The Federal Reserve Board Adopts Several NYLIB Recommendations in Its Final Intra-Agency Appeals Guidelines

On April 30, 2018, the New York League of Independent Bankers submitted comments through Pryor Cashman LLP to the Board of Governors of the Federal Reserve System (“Board”). The comments regarded proposed amendments to the Board’s Guidelines for Appeals of Material Supervisory Determinations, which allow for appeals of material supervisory determinations such as CAMELS and ROCA ratings. NYLIB’s comments focused on aspects of the proposed amendments concerning filing deadlines, the record provided to the final review panel, the composition of the final review panel, and the standard of review applied by the final review panel.

The Board issued its final appeals guidelines on March 17, 2020. The final guidelines adopt several of NYLIB’s recommendations.  Specifically, the final guidelines include the following changes responsive to NYLIB’s comments: 

• The final guidelines acknowledge that financial institutions can request extensions of appeals deadlines in appropriate circumstances; 

• The final guidelines provide greater specificity regarding the calculation of appeals deadlines (i.e., days are calendar days and a final deadline cannot fall on a weekend or federal holiday); 

• The final guidelines require the initial review panel to precisely identify the information upon which it relied in reaching its conclusion, and also require it to promptly provide such information to the institution upon the institution’s request to the extent permitted by law.

Pinchus Raice, the co-founder of NYLIB and one of the Pryor Cashman co-authors of NYLIB’s submission, offered the following comments on the final guidelines:

“Given that the Board’s deadline for submitting an intra-agency appeal is extremely short (30 days from the date of the relevant material supervisory determination), it was critical that the Board allow financial institutions to request extensions of appeals deadlines in appropriate circumstances. Equally important, the Board’s decision to allow appealing financial institutions to review and respond to the evidence relied upon by the initial appeals panel in their second-level appeals to the final review panel will greatly strengthen the integrity of the appeals process and lead to better and more informed decision-making by the final review panel.”

NYLIB President Ed Lutz offered the following comments: 

“It is gratifying to see that the Federal Reserve Board thoughtfully considered and responded to NYLIB’s comments on its proposed appeals guidelines. The Board’s intra-agency appeals process offers financial institutions an avenue to challenge material supervisory determinations, such as CAMELS and ROCA ratings (and, as the Board has clarified in its final appeals guidelines, MRAs and MRIAs).  NYLIB would like to thank Pryor Cashman for submitting a strong comment letter on NYLIB’s behalf that resulted in industry-friendly changes. The Board’s thoughtful response to NYLIB’s comment letter demonstrates that NYLIB fulfills an important role in giving a collective voice to independent financial institutions.”

NYLIB Announces New President Edward T. Lutz

Edward T. Lutz, President of the New York League of Independent Bankers

NYLIB is pleased to announce that Edward T. Lutz, a lifelong pioneer in the banking industry, has agreed to accept the position of President of NYLIB. Outgoing President Casey Christopher, the newest addition to ICBA’s Member Relations Team, will remain involved in the organization as a pivotal member of NYLIB’s newly formed Board of Directors.

Ed will continue the organization’s original mission of leading advocacy efforts, growing membership, developing educational programs, and acting as a voice for independent financial institutions across the tri-state area.

Ed has enjoyed a banking career of over 50 years, most recently serving as President and Chief Executive Officer of Greater Hudson Bank which was sold to ConnectOne Bank in 2018. He has served as director of three community banks (and served as Audit Committee Chairman in two of them) and has provided advice on strategic and regulatory matters as a strategic consultant during that time. Ed began his career as an Assistant Bank Examiner with the FDIC and subsequently rose through the ranks to serve as Regional Director of the FDIC’s New York Region for four years.

Mr. Lutz stated, “It is indeed humbling and exciting to be asked to pick up the mantle of leadership at NYLIB from Casey and her predecessors. I firmly believe NYLIB fills a valuable niche in bringing bankers together to discuss industry issues and to hear from industry experts and public officials. I look forward to working with the NYLIB team and its membership as we look to expand our reach and bring value to all our constituents.”

Pinchus Raice, NYLIB Co-Founder and Co-Chairman of Pryor Cashman’s Financial Institutions Group, added: “Ed Lutz brings unique industry experience, having served as senior banking regulator, bank director, and as President and CEO of a community bank. He has seen community banking from all perspectives and has been a first-hand witness to the industry’s ebbs and flows over the last 50 years. His experience and expertise will be invaluable to the organization and we are thrilled as he leads us to NYLIB’s next chapter.”

Community Banking Veteran Casey Christopher Named NYLIB President

The New York League of Independent Bankers (NYLIB) is pleased to announce that Casey Christopher, First Vice President and Business Development Officer of CenterState Bank’s Correspondent Division, has joined NYLIB as President. She will be tasked with leading advocacy efforts, growing membership, developing educational programs, and organizing a voice for local, independent financial institutions across New York City.

At CenterState Bank, a publicly traded commercial bank with over $12 billion in assets based in Winter Haven, Florida, Christopher manages a customer portfolio of over 200 community banks, and she plans to utilize this vast network to inform NYLIB’s philosophy on future advocacy and programming initiatives.

“Casey has her finger on the pulse of what community banks need and knows what keeps them up at night. This kind of knowledge is critical as NYLIB continues to grow in size, scale, and relevance,” said Pinchus Raice, Co-Founder of NYLIB and Co-Chair of Pryor Cashman’s Financial Institutions Group.

Christopher is an active member of the Florida Bankers Association, New Jersey Bankers Association, Financial Women’s Association of NY, Financial Managers Society of NY/NJ, and the Junior League of Bergen County. She is a co-founding member of the Florida Bankers Association’s Annual Florida Women in Banking Conference and currently serves on the Junior League of Bergen County Board as their Membership VP, as well as on the Ohio University Alumni Association’s Board of Directors, where she sits on the Board of Trustees and is Chairwoman of the National Alumni Board (2018-2020). 

Board Member Phil Gonzalez added, “Casey’s depth and knowledge of the community banking world will reap significant rewards for NYLIB both today and well into the future.”

“NYLIB has a wonderful opportunity to foster change through their strength in numbers. They count some of the top community banks in the state among their ranks, and I am thrilled to lead them as we forge a new chapter in the association’s history,” said Christopher.

Christopher was awarded The Dr. C. Arnold Matthews Honor Graduate Award in 2012 at the 43rd Annual Florida School of Banking, which was established to recognize a graduating senior who achieved the highest standard of excellence during their attendance.  She is also a 2015 graduate of The Graduate School of Banking at Louisiana State University and a 2002 graduate of Ohio University.

The New York League of Independent Bankers (NYLIB) Submits Comments Regarding Proposed Amendments to the Federal Reserve’s Guidelines for Intra-Agency Appeals

On April 30, 2018, The New York League of Independent Bankers (“NYLIB”) submitted comments to the Board of Governors of the Federal Reserve System (“Board”). The comments regarded proposed amendments to the Board’s Guidelines for Appeals of Material Supervisory Determinations, which allow for appeals of material supervisory determinations such as CAMELS and ROCA ratings. 

NYLIB’s comments focused on aspects of the proposed amendments concerning filing deadlines, the record provided to the final review panel, the composition of the final review panel, and the standard of review applied by the final review panel. Specifically, NYLIB recommended that:

• The Board should continue to acknowledge that extensions of the 30-day initial appeal deadline may be granted in appropriate circumstances, rather than eliminating the reference to extensions found in the current Guidelines;

• The Board should continue to allow 30 days to appeal from a decision of the initial review panel, rather than reducing the time period allowed for financial institutions to appeal from the decision of the initial review panel from 30 days to 14 days;  

• The Board should incorporate a method for the construction of time limits that addresses issues such as the consequences of filing deadlines falling on weekends and holidays;

• The Board should provide that “the record upon which the initial appeal panel made its decision” that is provided to the final review panel will also be provided to the appealing financial institution;

• The Board should provide that the final level of review is performed by the Ombudsman or the Board, not a panel of staff hand-picked by the “director of the appropriate division of the Board” for the specific appeal; and  

• The Board should provide that the final review panel’s review is de novo, rather than deferential to the decision of an initial review panel drawn from the Reserve Bank that made the material supervisory determination(s) being appealed.

Pinchus Raice, Co-Founder of NYLIB, offered the following comments on NYLIB’s recommendations:

Some aspects of the Board’s proposed amendments took a step backward, rather than a step forwards, from the perspective of financial institutions. The Board should not amend its Guidelines in a manner that makes it more difficult for financial institutions to file intra-agency appeals, nor should it seek to reduce the independence of the appeals process. Adopting NYLIB’s well-reasoned recommendations would enhance the effectiveness of the Board’s appeals process, lead to better decision-making, and increase the confidence of financial institutions in the integrity and independence of the appeals process. 

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.