FDIC Appeals Panel for Bank Exams Unlikely to Boost Challenges (Corrected)

Banks likely will remain hesitant to challenge Federal Deposit Insurance Corp. examination findings despite the agency’s recent proposal to create an independent body to review appeals.

The FDIC has made several changes in recent years to try to get more banks to challenge “material supervisory determinations” such as overall examination ratings, the adequacy of loan loss reserves, and loan classifications. The number of appeals has stayed depressed because of procedural hurdles and banks’ perception that the reviews aren’t independent.

While the proposed new appeals office would be independent from other divisions of the FDIC, it won’t address banks’ other longstanding ...