[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 8071 Introduced in House (IH)]
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118th CONGRESS
2d Session
H. R. 8071
To amend the Federal Financial Institutions Examination Council Act of
1978 to improve the examination of depository institutions, and for
other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
April 18, 2024
Mr. Hill (for himself and Mr. David Scott of Georgia) introduced the
following bill; which was referred to the Committee on Financial
Services
_______________________________________________________________________
A BILL
To amend the Federal Financial Institutions Examination Council Act of
1978 to improve the examination of depository institutions, and for
other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Fair Audits and Inspections for
Regulators' Exams Act''.
SEC. 2. TIMELINESS OF EXAMINATION REPORTS.
The Federal Financial Institutions Examination Council Act of 1978
(12 U.S.C. 3301 et seq.) is amended by adding at the end the following:
``SEC. 1012. TIMELINESS OF EXAMINATION REPORTS.
``(a) In General.--
``(1) Final examination report.--A Federal financial
institutions regulatory agency shall provide a final
examination report to a financial institution not later than 60
days after the later of--
``(A) the exit interview for an examination of the
institution; or
``(B) the provision of additional material
information by the institution relating to the
examination.
``(2) Exit interview.--If a financial institution is not
subject to a resident examiner program, the exit interview
shall occur not later than the end of the 9-month period
beginning on the commencement of the examination, except that
such period may be extended by the Federal financial
institutions regulatory agency by providing written notice to
the institution and the Director describing with particularity
the reasons that a longer period is needed to complete the
examination.
``(b) Examination Materials.--Upon the request of a financial
institution, the Federal financial institutions regulatory agency shall
include with the final report an appendix listing all examination or
other factual information relied upon by the agency in support of a
material supervisory determination.''.
SEC. 3. INDEPENDENT EXAMINATION REVIEW DIRECTOR.
(a) In General.--The Federal Financial Institutions Examination
Council Act of 1978 (12 U.S.C. 3301 et seq.), as amended by section 2
of this Act, is further amended by adding at the end the following:
``SEC. 1013. OFFICE OF INDEPENDENT EXAMINATION REVIEW.
``(a) Establishment.--There is established in the Council an Office
of Independent Examination Review.
``(b) Head of Office.--There is established the position of the
Independent Examination Review Director, as the head of the Office of
Independent Examination Review. The Director shall be appointed by the
Federal Financial Institutions Examination Council.
``(c) Staffing.--The Director is authorized to hire staff to
support the activities of the Office of Independent Examination Review.
One-fourth of the costs and expenses of the Office, including the
salaries of its employees, shall be paid by each of the Federal
financial institutions regulatory agencies. Annual assessments for such
share shall be levied by the Council based upon its projected budget
for the year, and additional assessments may be made during the year if
necessary.
``(d) Duties.--The Director shall--
``(1) receive and, at the discretion of the Director,
investigate complaints from financial institutions, their
representatives, or another entity acting on behalf of such
institutions, concerning examinations, examination practices,
or examination reports;
``(2) hold meetings, at least once every three months and
in locations designed to encourage participation from all
sections of the United States, with financial institutions,
their representatives, or another entity acting on behalf of
such institutions, to discuss examination procedures,
examination practices, or examination policies;
``(3) review examination procedures of the Federal
financial institutions regulatory agencies to ensure that the
written examination policies of those agencies are being
followed in practice and adhere to the standards for
consistency, which shall be established, after notice and
opportunity for comment, by the Council not later than 90 days
after the date of enactment of this section;
``(4) conduct a continuing and regular program of
examination quality assurance for all examination types
conducted by the Federal financial institutions regulatory
agencies;
``(5) adjudicate any supervisory appeal initiated under
section 1014; and
``(6) report annually to the Committee on Financial
Services of the House of Representatives, the Committee on
Banking, Housing, and Urban Affairs of the Senate, and the
Council, on the reviews carried out pursuant to paragraphs (3)
and (4), including compliance with the requirements set forth
in section 1012 regarding timeliness of examination reports,
and the Council's recommendations for improvements in
examination procedures, practices, and policies.
``(e) Confidentiality.--The Director shall keep confidential all
meetings, discussions, and information provided by financial
institutions. The Council shall keep confidential all information and
communications exchanged by a financial institution and the Office of
Independent Examination Review.''.
(b) Definition.--Section 1003 of the Federal Financial Institutions
Examination Council Act of 1978 (12 U.S.C. 3302) is amended--
(1) in paragraph (2), by striking ``and'' at the end;
(2) in paragraph (3), by adding ``and'' at the end; and
(3) by adding at the end the following:
``(4) the term `Director' means the Independent Examination
Review Director established under section 1013(a) and (b).''.
SEC. 4. RIGHT TO INDEPENDENT REVIEW OF MATERIAL SUPERVISORY
DETERMINATIONS.
The Federal Financial Institutions Examination Council Act of 1978,
as amended by sections 2 and 3 of this Act, is further amended by
adding at the end the following:
``SEC. 1014. RIGHT TO INDEPENDENT REVIEW OF MATERIAL SUPERVISORY
DETERMINATIONS.
``(a) In General.--A financial institution shall have the right to
obtain an independent review of a material supervisory determination
contained in a final report of examination.
``(b) Notice.--
``(1) Timing.--A financial institution seeking review of a
material supervisory determination under this section shall
file a written notice with the Director within 60 days after
receiving the final report of examination that is the subject
of such review.
``(2) Identification of determination.--The written notice
shall identify the material supervisory determination that is
the subject of the independent examination review, and a
statement of the reasons why the institution believes that the
determination is incorrect or should otherwise be modified.
``(3) Information to be provided to institution.--Any
information relied upon by the agency in the final report that
is not in the possession of the financial institution may be
requested by the financial institution and shall be delivered
promptly by the agency to the financial institution.
``(c) Right to Hearing.--
``(1) In general.--The Director shall--
``(A) determine the merits of the appeal on the
record; or
``(B) at the election of the financial institution,
refer the appeal to an administrative law judge
appointed by the Council to conduct a hearing pursuant
to the procedures set forth under sections 556 and 557
of title 5, United States Code, which shall take place
not later than 60 days after the petition for review is
received by the Director.
``(2) Timing of decision.--An administrative law judge
conducting a hearing under paragraph (1)(B) shall issue a
proposed decision to the Director based upon the record
established at the hearing.
``(3) Standard of review.--In any hearing under this
subsection--
``(A) neither the administrative law judge nor the
Director shall defer to the opinions of the examiner or
agency, but shall independently determine the
appropriateness of the agency's decision based upon the
relevant statutes, regulations, other appropriate
guidance, and evidence presented at the hearing.
``(d) Final Decision.--A decision by the Director on an independent
review under this section shall--
``(1) be made not later than 60 days after the record has
been closed; and
``(2) be deemed final agency action and shall bind the
agency whose supervisory determination was the subject of the
review and the financial institution requesting the review.
``(e) Right to Judicial Review.--A financial institution shall have
the right to petition for review of the decision of the Director under
this section by filing a petition for review not later than 60 days
after the date on which the decision is made in the United States Court
of Appeals for the District of Columbia Circuit or the Circuit in which
the financial institution is located.
``(f) Report.--The Director shall report annually to the Committee
on Financial Services of the House of Representatives, the Committee on
Banking, Housing, and Urban Affairs of the Senate on actions taken
under this section, including the types of issues that the Director has
reviewed and the results of those reviews. In no case shall such a
report contain information about individual financial institutions or
any confidential or privileged information shared by financial
institutions.
``(g) Retaliation Prohibited.--A Federal financial institutions
regulatory agency may not--
``(1) retaliate against a financial institution, including
service providers, or any institution-affiliated party, for
exercising appellate rights under this section; or
``(2) delay or deny any agency action that would benefit a
financial institution or any institution-affiliated party on
the basis that an appeal under this section is pending under
this section.''.
SEC. 5. ADDITIONAL AMENDMENTS.
(a) Regulator Appeals Process, Ombudsman, and Alternative Dispute
Resolution.--
(1) In general.--Section 309 of the Riegle Community
Development and Regulatory Improvement Act of 1994 (12 U.S.C.
4806) is amended--
(A) in subsection (a), by inserting after
``appropriate Federal banking agency'' the following:
``, the Bureau of Consumer Financial Protection,'';
(B) in subsection (b)--
(i) by redesignating paragraphs (1) and (2)
as subparagraphs (A) and (B) and indenting
appropriately;
(ii) in the matter preceding subparagraph
(A) (as redesignated), by striking ``In
establishing'' and inserting ``(1) In
general.--In establishing'';
(iii) in paragraph (1)(B) (as
redesignated), by striking ``the appellant from
retaliation by agency examiners'' and inserting
``the insured depository institution or insured
credit union from retaliation by an agency
referred to in subsection (a)''; and
(iv) by adding at the end the following:
``(2) Retaliation.--For purposes of this subsection and
subsection (e), retaliation includes delaying consideration of,
or withholding approval of, any request, notice, or application
that otherwise would have been approved, but for the exercise
of the institution's or credit union's rights under this
section.'';
(C) in subsection (e)(2)--
(i) in subparagraph (B), by striking
``and'' at the end;
(ii) in subparagraph (C), by striking the
period and inserting ``; and''; and
(iii) by adding at the end the following:
``(D) ensure that appropriate safeguards exist for
protecting the insured depository institution or
insured credit union from retaliation by any agency
referred to in subsection (a) for exercising its rights
under this subsection.''; and
(D) in subsection (f)(1)(A)--
(i) in clause (ii), by striking ``; and''
and inserting a semicolon;
(ii) in clause (iii), by striking ``; and''
and inserting a semicolon; and
(iii) by adding at the end the following:
``(iv) any issue specifically listed in an
exam report as a matter requiring attention by
the institution's management or board of
directors; and
``(v) any suspension or removal of an
institution's status as eligible for expedited
processing of applications, requests, notices,
or filings on the grounds of a supervisory or
compliance concern, regardless of whether that
concern has been cited as a basis for a
material supervisory determination or matter
requiring attention in an examination report,
provided that the conduct at issue did not
involve violation of any criminal law; and''.
(2) Effect.--Nothing in this subsection affects the
authority of an appropriate Federal banking agency or the
National Credit Union Administration Board to take enforcement
or other supervisory action.
(b) Federal Credit Union Act.--Section 205(j) of the Federal Credit
Union Act (12 U.S.C. 1785(j)) is amended by inserting ``the Bureau of
Consumer Financial Protection,'' before ``the Administration'' each
place that term appears.
(c) Federal Financial Institutions Examination Council Act.--The
Federal Financial Institutions Examination Council Act of 1978 (12
U.S.C. 3301 et seq.), as amended by sections 2 through 4 of this Act,
is further amended--
(1) in section 1003 (12 U.S.C. 3302) by striking paragraph
(1) and inserting the following:
``(1) the term `Federal financial institutions regulatory
agencies'--
``(A) means the Office of the Comptroller of the
Currency, the Board of Governors of the Federal Reserve
System, the Federal Deposit Insurance Corporation, and
the National Credit Union Administration; and
``(B) includes the Bureau of Consumer Financial
Protection for purposes of sections 1012 through
1014;''; and
(2) in section 1005 (12 U.S.C. 3304), by striking ``One-
fifth'' and inserting ``One-fourth''.
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