[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 940 Reported in House (RH)]
<DOC>
Union Calendar No. 176
119th CONGRESS
1st Session
H. R. 940
[Report No. 119-216]
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
February 4, 2025
Mr. Hill of Arkansas (for himself, Mr. Meuser, Mrs. Wagner, Mr.
Huizenga, Mr. Timmons, Mr. Moore of North Carolina, and Mr. Williams of
Texas) introduced the following bill; which was referred to the
Committee on Financial Services
July 25, 2025
Additional sponsors: Mr. Haridopolos, Mr. Sessions, Mr. David Scott of
Georgia, and Mr. Fields
July 25, 2025
Reported with an amendment, committed to the Committee of the Whole
House on the State of the Union, and ordered to be printed
[Strike out all after the enacting clause and insert the part printed
in italic]
[For text of introduced bill, see copy of bill as introduced on
February 4, 2025]
_______________________________________________________________________
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'' or the ``FAIR Exams Act''.
SEC. 2. TIMELINESS OF EXAMINATIONS AND 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 EXAMINATIONS AND EXAMINATION REPORTS.
``(a) Timeliness of Examinations.--A Federal financial institutions
regulatory agency shall complete any examination of a financial
institution within 270 days of commencing the examination, except that
such period may be extended by the Federal financial institutions
regulatory agency by providing written notice to the financial
institution describing with particularity the reasons that a longer
period is needed.
``(b) Final Examination Report.--A Federal financial institutions
regulatory agency shall provide a final examination report to a
financial institution not later than 90 days after the later of--
``(1) the exit interview for an examination of the
institution; or
``(2) the provision of additional material information by
the institution relating to the examination.
``(c) Exit Interview Requirement.--Within 30 days of completing an
examination, a Federal financial institutions regulatory agency shall
conduct an exit interview with the financial institution's senior
management, except that such period may be extended by the Federal
financial institutions regulatory agency by providing written notice to
the institution and the Board describing with particularity the reasons
that a longer period is needed to complete the exit interview.
``(d) 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. TIMELINESS OF REQUIRED PERMISSION, REGULATORY, AND REPORTING
GUIDANCE.
The Federal Financial Institutions Examination Council Act of 1978
(12 U.S.C. 3301 et seq.), as amended by section 2, is further amended
by adding at the end the following:
``SEC. 1013. TIMELINESS OF REQUIRED PERMISSION, REGULATORY, AND
REPORTING GUIDANCE.
``(a) Request for Permission or Guidance.--With respect to an
action that a financial institution is taking or is intending to take,
the financial institution may request a written determination by the
applicable Federal financial institutions regulatory agency of--
``(1) the agency's non-objection to the financial
institution conducting a particular activity;
``(2) the agency's interpretation of a law or regulation;
and
``(3) the agency's interpretation of generally accepted
accounting principles or accounting objectives, standards, and
requirements.
``(b) Contents of Request.--A request made under subsection (a)
shall be in writing and contain--
``(1) the nature of the request;
``(2) applicable facts relating to the matter;
``(3) applicable law, regulation, or generally accepted
accounting principles relating to the matter; and
``(4) a summary of the request.
``(c) Response to Request.--A Federal financial institutions
regulatory agency receiving a request under subsection (a) shall, not
later than 30 days after receiving the request--
``(1) provide the financial institution making the request
with written notification that the agency received the request
and stating whether the request contains all of the information
required under subsection (b); and
``(2) if the request does not contain all of the
information required under subsection (b), provide the
financial institution with an explanation of what information
is missing.
``(d) Providing Missing Information.--If a Federal financial
institutions regulatory agency informs the financial institution under
subsection (c) that the request does not contain all the information
required under subsection (b), the financial institution may provide
the missing information to the Federal financial institutions
regulatory agency during the 30-day period beginning on the date the
financial institution receives the explanation of the missing
information under subsection (c).
``(e) Determination.--A Federal financial institutions regulatory
agency receiving a request under subsection (a) shall make a
determination on the request and provide the financial institution with
a written notice of such determination--
``(1) if the initial request contains the information
required under subsection (b), not later than the end of the
60-day period beginning on the date the Federal financial
institutions regulatory agency notifies the financial
institution of the receipt of the request under subsection (c);
or
``(2) if the initial request does not contain the
information required under subsection (b), but the financial
institution provides the missing information during the 30-day
period described under subsection (d), not later than the end
of the 60-day period beginning on the date such missing
information is provided; or
``(3) if the initial request does not contain the
information required under subsection (b), and the financial
institution does not provide the missing information during the
30-day period described under subsection (d), not later than
the end of the 60-day period beginning on the end of such 30-
day period.
``(f) Reports and Publication.--Each Federal financial institutions
regulatory agency shall, within 120 days after making a determination
under paragraph (5), publish a summary of the determination on the
public website of the Federal financial institutions regulatory agency.
Each Federal financial institutions regulatory agency shall redact any
confidential supervisory information about the financial institution,
any identifying facts about the financial institution, and any
sensitive personally identifiable information, and anonymize any un-
redacted information that could, individually or in the aggregate,
identify the financial institution.''.
SEC. 4. OFFICE OF INDEPENDENT EXAMINATION REVIEW.
(a) In General.--The Federal Financial Institutions Examination
Council Act of 1978 (12 U.S.C. 3301 et seq.), as amended by section 3,
is further amended by adding at the end the following:
``SEC. 1014. OFFICE OF INDEPENDENT EXAMINATION REVIEW.
``(a) Establishment.--There is established in the Council an Office
of Independent Examination Review (the `Office').
``(b) Board of Independent Examination Review.--
``(1) In general.--The head of the Office shall be the
Board of Independent Examination Review, which shall be
comprised of 3 members, appointed by the President, by and with
the advice and consent of the Senate.
``(2) Qualifications.--The President shall appoint the 1
member of the Board from each of the following classes of
individuals:
``(A) Individuals who have been employed by a
Federal financial institutions regulatory agency.
``(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 work-related
experience in consumer affairs or compliance
with consumer protection laws with respect to
financial institutions; 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.
``(3) Prohibition on certain individuals serving as a board
member.--The President may not appoint an individual as a
member of the Board if the individual--
``(A) is, or was during the previous 2-year period,
employed by a Federal financial institutions regulatory
agency or a Federal reserve bank;
``(B) is, or was during the previous 2-year period,
employed by a financial institution; or
``(C) is reporting, or was reporting in the past 5
years, directly or indirectly to a Federal financial
institutions regulatory agency official who makes
material supervisory determinations.
``(4) Consultation.--In appointing members of the Board,
the President shall consult with the Federal financial
institutions regulatory agencies and financial institutions.
``(5) Term.--
``(A) In general.--Each member of the Board shall
serve for a term of 3 years.
``(B) Term limitation.--No individual may serve
more than 2 full terms on the Board.
``(6) Political affiliation.--Not more than 2 members of
the Board shall be members of the same political party.
``(7) Quorum.--
``(A) In general.--3 members of the Board shall
constitute a quorum.
``(B) Initial quorum.--During the 6-month period
beginning on the date of enactment of this section, 1
member of the Board shall constitute a quorum until the
Board has 3 members.
``(c) Staffing.--The Board is authorized to hire staff to support
the activities of the Office of Independent Examination Review. One-
fifth 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 Board shall--
``(1) receive and, at the discretion of the Board,
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;
``(4) conduct a continuing and regular program of
examination quality assurance for all examination types
conducted by the Federal financial institutions regulatory
agencies;
``(5) carry out an independent review of any supervisory
appeal initiated under section 1015; 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 (5), including compliance with the requirements set forth
in section 1013 regarding timeliness of examination reports,
and the Board's recommendations for improvements in examination
procedures, practices, and policies.
``(e) Confidentiality.--The Board and the Council shall keep
confidential--
``(1) all meetings, discussions, and information provided
by financial institutions and Federal financial institutions
regulator agencies that involve confidential supervisory
information or privileged information;
``(2) all information and communications exchanged between
a financial institution and the Office of Independent
Examination Review; and
``(3) all information and communications exchanged between
a Federal financial institutions regulator agency and the
Office of Independent Examination Review.''.
(b) Definitions.--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; and
(2) by adding at the end the following:
``(4) the term `Board' means the Board of Independent
Examination Review established under section 1014(b);
``(5) the term `material supervisory determination' has the
meaning given such term in section 309(c) of the Riegle
Community Development and Regulatory Improvement Act of 1994;
``(6) the term `insured depository institution' has the
meaning given that term in section 3 of the Federal Deposit
Insurance Act; and
``(7) the term `insured credit union' has the meaning given
that term in section 101 of the Federal Credit Union Act.''.
SEC. 5. RIGHT TO INDEPENDENT REVIEW OF MATERIAL SUPERVISORY
DETERMINATIONS.
The Federal Financial Institutions Examination Council Act of 1978
(12 U.S.C. 3301 et seq.), as amended by section 4, is further amended
by adding at the end the following:
``SEC. 1015. RIGHT TO INDEPENDENT REVIEW OF MATERIAL SUPERVISORY
DETERMINATIONS.
``(a) In General.--A financial institution shall have the right to
obtain an independent review, as described in this section, 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 Board within 60 days after
receiving the final report of examination that is the subject
of such review.
``(2) Extension.--The institution may file a written
request with the Board for an extension of the 60-day time
period described under paragraph (1), which shall state good
cause for granting the extension. Such request shall be granted
in the sole discretion of the Board.
``(3) Identification of determination.--The written notice
shall--
``(A) identify the material supervisory
determination that is the subject of the requested
independent examination review;
``(B) state the reasons why the institution
believes that the material supervisory determination is
incorrect or should otherwise be modified; and
``(C) include--
``(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
in the possession of the institution that the
institution wishes to be considered.
``(4) Information made available to institution.--An
institution seeking an appeal of a material supervisory
determination may, not later than 7 days after receiving the
final examination report, request that the Federal financial
institutions regulatory agency that made the material
supervisory determination provide the institution with all
examination and factual 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.
``(c) Determination; Right to Hearing.--
``(1) In general.--The Board shall--
``(A) determine the merits of the appeal on the
record, including whether the material supervisory
determination being appealed should be upheld,
canceled, or modified; or
``(B) at the election of the financial institution,
conduct a hearing, which shall take place not later
than 60 days after the petition for review is received
by the Board.
``(2) Right to obtain testimony.--A financial institution
electing for a hearing under paragraph (1)(B) shall have the
right the obtain testimony under oath from agency employees and
obtain documents and other evidence at the hearing, or in
advance of the hearing, according to procedures instituted by
the Board consistent with those set forth under sections 556
and 557 of title 5, United States Code.
``(3) Basis of decision.--The Board shall issue a written
decision based upon the record of the examination, supplemented
by the record established at any hearing.
``(4) Standard of review.--The Board's review of a material
supervisory determination being appealed under this subsection
shall be de novo, and the Board shall not defer to the opinions
of the examiner or agency, but shall independently determine
the appropriateness of the agency's material supervisory
determination based upon the relevant statutes, regulations,
other appropriate guidance, and the evidentiary record.
``(d) Final Decision.--A decision by the Board 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 a Board determination made under
subsection (d) 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) Referral of Violations.--If the Board, in carrying out this
section, determines that a financial institution has violated a law or
regulation, the Board shall refer such determination to the applicable
Federal financial institutions regulatory agency.
``(g) Annual Report.--
``(1) In general.--The Board 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, and the Council on actions taken under
this section, including the types of issues that the Board has
reviewed and the results of those reviews, including
information on each final determination with respect to a
material supervisory determination.
``(2) Confidentiality.--In reporting under paragraph (1),
the Board shall redact information about individual financial
institutions and any confidential or privileged information
shared by financial institutions, and shall anonymize any un-
redacted information that could, in the aggregate, identify a
financial institution.
``(h) Retaliation Prohibited.--
``(1) In general.--A Federal financial institutions
regulatory agency may not--
``(A) retaliate against a financial institution,
including service providers, or any institution-
affiliated party, for exercising appellate rights under
this section; or
``(B) 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.
``(2) Retaliation.--For purposes of this subsection,
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 a financial
institution's rights under this section.
``(i) Rulemaking.--The Board shall issue rules to establish
procedures for hearings described under this section, including that--
``(1) a financial institution may appear at the hearing
personally or through counsel;
``(2) a financial institution may provide an oral and
written presentation at the hearing;
``(3) the Board may ask questions of any person
participating in the hearing;
``(4) the hearing may not involve--
``(A) a cross-examination; or
``(B) discovery;
``(5) the hearing shall not be governed by the Federal
Rules of Evidence; and
``(6) the Board shall have a verbatim transcript of the
hearing prepared.
``(j) Safety and Soundness Exception.--The appeal of a material
supervisory determination by a financial institution under this section
shall not affect the authority of a Federal financial institutions
regulatory agency to enforce the material supervisory determination or
to take an action based on such material supervisory determination, if
the Federal financial institutions regulatory agency determines that
such enforcement or action is necessary to ensure the safety and
soundness of the financial institution.''.
SEC. 6. 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 the heading, by striking ``regulatory
appeals process, ombudsman,'' and inserting
``ombudsman'' (and by conforming the item relating to
such section in the table of contents accordingly);
(B) by striking subsections (a), (b), and (c);
(C) by redesignating subsections (d), (e), (f), and
(g) as subsections (a), (b), (c), and (d),
respectively;
(D) in subsection (b), as so redesignated--
(i) in paragraph (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 any party from retaliation by any agency for
exercising rights under this subsection.''; and
(ii) by adding at the end the following:
``(6) Retaliation.--For purposes of this subsection,
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 a financial
institution's rights under this section.''; and
(E) in paragraph (1)(A) of subsection (c), as so
redesignated--
(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)--
(A) 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
1015;''; and
(B) in paragraph (3), by striking the semicolon at
the end and inserting ``, except that for purposes of
sections 1012 through 1015, the term `financial
institution' does not include a credit union that is
not an insured credit union;'';
(2) in section 1004(a)(4) (12 U.S.C. 3303), by striking
``Consumer Financial Protection Bureau'' and inserting ``Bureau
of Consumer Financial Protection''; and
(3) in section 1005 (12 U.S.C. 3304)--
(A) by striking ``One-fifth'' and inserting ``One-
fourth''; and
(B) by inserting ``described under section
1003(1)(A)'' after ``agencies''.
Union Calendar No. 176
119th CONGRESS
1st Session
H. R. 940
[Report No. 119-216]
_______________________________________________________________________
A BILL
To amend the Federal Financial Institutions Examination Council Act of
1978 to improve the examination of depository institutions, and for
other purposes.
_______________________________________________________________________
July 25, 2025
Reported with an amendment, committed to the Committee of the Whole
House on the State of the Union, and ordered to be printed