Compliance Bulletin

Court May Hear Challenge to its Assigned CAMELS Rating
March 6, 2017

After the FDIC assigned a composite CAMELS “4” supervisory rating to Builders Bank in Illinois, the $100 million asset bank sued the FDIC in federal court arguing that the agency should have given it a “3” rating instead. The federal district court dismissed the bank’s suit for lack of jurisdiction on the grounds that the FDIC’s determination of a bank’s minimal capital requirements is not reviewable under federal law. Builders Bank was undeterred and appealed the decision to the federal Seventh Circuit Court of Appeals. The Seventh Circuit court reversed, noting that the supervisory CAMELS rating is comprised of several components in addition to capital. As long as the FDIC’s determination is a final agency action and the bank had exhausted its available administrative remedies, the FDIC’s determination is reviewable by a court. The case is Builders Bank v. FDIC

See CBA’s Regulatory Compliance Bulletin for more information.

Commands