II 

118TH CONGRESS 

1ST SESSION S. 3541 

To amend the Federal Financial Institutions Examination Council Act of 

1978 to improve the examination of depository institutions, and for 

other purposes. 

IN THE SENATE OF THE UNITED STATES 

DECEMBER 14, 2023 

Mr. MORAN (for himself, Mr. MANCHIN, Mr. HAGERTY, and Mr. TILLIS) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs 

A BILL 

To amend the Federal Financial Institutions Examination 

Council Act of 1978 to improve the examination of depository institutions, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Fair Audits and In5 spections for Regulators’ Exams Act’’. 

6 SEC. 2. TIMELINESS OF EXAMINATION REPORTS. 

7 The Federal Financial Institutions Examination 

8 Council Act of 1978 (12 U.S.C. 3301 et seq.) is amended 

9 by adding at the end the following: 


ssavage on DSKBC07HB2PROD with BILLS
2 

•S 3541 IS

1 ‘‘SEC. 1012. TIMELINESS OF EXAMINATION REPORTS. 

2 ‘‘(a) IN GENERAL.— 

3 ‘‘(1) FINAL EXAMINATION REPORT.—A Federal 

4 financial institutions regulatory agency shall provide 

5 a final examination report to a financial institution 

6 not later than 60 days after the later of— 

7 ‘‘(A) the exit interview for an examination 

8 of the institution; or 

9 ‘‘(B) the provision of additional material 

10 information by the institution relating to the 

11 examination. 

12 ‘‘(2) EXIT INTERVIEW.—If a financial institu13 tion is not subject to a resident examiner program, 

14 the exit interview shall occur not later than the end 

15 of the 9-month period beginning on the commence16 ment of the examination, except that such period 

17 may be extended by the Federal financial institu18 tions regulatory agency by providing written notice 

19 to the institution and the Director describing with 

20 particularity the reasons that a longer period is 

21 needed to complete the examination. 

22 ‘‘(b) EXAMINATION MATERIALS.—Upon the request 

23 of a financial institution, the Federal financial institutions 

24 regulatory agency shall include with the final report an 

25 appendix listing all examination or other factual informaVerDate Sep 11 2014 19:23 Jan 02, 2024 Jkt 049200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S3541.IS S3541

ssavage on DSKBC07HB2PROD with BILLS
3 

•S 3541 IS

1 tion relied upon by the agency in support of a material 

2 supervisory determination.’’. 

3 SEC. 3. INDEPENDENT EXAMINATION REVIEW DIRECTOR. 

4 (a) IN GENERAL.—The Federal Financial Institu5 tions Examination Council Act of 1978 (12 U.S.C. 3301 

6 et seq.), as amended by section 2 of this Act, is further 

7 amended by adding at the end the following: 

8 ‘‘SEC. 1013. OFFICE OF INDEPENDENT EXAMINATION RE9 VIEW. 

10 ‘‘(a) ESTABLISHMENT.—There is established in the 

11 Council an Office of Independent Examination Review. 

12 ‘‘(b) HEAD OF OFFICE.—There is established the po13 sition of the Independent Examination Review Director, 

14 as the head of the Office of Independent Examination Re15 view. The Director shall be appointed by the Federal Fi16 nancial Institutions Examination Council. 

17 ‘‘(c) STAFFING.—The Director is authorized to hire 

18 staff to support the activities of the Office of Independent 

19 Examination Review. One-fourth of the costs and expenses 

20 of the Office, including the salaries of its employees, shall 

21 be paid by each of the Federal financial institutions regu22 latory agencies. Annual assessments for such share shall 

23 be levied by the Council based upon its projected budget 

24 for the year, and additional assessments may be made dur25 ing the year if necessary. 


ssavage on DSKBC07HB2PROD with BILLS
4 

•S 3541 IS

1 ‘‘(d) DUTIES.—The Director shall— 

2 ‘‘(1) receive and, at the discretion of the Direc3 tor, investigate complaints from financial institu4 tions, their representatives, or another entity acting 

5 on behalf of such institutions, concerning examina6 tions, examination practices, or examination reports; 

7 ‘‘(2) hold meetings, at least once every three 

8 months and in locations designed to encourage par9 ticipation from all sections of the United States, 

10 with financial institutions, their representatives, or 

11 another entity acting on behalf of such institutions, 

12 to discuss examination procedures, examination 

13 practices, or examination policies; 

14 ‘‘(3) review examination procedures of the Fed15 eral financial institutions regulatory agencies to en16 sure that the written examination policies of those 

17 agencies are being followed in practice and adhere to 

18 the standards for consistency, which shall be estab19 lished, after notice and opportunity for comment, by 

20 the Council not later than 90 days after the date of 

21 enactment of this section; 

22 ‘‘(4) conduct a continuing and regular program 

23 of examination quality assurance for all examination 

24 types conducted by the Federal financial institutions 

25 regulatory agencies; 


ssavage on DSKBC07HB2PROD with BILLS
5 

•S 3541 IS

1 ‘‘(5) adjudicate any supervisory appeal initiated 

2 under section 1014; and 

3 ‘‘(6) report annually to the Committee on Fi4 nancial Services of the House of Representatives, the 

5 Committee on Banking, Housing, and Urban Affairs 

6 of the Senate, and the Council, on the reviews car7 ried out pursuant to paragraphs (3) and (4), includ8 ing compliance with the requirements set forth in 

9 section 1012 regarding timeliness of examination re10 ports, and the Council’s recommendations for im11 provements in examination procedures, practices, 

12 and policies. 

13 ‘‘(e) CONFIDENTIALITY.—The Director shall keep 

14 confidential all meetings, discussions, and information 

15 provided by financial institutions. The Council shall keep 

16 confidential all information and communications ex17 changed by a financial institution and the Office of Inde18 pendent Examination Review.’’. 

19 (b) DEFINITION.—Section 1003 of the Federal Fi20 nancial Institutions Examination Council Act of 1978 (12 

21 U.S.C. 3302) is amended— 

22 (1) in paragraph (2), by striking ‘‘and’’ at the 

23 end; 

24 (2) in paragraph (3), by adding ‘‘and’’ at the 

25 end; and 


ssavage on DSKBC07HB2PROD with BILLS
6 

•S 3541 IS

1 (3) by adding at the end the following: 

2 ‘‘(4) the term ‘Director’ means the Independent 

3 Examination Review Director established under sec4 tion 1013(a) and (b).’’. 

5 SEC. 4. RIGHT TO INDEPENDENT REVIEW OF MATERIAL SU6 PERVISORY DETERMINATIONS. 

7 The Federal Financial Institutions Examination 

8 Council Act of 1978, as amended by sections 2 and 3 of 

9 this Act, is further amended by adding at the end the fol10 lowing: 

11 ‘‘SEC. 1014. RIGHT TO INDEPENDENT REVIEW OF MATERIAL 

12 SUPERVISORY DETERMINATIONS. 

13 ‘‘(a) IN GENERAL.—A financial institution shall have 

14 the right to obtain an independent review of a material 

15 supervisory determination contained in a final report of 

16 examination. 

17 ‘‘(b) NOTICE.— 

18 ‘‘(1) TIMING.—A financial institution seeking 

19 review of a material supervisory determination under 

20 this section shall file a written notice with the Direc21 tor within 60 days after receiving the final report of 

22 examination that is the subject of such review. 

23 ‘‘(2) IDENTIFICATION OF DETERMINATION.— 

24 The written notice shall identify the material super25 visory determination that is the subject of the indeVerDate Sep 11 2014 19:23 Jan 02, 2024 Jkt 049200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S3541.IS S3541

ssavage on DSKBC07HB2PROD with BILLS
7 

•S 3541 IS

1 pendent examination review, and a statement of the 

2 reasons why the institution believes that the deter3 mination is incorrect or should otherwise be modi4 fied. 

5 ‘‘(3) INFORMATION TO BE PROVIDED TO INSTI6 TUTION.—Any information relied upon by the agen7 cy in the final report that is not in the possession 

8 of the financial institution may be requested by the 

9 financial institution and shall be delivered promptly 

10 by the agency to the financial institution. 

11 ‘‘(c) RIGHT TO HEARING.— 

12 ‘‘(1) IN GENERAL.—The Director shall— 

13 ‘‘(A) determine the merits of the appeal on 

14 the record; or 

15 ‘‘(B) at the election of the financial institu16 tion, refer the appeal to an administrative law 

17 judge appointed by the Council to conduct a 

18 hearing pursuant to the procedures set forth 

19 under sections 556 and 557 of title 5, United 

20 States Code, which shall take place not later 

21 than 60 days after the petition for review is re22 ceived by the Director. 

23 ‘‘(2) TIMING OF DECISION.—An administrative 

24 law judge conducting a hearing under paragraph 


ssavage on DSKBC07HB2PROD with BILLS
8 

•S 3541 IS

1 (1)(B) shall issue a proposed decision to the Direc2 tor based upon the record established at the hearing. 

3 ‘‘(3) STANDARD OF REVIEW.—In any hearing 

4 under this subsection— 

5 ‘‘(A) neither the administrative law judge 

6 nor the Director shall defer to the opinions of 

7 the examiner or agency, but shall independently 

8 determine the appropriateness of the agency’s 

9 decision based upon the relevant statutes, regu10 lations, other appropriate guidance, and evi11 dence presented at the hearing. 

12 ‘‘(d) FINAL DECISION.—A decision by the Director 

13 on an independent review under this section shall— 

14 ‘‘(1) be made not later than 60 days after the 

15 record has been closed; and 

16 ‘‘(2) be deemed final agency action and shall 

17 bind the agency whose supervisory determination 

18 was the subject of the review and the financial insti19 tution requesting the review. 

20 ‘‘(e) RIGHT TO JUDICIAL REVIEW.—A financial insti21 tution shall have the right to petition for review of the 

22 decision of the Director under this section by filing a peti23 tion for review not later than 60 days after the date on 

24 which the decision is made in the United States Court of 


ssavage on DSKBC07HB2PROD with BILLS
9 

•S 3541 IS

1 Appeals for the District of Columbia Circuit or the Circuit 

2 in which the financial institution is located. 

3 ‘‘(f) REPORT.—The Director shall report annually to 

4 the Committee on Financial Services of the House of Rep5 resentatives, the Committee on Banking, Housing, and 

6 Urban Affairs of the Senate on actions taken under this 

7 section, including the types of issues that the Director has 

8 reviewed and the results of those reviews. In no case shall 

9 such a report contain information about individual finan10 cial institutions or any confidential or privileged informa11 tion shared by financial institutions. 

12 ‘‘(g) RETALIATION PROHIBITED.—A Federal finan13 cial institutions regulatory agency may not— 

14 ‘‘(1) retaliate against a financial institution, in15 cluding service providers, or any institution-affiliated 

16 party, for exercising appellate rights under this sec17 tion; or 

18 ‘‘(2) delay or deny any agency action that 

19 would benefit a financial institution or any institu20 tion-affiliated party on the basis that an appeal 

21 under this section is pending under this section.’’. 

22 SEC. 5. ADDITIONAL AMENDMENTS. 

23 (a) REGULATOR APPEALS PROCESS, OMBUDSMAN, 

24 AND ALTERNATIVE DISPUTE RESOLUTION.— 


ssavage on DSKBC07HB2PROD with BILLS
10 

•S 3541 IS

1 (1) IN GENERAL.—Section 309 of the Riegle 

2 Community Development and Regulatory Improve3 ment Act of 1994 (12 U.S.C. 4806) is amended— 

4 (A) in subsection (a), by inserting after 

5 ‘‘appropriate Federal banking agency’’ the fol6 lowing: ‘‘, the Bureau of Consumer Financial 

7 Protection,’’; 

8 (B) in subsection (b)— 

9 (i) by redesignating paragraphs (1) 

10 and (2) as subparagraphs (A) and (B) and 

11 indenting appropriately; 

12 (ii) in the matter preceding subpara13 graph (A) (as redesignated), by striking 

14 ‘‘In establishing’’ and inserting ‘‘(1) IN

15 GENERAL.—In establishing’’; 

16 (iii) in paragraph (1)(B) (as redesig17 nated), by striking ‘‘the appellant from re18 taliation by agency examiners’’ and insert19 ing ‘‘the insured depository institution or 

20 insured credit union from retaliation by an 

21 agency referred to in subsection (a)’’; and 

22 (iv) by adding at the end the fol23 lowing: 

24 ‘‘(2) RETALIATION.—For purposes of this sub25 section and subsection (e), retaliation includes delayVerDate Sep 11 2014 19:23 Jan 02, 2024 Jkt 049200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S3541.IS S3541

ssavage on DSKBC07HB2PROD with BILLS
11 

•S 3541 IS

1 ing consideration of, or withholding approval of, any 

2 request, notice, or application that otherwise would 

3 have been approved, but for the exercise of the insti4 tution’s or credit union’s rights under this section.’’; 

5 (C) in subsection (e)(2)— 

6 (i) in subparagraph (B), by striking 

7 ‘‘and’’ at the end; 

8 (ii) in subparagraph (C), by striking 

9 the period and inserting ‘‘; and’’; and 

10 (iii) by adding at the end the fol11 lowing: 

12 ‘‘(D) ensure that appropriate safeguards 

13 exist for protecting the insured depository insti14 tution or insured credit union from retaliation 

15 by any agency referred to in subsection (a) for 

16 exercising its rights under this subsection.’’; 

17 and 

18 (D) in subsection (f)(1)(A)— 

19 (i) in clause (ii), by striking ‘‘; and’’ 

20 and inserting a semicolon; 

21 (ii) in clause (iii), by striking ‘‘; and’’ 

22 and inserting a semicolon; and 

23 (iii) by adding at the end the fol24 lowing: 


ssavage on DSKBC07HB2PROD with BILLS
12 

•S 3541 IS

1 ‘‘(iv) any issue specifically listed in an 

2 exam report as a matter requiring atten3 tion by the institution’s management or 

4 board of directors; and 

5 ‘‘(v) any suspension or removal of an 

6 institution’s status as eligible for expedited 

7 processing of applications, requests, no8 tices, or filings on the grounds of a super9 visory or compliance concern, regardless of 

10 whether that concern has been cited as a 

11 basis for a material supervisory determina12 tion or matter requiring attention in an ex13 amination report, provided that the con14 duct at issue did not involve violation of 

15 any criminal law; and’’. 

16 (2) EFFECT.—Nothing in this subsection af17 fects the authority of an appropriate Federal bank18 ing agency or the National Credit Union Adminis19 tration Board to take enforcement or other super20 visory action. 

21 (b) FEDERAL CREDIT UNION ACT.—Section 205(j) 

22 of the Federal Credit Union Act (12 U.S.C. 1785(j)) is 

23 amended by inserting ‘‘the Bureau of Consumer Financial 

24 Protection,’’ before ‘‘the Administration’’ each place that 

25 term appears. 


ssavage on DSKBC07HB2PROD with BILLS
13 

•S 3541 IS

1 (c) FEDERAL FINANCIAL INSTITUTIONS EXAMINA2 TION COUNCIL ACT.—The Federal Financial Institutions 

3 Examination Council Act of 1978 (12 U.S.C. 3301 et 

4 seq.), as amended by sections 2 through 4 of this Act, 

5 is further amended— 

6 (1) in section 1003 (12 U.S.C. 3302) by strik7 ing paragraph (1) and inserting the following: 

8 ‘‘(1) the term ‘Federal financial institutions 

9 regulatory agencies’— 

10 ‘‘(A) means the Office of the Comptroller 

11 of the Currency, the Board of Governors of the 

12 Federal Reserve System, the Federal Deposit 

13 Insurance Corporation, and the National Credit 

14 Union Administration; and 

15 ‘‘(B) includes the Bureau of Consumer Fi16 nancial Protection for purposes of sections 

17 1012 through 1014;’’; and 

18 (2) in section 1005 (12 U.S.C. 3304), by strik19 ing ‘‘One-fifth’’ and inserting ‘‘One-fourth’’. 

Æ 


ssavage on DSKBC07HB2PROD with BILLS