What happens when the Cleveland Fed finds something concerning with the financial performance of an institution?
Sometimes a “memorandum of understanding” is issued. This is an informal but severe action for which the member bank’s board of directors agrees to address the deficiencies identified by making the specific changes outlined in the memorandum as soon as possible. The Board of Governors can also administer formal actions, including cease-and-desist orders and civil monetary penalties.
Can a financial institution appeal a supervisory determination?
Financial institutions may contact the Ombuds regarding the appeals process for material supervisory determinations.
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 Ombuds policy. 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.
Learn more about this process and how to appeal a material supervisory determination of your financial institution in SR 20-28 / CA 20-14 Supervision and Regulation Letters.