudsman. The Ombudsman is charged with performing
three major functions: (1) serving as a facilitator and moderator for the fair and
timely resolution of complaints related to the Federal Reserve System’s
regulatory activities; (2) reporting to the Board on issues that are likely to have
a significant impact on the Federal Reserve System’s missions, activities, or
reputation that arise from the Ombudsman’s review of complaints, such as
patterns of issues that occur in multiple complaints; and (3) receiving,
reviewing, and deciding claims of retaliatory conduct by Federal Reserve
System staff. The Ombudsman also serves as the initial recipient for appeals of
material supervisory determinations and plays a role in resolving appeals of
some consumer complaints. In addition, the Ombudsman ensures that
safeguards exist to encourage complainants to come forward and to protect
confidentiality.
Serving as a Complaint Facilitator
of retaliatory conduct by Federal Reserve
System staff. The Ombudsman also serves as the initial recipient for appeals of
material supervisory determinations and plays a role in resolving appeals of
some consumer complaints. In addition, the Ombudsman ensures that
safeguards exist to encourage complainants to come forward and to protect
confidentiality.
Serving as a Complaint Facilitator. The Ombudsman assists institutions with
issues and questions related to Reserve Bank or Board regulatory activities. In
doing so, the Ombudsman shall operate independently of the supervisory
process to the extent necessary to ensure that appropriate safeguards exist to
encourage complainants to come forward and preserve confidentiality.
In situations where the Board has not established a process for addressing a
certain type of question or complaint, the Ombudsman is available to facilitate
the resolution of the question or complaint. Although the Ombudsman does not

Page 12 of 16

have decision-making authority regarding any substantive matters, including
supervisory determinations and regulatory action (other than for retaliation
claims), the Ombudsman is available to assist institutions, and particularly
community banks, in locating the correct Federal Reserve System staff person
to address or resolve such a question or complaint and may coordinate meetings
and facilitate discussions between the institution and System staff, including
senior officials, as necessary. In order to facilitate this process, the
Ombudsman may investigate the situation in order to identify the relevant facts
and circumstances. The Ombudsman may also participate in meetings or
discussions related to the matter if requested by either the institution or System
staff, and may require updates from System staff, as appropriate, until the
matter is resolved
officials, as necessary. In order to facilitate this process, the
Ombudsman may investigate the situation in order to identify the relevant facts
and circumstances. The Ombudsman may also participate in meetings or
discussions related to the matter if requested by either the institution or System
staff, and may require updates from System staff, as appropriate, until the
matter is resolved. If the Ombudsman believes such a complaint has not been
satisfactorily addressed, the Ombudsman may raise the matter with the
appropriate division director or Board committee, as appropriate.
When an issue is brought to the attention of the Ombudsman for which the
Board’s rules or procedures provide an avenue of appeal or another appropriate
forum for resolution, the Ombudsman will explain the process to the
complaining party, and direct the party to the appropriate appeals process or
forum for the complaint.3 In addition, the Ombudsman is also available to
facilitate informal discussions between a potential appellant and the appropriate
Reserve Bank or Board staff in order to explore solutions before an appeal is
filed. Such discussions do not stay or otherwise alter any of the deadlines under
the Board’s rules or procedures.
The Ombudsman will serve as the initial recipient for an appeal of a material
supervisory determination and may attend, as an observer, meetings or
deliberations relating to the appeal if requested by either the institution or
System personnel. In any event, the Ombudsman will not have any substantive
involvement in or act as a decision-maker with respect to the appeal
rules or procedures.
The Ombudsman will serve as the initial recipient for an appeal of a material
supervisory determination and may attend, as an observer, meetings or
deliberations relating to the appeal if requested by either the institution or
System personnel. In any event, the Ombudsman will not have any substantive
involvement in or act as a decision-maker with respect to the appeal.

3 For example, the Ombudsman may explain some of the existing mechanisms for resolutions
of complaints, such as: material supervisory determinations pursuant to section 309(a) of the
Riegle Act; actions delegated to the Reserve Banks or Board staff pursuant to 12 CFR Part
265; prompt corrective action directives under section 38 of the FDI Act; denials or partial
denials of Freedom of Information or Privacy Act requests; issuance of capital directives
pursuant to 12 CFR 263.80-263.85; decisions with respect to applications; and matters within
the jurisdiction of the Board's Inspector General or Federal or State investigatory or
prosecutorial authorities.

Page 13 of 16

Providing Feedback on Patterns of Issues. The Ombudsman is in a unique
position to identify and report patterns of issues arising from complaints related
to Reserve Bank or Board regulatory activities. The Ombudsman will track
inquiries and complaints based on relevant characteristics, such as geographic
location, scope, policy implications, and final disposition, to help identify any
such trends, including trends that implicate differently sized institutions
disproportionately. This tracking will be conducted in a manner designed to
preserve confidentiality of the complainant to the maximum extent possible. As
appropriate, the Ombudsman will report findings of patterns of issues to the
appropriate Board committee or division director and Reserve Bank or Board
staff
any
such trends, including trends that implicate differently sized institutions
disproportionately. This tracking will be conducted in a manner designed to
preserve confidentiality of the complainant to the maximum extent possible. As
appropriate, the Ombudsman will report findings of patterns of issues to the
appropriate Board committee or division director and Reserve Bank or Board
staff. The Ombudsman will also report any issue stemming from a complaint
that is likely to have a significant impact on the Federal Reserve System’s
mission, activities, or reputation.
Retaliation Claims by Supervised Persons. The Board does not tolerate
retaliation by Federal Reserve System staff against a supervised institution or its
employees (“supervised persons”). Retaliation is defined as any action or
decision by Reserve Bank or Board staff that causes a supervised person to be
treated differently or more harshly than other similarly situated institutions
because the supervised person attempted to resolve a complaint by filing an
appeal of a material supervisory determination or utilized any other Board
mechanisms for resolving complaints. Retaliation includes, but is not limited
to, delaying or denying action that might benefit a supervised person without a
sound supervisory reason or subjecting a supervised institution to heightened
examination standards without a sound supervisory reason.
The Ombudsman is authorized to receive, review, and determine the merits of
complaints of retaliatory conduct by Reserve Bank or Board staff. The
Ombudsman may attempt to resolve retaliation claims informally by engaging
in discussions with the concerned supervised person and the appropriate Board
or Reserve Bank staff. If a complaint cannot be resolved informally, the
Ombudsman may initiate a full investigation into the underlying facts and
circumstances
erits of
complaints of retaliatory conduct by Reserve Bank or Board staff. The
Ombudsman may attempt to resolve retaliation claims informally by engaging
in discussions with the concerned supervised person and the appropriate Board
or Reserve Bank staff. If a complaint cannot be resolved informally, the
Ombudsman may initiate a full investigation into the underlying facts and
circumstances.
To commence a factual investigation of a complaint of retaliatory conduct, the
Ombudsman should provide written notice to the appropriate Board committee
and division director and the appropriate Reserve Bank officer in charge of
supervision. As part of the investigation, the Ombudsman may, among other
things, collect and review documents, interview witnesses, and seek any other

Page 14 of 16

relevant information. The Ombudsman may also consult Board and Reserve
Bank staff with subject matter expertise. Where necessary, the appropriate
Board committee or division director may authorize or assign such additional
resources as may be needed to assist the Ombudsman in fully reviewing the
matter.
Upon completion of the factual investigation of a complaint of retaliatory
conduct, the Ombudsman will decide whether a member of Federal Reserve
System staff retaliated, as defined above. The Ombudsman will report this
determination to the appropriate Board committee or Governor and division
director and the appropriate Reserve Bank officer in charge of supervision and
may make recommendations for resolution of the matter to those parties. In
addition, to prevent future retaliation for an appeal, the Ombudsman may
recommend to the appropriate division director(s) that the next examination of
the institution or review that may lead to a material supervisory determination
exclude personnel involved in the claim of retaliation. The division director(s)
will make the final decision as to whether any examination staff should be
excluded
ddition, to prevent future retaliation for an appeal, the Ombudsman may
recommend to the appropriate division director(s) that the next examination of
the institution or review that may lead to a material supervisory determination
exclude personnel involved in the claim of retaliation. The division director(s)
will make the final decision as to whether any examination staff should be
excluded. However, the Ombudsman shall not make recommendations
regarding disciplinary action against a Federal Reserve System staff member.
The appropriate staff will consider further action consistent with the Board’s
and relevant Reserve Bank’s policies and procedures. The Ombudsman’s
determination regarding retaliation will be communicated in writing to the
supervised person.
To further ensure that supervised persons are not subjected to retaliation, as
defined above, the Ombudsman will contact a supervised institution within six
months after an appeal has been decided to inquire whether the institution
believes retaliation occurred. Where possible, the Ombudsman will also
contact the institution after the next examination following an appeal. In the
event an institution complains of retaliation, the Ombudsman will initiate the
process outlined above to informally review the matter or initiate a factual
investigation.
Consumer Complaints and Appeals. Independent of the Ombudsman
function, the Federal Reserve System operates a consumer complaint and
inquiry program to assist members of the public who are experiencing problems
with their financial institution. If the Ombudsman receives a consumer
complaint directly, the Ombudsman will refer the complaint to the Board’s
Division of Consumer and Community Affairs (“DCCA”) to determine
als. Independent of the Ombudsman
function, the Federal Reserve System operates a consumer complaint and
inquiry program to assist members of the public who are experiencing problems
with their financial institution. If the Ombudsman receives a consumer
complaint directly, the Ombudsman will refer the complaint to the Board’s
Division of Consumer and Community Affairs (“DCCA”) to determine

Page 15 of 16

handling and send appropriate consumer complaints to the Federal Reserve
Consumer Help Center (“FRCH”) for processing.
A request for an independent review of a consumer complaint previously
investigated by a Reserve Bank is treated as an appeal. Consumers should be
advised that they can file an appeal through FRCH or with the Ombudsman if
the consumer requests confidential treatment of the appeal or prefers that the
Ombudsman handle the appeal.
If an appeal is received by the Ombudsman, he or she will consult with DCCA
to determine who will handle the appeal, unless the consumer has requested
confidential treatment or that the Ombudsman’s Office handle the appeal. In
many instances, DCCA will be responsible for investigating and responding to
the appeal. For the appeals referred to DCCA by the Ombudsman, DCCA will
consult with the Ombudsman during the appeal investigation to help ensure that
the matter is fully and fairly addressed and provide a final copy of the response
letter to the Ombudsman.
The Ombudsman handles appeals seeking further investigation of DCCA’s
handling of an initial appeal, appeals where the consumer requests confidential
treatment, and appeals where the consumer requests that the Ombudsman’s
Office handle the initial appeal. The Ombudsman may handle other appeals, as
determined in collaboration with DCCA. The Ombudsman will send an
acknowledgement letter for each appeal it receives
appeals seeking further investigation of DCCA’s
handling of an initial appeal, appeals where the consumer requests confidential
treatment, and appeals where the consumer requests that the Ombudsman’s
Office handle the initial appeal. The Ombudsman may handle other appeals, as
determined in collaboration with DCCA. The Ombudsman will send an
acknowledgement letter for each appeal it receives.
With respect to appeals seeking further investigation of DCCA’s handling of an
initial appeal or where the consumer requests that the Ombudsman handle the
appeal, the Ombudsman will typically consult with DCCA during the
investigation. For appeals where the consumer requests confidential treatment,
the Ombudsman typically will not consult with DCCA during the investigation.
For all appeals the Ombudsman handles, the Ombudsman will review the
matter. In doing so, the Ombudsman will collect and review the complaint
documents from DCCA and seek any other relevant information, unless
confidential treatment is requested. The Ombudsman may also consult Board
and Reserve Bank staff to discuss the details of the previous complaint
investigations. The Ombudsman is responsible for responding to the
complainant with its determination. As appropriate, the Ombudsman will
contact the appropriate Board division director and Reserve Bank staff with
feedback or concerns.

Page 16 of 16

Safeguards. These policies, processes, and practices are intended as safeguards
to encourage complainants to come forward with issues or complaints related to
the Federal Reserve System’s supervisory activities.
To the extent possible, the Ombudsman will honor requests to keep confidential
the identity of a complaining party. It must be recognized, however, that it may
not be possible for the Ombudsman to resolve certain complaints, including
complaints of retaliation, if the Ombudsman cannot disclose the identity of the
complaining party to other members of Federal Reserve staff.
Procedures
ies.
To the extent possible, the Ombudsman will honor requests to keep confidential
the identity of a complaining party. It must be recognized, however, that it may
not be possible for the Ombudsman to resolve certain complaints, including
complaints of retaliation, if the Ombudsman cannot disclose the identity of the
complaining party to other members of Federal Reserve staff.
Procedures. A party may contact the Ombudsman at any time regarding
concerns or issues resulting from the regulatory activities of the Board or the
Reserve Banks by calling 1-800-337-0429, by sending a fax to 202-530-6208,
by writing to the Office of the Ombudsman, Board of Governors of the Federal
Reserve System, Washington, D.C. 20551, or by sending an email to
Ombudsman@frb.gov.

By order of the Board of Governors of the Federal Reserve System, March 12, 2020.

/s/Ann Misback,
Secretary of the Board.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/statutes/FRB_SR2028. Check the current official text before relying on it. Not legal advice.