I
119THCONGRESS
1
STSESSION H. R. 940
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
FEBRUARY4, 2025
Mr. H
ILLof Arkansas (for himself, Mr. MEUSER, Mrs. WAGNER, Mr.
H
UIZENGA, Mr. TIMMONS, Mr. MOOREof North Carolina, and Mr. WIL-
LIAMSof Texas) 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 de-
pository institutions, and for other purposes.
Be it enacted by the Senate and House of Representa-1
tives of the United States of America in Congress assembled, 2
SECTION 1. SHORT TITLE. 3
This Act may be cited as the ‘‘Fair Audits and In-4
spections for Regulators’ Exams Act’’ or the ‘‘FAIR 5
Exams Act’’. 6
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SEC. 2. TIMELINESS OF EXAMINATION REPORTS. 1
The Federal Financial Institutions Examination 2
Council Act of 1978 (12 U.S.C. 3301 et seq.) is amended 3
by adding at the end the following: 4
‘‘SEC. 1012. TIMELINESS OF EXAMINATION REPORTS. 5
‘‘(a) I
NGENERAL.— 6
‘‘(1) F
INAL EXAMINATION REPORT .—A Federal 7
financial institutions regulatory agency shall provide 8
a final examination report to a financial institution 9
not later than 60 days after the later of— 10
‘‘(A) the exit interview for an examination 11
of the institution; or 12
‘‘(B) the provision of additional material 13
information by the institution relating to the 14
examination. 15
‘‘(2) E
XIT INTERVIEW.—If a financial institu-16
tion is not subject to a resident examiner program, 17
the exit interview shall occur not later than the end 18
of the 9-month period beginning on the commence-19
ment of the examination, except that such period 20
may be extended by the Federal financial institu-21
tions regulatory agency by providing written notice 22
to the institution and the Director describing with 23
particularity the reasons that a longer period is 24
needed to complete the examination. 25
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‘‘(b) EXAMINATIONMATERIALS.—Upon the request 1
of a financial institution, the Federal financial institutions 2
regulatory agency shall include with the final report an 3
appendix listing all examination or other factual informa-4
tion relied upon by the agency in support of a material 5
supervisory determination.’’. 6
SEC. 3. INDEPENDENT EXAMINATION REVIEW DIRECTOR. 7
(a) I
NGENERAL.—The Federal Financial Institu-8
tions Examination Council Act of 1978 (12 U.S.C. 3301 9
et seq.), as amended by section 2 of this Act, is further 10
amended by adding at the end the following: 11
‘‘SEC. 1013. OFFICE OF INDEPENDENT EXAMINATION RE-12
VIEW. 13
‘‘(a) E
STABLISHMENT.—There is established in the 14
Council an Office of Independent Examination Review. 15
‘‘(b) H
EAD OFOFFICE.—There is established the po-16
sition of the Independent Examination Review Director, 17
as the head of the Office of Independent Examination Re-18
view. The Director shall be appointed by the President, 19
by and with the advice and consent of the Senate. 20
‘‘(c) S
TAFFING.—The Director is authorized to hire 21
staff to support the activities of the Office of Independent 22
Examination Review. One-fifth of the costs and expenses 23
of the Office, including the salaries of its employees, shall 24
be paid by each of the Federal financial institutions regu-25
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latory agencies. Annual assessments for such share shall 1
be levied by the Council based upon its projected budget 2
for the year, and additional assessments may be made dur-3
ing the year if necessary. 4
‘‘(d) D
UTIES.—The Director shall— 5
‘‘(1) receive and, at the discretion of the Direc-6
tor, investigate complaints from financial institu-7
tions, their representatives, or another entity acting 8
on behalf of such institutions, concerning examina-9
tions, examination practices, or examination reports; 10
‘‘(2) hold meetings, at least once every three 11
months and in locations designed to encourage par-12
ticipation from all sections of the United States, 13
with financial institutions, their representatives, or 14
another entity acting on behalf of such institutions, 15
to discuss examination procedures, examination 16
practices, or examination policies; 17
‘‘(3) review examination procedures of the Fed-18
eral financial institutions regulatory agencies to en-19
sure that the written examination policies of those 20
agencies are being followed in practice and adhere to 21
the standards for consistency, which shall be estab-22
lished, after notice and opportunity for comment, by 23
the Council not later than 90 days after the date of 24
enactment of this section; 25
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‘‘(4) conduct a continuing and regular program 1
of examination quality assurance for all examination 2
types conducted by the Federal financial institutions 3
regulatory agencies; 4
‘‘(5) carry out an independent review of any su-5
pervisory appeal initiated under section 1014; and 6
‘‘(6) report annually to the Committee on Fi-7
nancial Services of the House of Representatives, the 8
Committee on Banking, Housing, and Urban Affairs 9
of the Senate, and the Council, on the reviews car-10
ried out pursuant to paragraphs (3) and (5), includ-11
ing compliance with the requirements set forth in 12
section 1012 regarding timeliness of examination re-13
ports, and the Council’s recommendations for im-14
provements in examination procedures, practices, 15
and policies. 16
‘‘(e) C
ONFIDENTIALITY.—The Director shall keep 17
confidential all meetings, discussions, and information 18
provided by financial institutions. The Council shall keep 19
confidential all information and communications ex-20
changed by a financial institution and the Office of Inde-21
pendent Examination Review.’’. 22
(b) D
EFINITION.—Section 1003 of the Federal Fi-23
nancial Institutions Examination Council Act of 1978 (12 24
U.S.C. 3302) is amended— 25
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(1) in paragraph (2), by striking ‘‘and’’ at the 1
end; 2
(2) in paragraph (3), by adding ‘‘and’’ at the 3
end; and 4
(3) by adding at the end the following: 5
‘‘(4) the term ‘Director’ means the Independent 6
Examination Review Director established under sec-7
tion 1013(b).’’. 8
SEC. 4. RIGHT TO INDEPENDENT REVIEW OF MATERIAL SU-9
PERVISORY DETERMINATIONS. 10
The Federal Financial Institutions Examination 11
Council Act of 1978 (12 U.S.C. 3301 et seq.), as amended 12
by sections 2 and 3 of this Act, is further amended by 13
adding at the end the following: 14
‘‘SEC. 1014. RIGHT TO INDEPENDENT REVIEW OF MATERIAL 15
SUPERVISORY DETERMINATIONS. 16
‘‘(a) I
NGENERAL.—A financial institution shall have 17
the right to obtain an independent review of a material 18
supervisory determination contained in a final report of 19
examination. 20
‘‘(b) N
OTICE.— 21
‘‘(1) T
IMING.—A financial institution seeking 22
review of a material supervisory determination under 23
this section shall file a written notice with the Direc-24
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tor within 60 days after receiving the final report of 1
examination that is the subject of such review. 2
‘‘(2) I
DENTIFICATION OF DETERMINATION .— 3
The written notice shall identify the material super-4
visory determination that is the subject of the inde-5
pendent examination review, and a statement of the 6
reasons why the institution believes that the deter-7
mination is incorrect or should otherwise be modi-8
fied. 9
‘‘(3) I
NFORMATION TO BE PROVIDED TO INSTI -10
TUTION.—Any information relied upon by the agen-11
cy in the final report that is not in the possession 12
of the financial institution may be requested by the 13
financial institution and shall be delivered promptly 14
by the agency to the financial institution. 15
‘‘(c) R
IGHT TOHEARING.— 16
‘‘(1) I
N GENERAL.—The Director shall— 17
‘‘(A) determine the merits of the appeal on 18
the record; or 19
‘‘(B) at the election of the financial institu-20
tion, refer the appeal to an administrative law 21
judge appointed by the Director to conduct a 22
hearing pursuant to the procedures set forth 23
under sections 556 and 557 of title 5, United 24
States Code, which shall take place not later 25
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than 60 days after the petition for review is re-1
ceived by the Director. 2
‘‘(2) T
IMING OF DECISION.—An administrative 3
law judge conducting a hearing under paragraph 4
(1)(B) shall issue a proposed decision to the Direc-5
tor based upon the record established at the hearing. 6
‘‘(3) S
TANDARD OF REVIEW .—In any hearing 7
under this subsection, neither the administrative law 8
judge nor the Director shall defer to the opinions of 9
the examiner or agency, but shall independently de-10
termine the appropriateness of the agency’s decision 11
based upon the relevant statutes, regulations, other 12
appropriate guidance, and evidence presented at the 13
hearing. 14
‘‘(d) F
INALRECOMMENDATION .—With respect to an 15
independent review under this section, the Director shall 16
make a final recommendation to the head of the agency 17
whose supervisory determination was the subject of the re-18
view not later than 60 days after the record has been 19
closed. 20
‘‘(e) F
INALAGENCYDETERMINATION.—Upon re-21
ceipt of a final recommendation of the Director under sub-22
section (d), the head of an agency shall make a final deter-23
mination of the agency with respect to the material super-24
visory determination not later than the 60 days after re-25
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ceiving the recommendation of the Director. In making 1
such final determination, the head of the agency shall give 2
deference to the recommendation of the Director. 3
‘‘(f) R
IGHT TOJUDICIALREVIEW.—A financial insti-4
tution shall have the right to petition for review of a final 5
agency determination made under subsection (e) by filing 6
a petition for review not later than 60 days after the date 7
on which the decision is made in the United States Court 8
of Appeals for the District of Columbia Circuit or the Cir-9
cuit in which the financial institution is located. 10
‘‘(g) R
EPORT.—The Director shall report annually to 11
the Committee on Financial Services of the House of Rep-12
resentatives, the Committee on Banking, Housing, and 13
Urban Affairs of the Senate, and the Council on actions 14
taken under this section, including the types of issues that 15
the Director has reviewed and the results of those reviews. 16
In no case shall such a report contain information about 17
individual financial institutions or any confidential or priv-18
ileged information shared by financial institutions. 19
‘‘(h) R
ETALIATIONPROHIBITED.— 20
‘‘(1) I
N GENERAL.—A Federal financial institu-21
tions regulatory agency may not— 22
‘‘(A) retaliate against a financial institu-23
tion, including service providers, or any institu-24
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tion-affiliated party, for exercising appellate 1
rights under this section; or 2
‘‘(B) delay or deny any agency action that 3
would benefit a financial institution or any in-4
stitution-affiliated party on the basis that an 5
appeal under this section is pending under this 6
section. 7
‘‘(2) R
ETALIATION.—For purposes of this sub-8
section, retaliation includes delaying consideration 9
of, or withholding approval of, any request, notice, 10
or application that otherwise would have been ap-11
proved, but for the exercise of a financial institu-12
tion’s rights under this section.’’. 13
SEC. 5. ADDITIONAL AMENDMENTS. 14
(a) R
EGULATORAPPEALSPROCESS, OMBUDSMAN, 15
ANDALTERNATIVEDISPUTERESOLUTION.— 16
(1) I
N GENERAL.—Section 309 of the Riegle 17
Community Development and Regulatory Improve-18
ment Act of 1994 (12 U.S.C. 4806) is amended— 19
(A) in the heading, by striking ‘‘
REGU-20
LATORY APPEALS PROCESS , OMBUDS-21
MAN,’’ and inserting ‘‘OMBUDSMAN ’’; 22
(B) by striking subsections (a), (b), and 23
(c); 24
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(C) by redesignating subsections (d), (e), 1
(f), and (g) as subsections (a), (b), (c), and (d), 2
respectively; and 3
(D) in subsection (b), as so redesignated— 4
(i) in paragraph (2)— 5
(I) in subparagraph (B), by 6
striking ‘‘and’’ at the end; 7
(II) in subparagraph (C), by 8
striking the period and inserting ‘‘; 9
and’’; and 10
(III) by adding at the end the 11
following: 12
‘‘(D) ensure that appropriate safeguards 13
exist for protecting any party from retaliation 14
by any agency for exercising rights under this 15
subsection.’’; and 16
(ii) by adding at the end the fol-17
lowing: 18
‘‘(6) R
ETALIATION.—For purposes of this sub-19
section, retaliation includes delaying consideration 20
of, or withholding approval of, any request, notice, 21
or application that otherwise would have been ap-22
proved, but for the exercise of a financial institu-23
tion’s rights under this section.’’. 24
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(E) in paragraph (1)(A) of subsection (c), 1
as so redesignated— 2
(i) in clause (ii), by striking ‘‘; and’’ 3
and inserting a semicolon; 4
(ii) in clause (iii), by striking ‘‘; and’’ 5
and inserting a semicolon; and 6
(iii) by adding at the end the fol-7
lowing: 8
‘‘(iv) any issue specifically listed in an 9
exam report as a matter requiring atten-10
tion by the institution’s management or 11
board of directors; and 12
‘‘(v) any suspension or removal of an 13
institution’s status as eligible for expedited 14
processing of applications, requests, no-15
tices, or filings on the grounds of a super-16
visory or compliance concern, regardless of 17
whether that concern has been cited as a 18
basis for a material supervisory determina-19
tion or matter requiring attention in an ex-20
amination report, provided that the con-21
duct at issue did not involve violation of 22
any criminal law; and’’. 23
(2) E
FFECT.—Nothing in this subsection af-24
fects the authority of an appropriate Federal bank-25
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ing agency or the National Credit Union Adminis-1
tration Board to take enforcement or other super-2
visory action. 3
(b) F
EDERALCREDITUNIONACT.—Section 205(j) 4
of the Federal Credit Union Act (12 U.S.C. 1785(j)) is 5
amended by inserting ‘‘the Bureau of Consumer Financial 6
Protection,’’ before ‘‘the Administration’’ each place that 7
term appears. 8
(c) F
EDERALFINANCIALINSTITUTIONSEXAMINA-9
TIONCOUNCILACT.—The Federal Financial Institutions 10
Examination Council Act of 1978 (12 U.S.C. 3301 et 11
seq.), as amended by sections 2 through 4 of this Act, 12
is further amended— 13
(1) in section 1003 (12 U.S.C. 3302) by strik-14
ing paragraph (1) and inserting the following: 15
‘‘(1) the term ‘Federal financial institutions 16
regulatory agencies’— 17
‘‘(A) means the Office of the Comptroller 18
of the Currency, the Board of Governors of the 19
Federal Reserve System, the Federal Deposit 20
Insurance Corporation, and the National Credit 21
Union Administration; and 22
‘‘(B) includes the Bureau of Consumer Fi-23
nancial Protection for purposes of sections 24
1012 through 1014;’’; 25
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(2) in section 1004(a)(4) (12 U.S.C. 3303), by 1
striking ‘‘Consumer Financial Protection Bureau’’ 2
and inserting ‘‘Bureau of Consumer Financial Pro-3
tection’’; and 4
(3) in section 1005 (12 U.S.C. 3304)— 5
(A) by striking ‘‘One-fifth’’ and inserting 6
‘‘One-fourth’’; and 7
(B) by inserting ‘‘described under section 8
1003(1)(A)’’ after ‘‘agencies’’. 9
Æ
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