By the Division of Banks
1.0 APPLICABILITY AND SCOPE
This bulletin applies to all entities examined by the Division of Banks (Division), including banks, credit unions, limited purpose trust companies, licensees, and registrants.
2.0 RATINGS SUBJECT TO APPEAL
An entity may appeal any 3, 4, or 5 risk management, financial, or consumer protection compliance rating. In the case of Community Reinvestment Act (CRA) examinations for banks or credit unions and CRA for Mortgage Lenders examinations (also known as Mortgage Lender Community Investment, or MLCI) , an entity may appeal a composite performance rating of Needs to Improve or Substantial Noncompliance.
3.0 PRELIMINARY FINDINGS
It is the Division’s standard practice for examiners and field managers to discuss preliminary findings and proposed rating(s) with the examined entity prior to completing the examination. An examined entity that disagrees with any proposed rating(s) is encouraged to fully engage in such discussions and to present information to the Division’s examiners supporting its position. The examiner shall make note of any disputed rating(s) in the draft report of examination. The examination will be reviewed by the Division's senior management together with the noted disagreement(s) prior to the issuance of the final report of examination.
4.0 EXAMINATION RATING APPEAL PROCESS
An entity may appeal the disputed rating(s) by submitting a written appeal, including all supporting documentation, within 45 calendar days of the receipt of the report of examination. However, appeal of a CRA or MLCI rating must be filed within 30 business days of receipt of the report of examination to ensure the appeal is received prior to the Division’s disclosure of the public section of the report, as required by regulation.
The formal appeal must include the word “appeal,” as well as a statement that the appeal was approved by the board of directors/trustees or principals. The Division will only consider appeals submitted within the required timeframes that include: supporting documentation; a detailed description of issues in dispute; and the entity’s arguments regarding the desired resolution. The procedures set forth in this Bulletin shall not create any substantive or procedural rights or defenses under M.G.L. c. 30A or any other applicable law.
A Division senior manager who is not directly involved with the particular examination will be appointed to conduct a thorough and impartial review of the matter(s) being appealed. This review may include further communication with the examination unit managers, examiners, and the examined entity to ensure full understanding of all facts. Upon conclusion of the review, the manager's findings will be summarized and presented with a recommendation to the Division's Policy Group. The Policy Group is comprised of members of senior management, including the Commissioner. The Policy Group will make the ultimate determination whether a change is warranted. The Commissioner will then provide the entity with a final written decision. The Division will make its best effort to complete its review within 45 business days of receipt of the appeal. However, the time period may be extended if necessary.
It is important to emphasize that the Division does not tolerate acts or threats of retaliation by any of its staff members relative to an examination rating appeal or any other matter involving its regulated entities.
5.0 JOINT EXAMINATIONS
If an entity appeals an examination that the Division conducted jointly with one or more federal or state regulatory authority(ies), the Division will promptly notify the appropriate regulatory authority of the appeal request, provide the regulatory authority with a copy of the institution's request for review and any other related materials, and solicit the regulatory authority's views regarding the merits of the appeal request before making a determination. Each regulatory authority will follow its own appeals process but will coordinate closely to maximize efficiency and streamline the process where possible.
6.0 HISTORICAL NOTES
The information in this bulletin was formerly contained within Regulatory Bulletin 1.1-101 Examination Policies and Procedures.
G.L. c. 93, §§ 24-28; G.L. c. 167, § 2; G.L. c. 140, §§ 96-114A; G.L. c. 169; G.L. c. 169A; G.L. c. 255B; G.L. c. 255C; G.L. c. 255D; G.L. c. 255E; and G.L. c. 255F