NYLIB Submits Letter to President Joseph Biden

On June 12, 2024, NYLIB submitted a letter to President Joseph Biden recommending that the President immediately nominate a new FDIC Chairman and that FDIC Chairman Gruenberg immediately resign. Please read the full letter below.

Advocacy

FDIC Chairman Responds to NYLIB TDR Letter

On July 6, 2020, NYLIB President Edward Lutz sent a letter to members of Congress, the prudential banking agencies, and the Financial Standards Accounting Board (“FASB”) concerning accounting for troubled debt restructurings (“TDRs”) in light of the COVID-19 pandemic. 

On July 10, 2020, FDIC Chairman Jelena McWilliams responded in a letter thanking NYLIB for sharing its “concerns on this important matter and for offering to serve as a resource” and noting that the FDIC continues “to explore further opportunities to ensure that banks can continue serving their customers during this difficult time.”

Builders Bank Update: NYLIB Submits Additional Authority Supporting Option to Challenge “CAMELS” Ratings in Federal Court

On October 23, 2017, the court in Builders Bank v. FDIC granted the New York League of Independent Bankers ("NYLIB") approval to file additional authority in support of its September 13, 2017 friend-of-the-court brief.

The case concerns whether the federal financial regulatory agencies' "CAMELS" ratings are reviewable in federal court. The FDIC's position, expressed in its July 2017 comments to its intra-agency appeals guidelines, is that CAMELS ratings are never reviewable by the federal courts because there is no meaningful source of law to apply to review the FDIC's exercise of discretion in assessing the ratings.

NYLIB's motion points out that a sister agency, the National Credit Union Administration ("NCUA"), has put forth a contradictory view of the appealability of CAMELS ratings (or in the NCUA's case, "CAMEL" ratings).  In a May 2017 intra-agency appeal decision, the NCUA Board explicitly acknowledged that its decisions upholding CAMEL ratings after an intra-agency appeal are reviewable by the federal courts. NYLIB submitted the NCUA Board decision to the Builders Bank court as additional, persuasive authority supporting its position that there in fact are standards by which the federal courts may review CAMELS ratings.

NYLIB Supports Option for Financial Institutions to Challenge "CAMELS" Ratings

NYLIB has joined other banking industry organizations in filing a friend-of-the-court brief in Builders Bank v. FDIC regarding whether the federal financial regulatory agencies' "CAMELS" ratings are reviewable in federal court. Our organization believes the support of this matter is important to ensure that banks have the ability to challenge ratings they feel are undeserved and to ensure that the power of the federal regulatory agencies does not go unchecked. Click here to read the amicus brief. 

A Look at the Issues    

Builders Bank brought suit in federal court challenging the composite rating of "4" assigned to it by the FDIC and sought a reversal of that rating along with a refund of the excess deposit insurance premiums it incurred due to the rating.

In response, the FDIC sought to dismiss Builders Bank's suit, arguing that a CAMELS rating is not reviewable in federal court unless a financial institution first obtains review of the rating through the FDIC's intra-agency appeals process. The FDIC's motion to dismiss further contended that, even if an institution prosecutes an intra-agency appeal, CAMELS ratings are never reviewable by the federal courts because there is no meaningful source of law to apply to review the FDIC's exercise of discretion in assessing CAMELS ratings.

NYLIB's amicus brief challenges both of these contentions. Pinchus D. Raice, Co-Chair of Pryor Cashman's Financial Institution Group, explained, "While the federal financial regulatory agencies' intra-agency appeals processes can provide a useful method of challenging unwarranted CAMELS ratings, no statute or regulation requires financial institutions that have been assigned unwarranted CAMELS ratings to utilize the agencies' intra-agency appeals processes. Under appropriate circumstances, a financial institution should have the option to seek review of a CAMELS rating in federal court — whether or not the institution has chosen to utilize the examining agency's intra-agency appeals process." 

Banking Industry Support    

Sarah Ciopyk, NYLIB's Executive Director, commented, "It is important to provide an industry viewpoint on complex legal and regulatory issues that have a systemic, industry-wide impact, and NYLIB appreciates the opportunity to make its voice heard on the important issues before the Court in Builders Bank v. FDIC. NYLIB hopes that its amicus brief will be of assistance to the Court."  

The Clearing House Association, the American Bankers Association, and the Independent Community Bankers of America also previously submitted a joint amicus brief in the case.