[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 8264 Introduced in House (IH)]
<DOC>
118th CONGRESS
2d Session
H. R. 8264
To amend the Federal Deposit Insurance Act and the Federal Credit Union
Act to improve the timeliness of examination reports and other guidance
and to establish panels to oversee appeals from insured depository
institutions and insured credit unions of material supervisory
determinations, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
May 7, 2024
Mr. Barr introduced the following bill; which was referred to the
Committee on Financial Services
_______________________________________________________________________
A BILL
To amend the Federal Deposit Insurance Act and the Federal Credit Union
Act to improve the timeliness of examination reports and other guidance
and to establish panels to oversee appeals from insured depository
institutions and insured credit unions of material supervisory
determinations, 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 ``Bank Supervision Appeals Improvement
Act of 2024''.
SEC. 2. TIMELINESS OF EXAMINATIONS AND REQUIRED PERMISSION, REGULATORY,
AND REPORTING GUIDANCE.
(a) Exit Interview Requirement; Timeliness of Examinations.--
(1) Insured depository institutions.--Section 10(d) of the
Federal Deposit Insurance Act (12 U.S.C. 1820(d)) is amended by
adding at the end the following:
``(11) Examination timeliness.--The appropriate Federal
banking agency shall complete any examination of an insured
depository institution within 270 days of commencing the
examination, except that such period may be extended by the
appropriate Federal banking agency by providing written notice
to the insured depository institution describing with
particularity the reasons that a longer period is needed.
``(12) Exit interview requirement.--Within 30 days of
completing an examination, the appropriate Federal banking
agency shall conduct an exit interview with the insured
depository institution's senior management and board of
directors.
``(13) Timeliness of examination reports.--
``(A) Final examination report.--With respect to an
examination of an insured depository institution by an
appropriate Federal banking agency, the appropriate
Federal banking agency shall provide a final
examination report to the insured depository
institution not later than 60 days after the later of--
``(i) the exit interview for the
examination; or
``(ii) the provision of additional
information by the insured depository
institution relating to the examination.
``(B) Examination materials.--Upon the request of
an insured depository institution, the appropriate
Federal banking agency shall include with a final
examination report an appendix listing all materials
relied upon by the agency in support of all material
supervisory determinations.
``(C) Material supervisory determination defined.--
In this paragraph, the term `material supervisory
determination' has the meaning given such term in
section 309(i) of the Riegle Community Development and
Regulatory Improvement Act of 1994.''.
(2) Insured credit unions.--Section 204 of the Federal
Credit Union Act (12 U.S.C. 1784) is amended by adding at the
end the following:
``(h) Exit Interview Requirement; Timeliness of Examinations.--
``(1) Examination timeliness.--The Board shall complete any
examination of an insured credit union within 270 days of
commencing the examination, except that such period may be
extended by the Board by providing written notice to the
insured credit union describing with particularity the reasons
that a longer period is needed.
``(2) Exit interview requirement.--Within 30 days of
completing an examination, the Board shall conduct an exit
interview with the insured credit union's senior management and
board of directors.
``(3) Timeliness of examination reports.--
``(A) Final examination report.--With respect to an
examination of an insured credit union, the Board shall
provide a final examination report to the insured
credit union not later than 60 days after the later
of--
``(i) the exit interview for the
examination; or
``(ii) the provision of additional
information by the insured credit union
relating to the examination.
``(B) Examination materials.--Upon the request of
an insured credit union, the Board shall include with a
final examination report an appendix listing all
materials relied upon by the Board in support of all
material supervisory determinations.
``(C) Material supervisory determination defined.--
In this paragraph, the term `material supervisory
determination' has the meaning given such term in
section 309(i) of the Riegle Community Development and
Regulatory Improvement Act of 1994.''.
(b) Timeliness of Required Permission, Regulatory, and Reporting
Guidance.--
(1) Insured depository institutions.--Section 10 of the
Federal Deposit Insurance Act (12 U.S.C. 1820) is amended by
adding at the end the following:
``(l) Timeliness of Required Permission, Regulatory, and Reporting
Guidance.--
``(1) Request for permission or guidance.--An insured
depository institution may request a written determination by
the appropriate Federal banking agency of--
``(A) the agency's permission to take an action
where permission is mandated by regulation;
``(B) the agency's interpretation of a law or
regulation; and
``(C) the agency's interpretation of generally
accepted accounting principles or accounting
objectives, standards, and requirements under section
37.
``(2) Contents of request.--A request made under paragraph
(1) shall be in writing and contain--
``(A) the nature of the request;
``(B) applicable facts relating to the matter;
``(C) applicable law, regulation, or generally
accepted accounting principles relating to the matter;
and
``(D) a summary of the request.
``(3) Response to request.--A Federal banking agency
receiving a request under paragraph (1) shall, not later than
30 days after receiving the request--
``(A) provide the insured depository institution
making the request with written notification that the
agency received the request and stating whether the
request contains the information required under
paragraph (2); and
``(B) if the request does not contain the
information required under paragraph (2), provide the
insured depository institution with an explanation of
what information is missing.
``(4) Providing missing information.--If a Federal banking
agency informs the insured depository institution under
paragraph (3) that the request does not contain all the
information required under paragraph (2), the insured
depository institution may provide the missing information to
the Federal banking agency during the 30-day period beginning
on the date the insured depository institution receives the
explanation of the missing information under paragraph (3).
``(5) Determination.--A Federal banking agency receiving a
request under paragraph (1) shall make a determination on the
request and provide the insured depository institution with a
written notice of such determination--
``(A) if the initial request contains the
information required under paragraph (2), not later
than the end of the 60-day period beginning on the date
the Federal banking agency notifies the insured
depository institution of the receipt of the request
under paragraph (3); or
``(B) if the initial request does not contain the
information required under paragraph (2)--
``(i) not later than the end of the 60-day
period beginning on the date that the insured
depository institution provides the Federal
banking agency with the missing information
under paragraph (4); or
``(ii) if the insured depository
institution does not provide the Federal
banking agency with the missing information
within the 30-day period described under
paragraph (4), not later than the end of the
60-day period beginning on the end of such 30-
day period.
``(6) Reports and publication.--Each Federal banking agency
shall, within 120 days after making a determination under
paragraph (5), publish a summary of the determination. Each
Federal banking agency shall redact any confidential
supervisory information about the insured depository
institution, any identifying facts about the institution, and
any sensitive personally identifiable information.''.
(2) Insured credit unions.--Section 209 of the Federal
Credit Union Act (12 U.S.C. 1789) is amended by adding at the
end the following:
``(c) Timeliness of Required Permission, Regulatory, and Reporting
Guidance.--
``(1) Request for permission or guidance.--An insured
credit union may request a written determination by the Board
of--
``(A) the Board's permission to take an action
where permission is mandated by regulation;
``(B) the Board's interpretation of a law or
regulation; and
``(C) the Board's interpretation of generally
accepted accounting principles or other accounting
objectives, standards, and requirements.
``(2) Contents of request.--A request made under paragraph
(1) shall be in writing and contain--
``(A) the nature of the request;
``(B) applicable facts relating to the matter;
``(C) applicable law, regulation, or generally
accepted accounting principles relating to the matter;
and
``(D) a summary of the request.
``(3) Response to request.--The Board, upon receiving a
request under paragraph (1) shall, not later than 30 days after
receiving the request--
``(A) provide the insured credit union making the
request with written notification that the Board
received the request and stating whether the request
contains the information required under paragraph (2);
and
``(B) if the request does not contain the
information required under paragraph (2), provide the
insured credit union with an explanation of what
information is missing.
``(4) Providing missing information.--If the Board informs
the insured credit union under paragraph (3) that the request
does not contain all the information required under paragraph
(2), the insured credit union may provide the missing
information to the Board during the 30-day period beginning on
the date the insured credit union receives the explanation of
the missing information under paragraph (3).
``(5) Determination.--The Board shall make a determination
on a request made under paragraph (1) and provide the insured
credit union with a written notice of such determination--
``(A) if the initial request contains the
information required under paragraph (2), not later
than the end of the 60-day period beginning on the date
the Board notifies the insured credit union of the
receipt of the request under paragraph (3); or
``(B) if the initial request does not contain the
information required under paragraph (2)--
``(i) not later than the end of the 60-day
period beginning on the date that the insured
credit union provides the Board with the
missing information under paragraph (4); or
``(ii) if the insured credit union does not
provide the Board with the missing information
within the 30-day period described under
paragraph (4), not later than the end of the
60-day period beginning on the end of such 30-
day period.
``(6) Reports and publication.--The Board shall, within 120
days after making a determination under paragraph (5), publish
a summary of the determination. The Board shall redact any
confidential supervisory information about the insured credit
union, any identifying facts about the credit union, and any
sensitive personally identifiable information.''.
SEC. 3. UPDATE OF INDEPENDENT INTRA-AGENCY APPELLATE PROCESS FOR
REVIEWING MATERIAL SUPERVISORY DETERMINATIONS.
(a) Update of Independent Intra-Agency Appellate Process.--Not
later than 180 days after the date of enactment of this Act, the Board
of Governors of the Federal Reserve System, the Comptroller of the
Currency, the Federal Deposit Insurance Corporation Board, and the
National Credit Union Administration Board shall revise the independent
intra-agency appellate process required under section 309(a) of the
Riegle Community Development and Regulatory Improvement Act of 1994 (12
U.S.C. 4806(a)).
(b) Office of Supervisory Appeals; Appeals Process.--Section 309 of
the Riegle Community Development and Regulatory Improvement Act of 1994
(12 U.S.C. 4806) is amended--
(1) by redesignating subsection (f) as subsection (i); and
(2) by inserting after subsection (e) the following:
``(f) Office of Supervisory Appeals.--The Federal banking agencies
and the National Credit Union Administration shall each establish an
Office of Supervisory Appeals to carry out the independent intra-agency
appellate process required under this section.
``(g) Appeals Officials.--
``(1) Appointment.--The head of each of the Federal banking
agencies and the National Credit Union Administration shall
appoint appeals officials, in a number sufficient to fully
staff the panels described under subsection (h), from among the
following classes of individuals:
``(A) Individuals who have financial institutions
regulatory agency experience.
``(B) Individuals who--
``(i) are a licensed attorney or a
certified public accountant authorized to
practice under the laws of a State, the
District of Columbia, or a territory of the
United States;
``(ii) have either academic or private
sector experience;
``(iii) have relevant subject matter
knowledge or work-related experience in the
financial services sector, as determined by the
agency making the appointment; and
``(iv) are not, and were not during the
previous 10-year period, employed by a Federal
banking agency, a Federal reserve bank, or the
National Credit Union Administration.
``(C) Individuals--
``(i) with at least 10 years private sector
financial services senior management-level
experience; and
``(ii) recommended by--
``(I) an insured depository
institution;
``(II) an insured credit union; or
``(III) a trade association for
such institutions or credit unions.
``(2) Term.--
``(A) In general.--Each appeals official appointed
under paragraph (1) shall serve for a term of 3 years.
``(B) Term limitation.--No individual may be
appointed under paragraph (1) to serve more than 2 full
terms.
``(C) Dismissal.--An appeals official appointed
under paragraph (1) may be removed at any time by the
appointing agency.
``(h) Appeals Process and Panel Hearing of Material Supervisory
Determinations.--
``(1) Appeal to the head of supervision.--
``(A) In general.--An institution seeking an appeal
of a material supervisory determination shall--
``(i) file a written appeal to the head of
supervision for the agency not later than 30
days after receiving the material supervisory
determination from the agency; and
``(ii) include in the appeal--
``(I) a clear and complete
statement of all relevant facts and
issues;
``(II) all arguments that the
institution wishes to present; and
``(III) all relevant and material
documents that the institution wishes
to be considered.
``(B) Extension.--The institution may file a
written request with the head of supervision for an
extension of the 30-day time period described under
subparagraph (A)(i), which shall state good cause for
granting the extension. Such request shall be granted
in the sole discretion of the head of supervision.
``(C) Information made available to institution.--
An institution seeking an appeal of a material
supervisory determination may, not later than 7 days
after receiving the material supervisory determination,
request that the agency provide the institution with
any information relied upon by the agency in making the
material supervisory determination. The agency shall
provide that information to the institution not later
than 14 days after receiving the request.
``(2) Consideration of appeal by the head of supervision.--
``(A) In general.--A head of supervision receiving
an appeal under paragraph (1) shall, after reviewing
the information provided by the institution in such
appeal--
``(i) grant the appeal;
``(ii) refer the appeal to a panel
appointed under paragraph (3); or
``(iii) deny the appeal.
``(B) Notification.--A head of supervision shall
promptly inform the institution and the head of the
agency after granting, referring, or denying an appeal
under subparagraph (A).
``(C) Right to appeal denial.--An institution that
has an appeal denied by the head of supervision under
subparagraph (A) may appeal such denial to a panel
appointed under paragraph (3).
``(3) Appointment of panel.--
``(A) In general.--With respect to each appeal
referred by a head of supervision under paragraph
(2)(A)(ii) or appealed by an institution after a denial
under paragraph (2)(A)(iii), the agency shall appoint a
panel of 3 appeals officials to provide a
recommendation on such appeal, with 1 of the 3 appeals
officials being appointed to the panel from individuals
in each of the classes described under subparagraphs
(A), (B), and (C) of subsection (g)(1).
``(B) Reporting prohibition.--An appeals official
may not be appointed to a panel under subparagraph (A)
if the appeals official is reporting, or has reported,
directly or indirectly, to the agency official who made
the material supervisory determination under review.
``(4) Panel hearings.--
``(A) Request for hearing.--An institution may
request a hearing with the panel on the institution's
appeal by--
``(i) making such request not later than 7
days after the date on which the institution is
informed the head of supervision referred an
appeal to a panel under paragraph (2); or
``(ii) making such request in the
institution's appeal of a denial of the
institution's appeal under paragraph (2).
``(B) Timing of hearing.--If an institution
requests a hearing, as described under subparagraph
(A), the panel shall provide the institution with a
hearing on the institution's appeal not later than 30
days after the date the hearing is requested, except
the panel may, in the discretion of the panel or upon
good cause shown, extend such deadline by up to 15
days.
``(C) Rulemaking.--The Federal banking agencies and
the National Credit Union Administration shall each
issue rules to establish procedures for panel hearings
described under this paragraph, including that--
``(i) the institution may appear at the
hearing personally or through counsel;
``(ii) the institution may provide an oral
and written presentation at the hearing;
``(iii) the panel may ask questions of any
person participating in the hearing;
``(iv) the hearing may not involve--
``(I) taking testimony;
``(II) a cross-examination; and
``(III) discovery;
``(v) the hearing shall not governed by
formal rules of evidence; and
``(vi) the panel shall have a verbatim
transcript of the hearing prepared.
``(5) Recommendation by panel.--
``(A) In general.--A panel making a recommendation
on an appeal under this subsection shall make the
recommendation not later than--
``(i) 90 days after the date on which the
appeal was referred by a head of supervision
under paragraph (2)(A)(ii) or appealed by an
institution after a denial under paragraph
(2)(A); or
``(ii) if the institution requested a
hearing under paragraph (4), 60 days after the
date on which the hearing concluded.
``(B) Form of recommendation.--The panel may
recommend--
``(i) that the material supervisory
determination be continued, terminated, or
otherwise modified; or
``(ii) that the material supervisory
determination be remanded to the examiners to
allow the examiners to consider additional
information presented in connection with the
appeal.
``(C) Notice.--After a recommendation is made under
subparagraph (A), the panel shall promptly notify the
institution, the head of supervision of the agency, and
the head of the agency of the recommendation, which
shall contain a statement of the basis for the panel's
recommendation and identify the information on which
the panel relied in reaching the recommendation.
``(D) Publication.--A copy of each panel
recommendation shall be posted on the agency's public
website as soon as practicable, with exempt information
redacted. If the panel determines that redaction is
insufficient to prevent improper disclosure, the
recommendation may be presented in summary form.
``(E) Standard of review.--A panel's review of a
material supervisory determination being appealed under
this subsection shall be de novo.
``(F) No authority to delay or stay orders.--A
panel shall have no authority to delay or stay the
implementation of any formal order from the applicable
agency.
``(6) Review by the head of the agency.--
``(A) Response by institution.--Not later than 15
days after receiving a notice of a recommendation under
paragraph (5)(C), the institution may submit to the
head of the agency written exceptions to the
recommended decision.
``(B) Review by head of the agency.--Not later than
45 days after receiving a notice of a recommendation
under paragraph (5)(C), the head of an agency shall
review such decision and either ratify or reject the
panel's decision.
``(C) Review may not be delegated.--A review by the
head of an agency under this paragraph may not be
delegated to any other employee of the agency and, in
the case of an agency that is headed by a body made up
of multiple individuals, all such individuals shall
participate in the review.
``(D) Reports to congress.--The Federal banking
agencies and the National Credit Union Administration
shall each, not later than 90 days after the end of
each calendar year, issue a report to the Committee on
Financial Services of the House of Representatives and
the Committee on Banking, Housing, and Urban Affairs of
the Senate describing the actions taken by the agency
under this paragraph during such calendar year,
including information on each of the panel decisions
reviewed, after redacting any confidential supervisory
information.
``(E) Publication.--A copy of each decision by the
head of the agency under this paragraph shall be posted
on the agency's public website as soon as practicable,
with exempt information redacted. If the head of the
agency determinates that redaction is insufficient to
prevent improper disclosure, the decision may be
presented in summary form.
``(7) Right to judicial review.--An institution shall have
the right to petition for review of an agency head's decision
under paragraph (6) by filing a petition for review not later
than 60 days after the date on which the decision was made in
the United States Court of Appeals for the District of Columbia
Circuit or the circuit in which the institution is located.
``(8) Retaliation prohibited.--The Federal banking agencies
and the National Credit Union Administration may not--
``(A) retaliate against an insured depository
institution or insured credit union, or a service
provider or institution-affiliated party of an insured
depository institution or insured credit union, for
exercising rights under this subsection; or
``(B) delay or deny any agency action that would
benefit an insured depository institution or insured
credit union, or a service provider or institution-
affiliated party of an insured depository institution
or insured credit union, on the basis that a matter
under this section is pending under this section.
``(9) Definitions.--With respect to the appeal of a
material supervisory determination under this subsection:
``(A) Agency.--The term `agency' means the Federal
agency, either a Federal banking agency or the National
Credit Union Administration, that made the material
supervisory determination.
``(B) Institution.--The term `institution' means
the company, either an insured depository institution
or an insured credit union, with respect to which the
material supervisory determination was made.''.
SEC. 4. REVIEW OF RESOLUTION ACTIONS RESULTING IN A MATERIAL LOSS.
Section 38(k) of the Federal Deposit Insurance Act (12 U.S.C.
1831o(k)) is amended by adding at the end the following:
``(7) Review of resolution actions by corporation inspector
general.--
``(A) In general.--If the Deposit Insurance Fund
incurs a material loss with respect to an insured
depository institution, the inspector general of the
Corporation shall--
``(i) review the Corporation's resolution
of the institution to determine whether the
material loss to the Deposit Insurance Fund
could have been avoided by the Corporation when
resolving the institution; and
``(ii) make a written report to the
Corporation and the Congress containing the
results of such review and any recommendations
for preventing a material loss to the Deposit
Insurance Fund in the future when resolving an
institution.
``(B) Testimony to congress.--If the inspector
general of the Corporation determines, in a review
carried out under subparagraph (A) that the
Corporation's resolution of an institution caused a
material loss to the Deposit Insurance Fund, but such
resolution could have been carried out in a manner to
avoid such a material loss, the Chairperson of the
Corporation shall testify before the Committee on
Financial Services of the House of Representatives and
the Committee on Banking, Housing, and Urban Affairs of
the Senate to explain why the material loss
occurred.''.
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