I 

115TH CONGRESS 

1ST SESSION H. R. 4545 

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 

DECEMBER 4, 2017 

Mr. TIPTON (for himself and Mrs. CAROLYN B. MALONEY of New York) 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. 

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 ‘‘Financial Institutions 

5 Examination Fairness and Reform Act’’. 


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1 SEC. 2. AMENDMENT TO DEFINITION OF FINANCIAL INSTI2 TUTION. 

3 Section 1003(3) of the Federal Financial Institutions 

4 Examination Council Act of 1978 (12 U.S.C. 3302(3)) is 

5 amended to read as follows: 

6 ‘‘(3) the term ‘financial institution’— 

7 ‘‘(A) means a commercial bank, a savings 

8 bank, a trust company, a savings association, a 

9 building and loan association, a homestead as10 sociation, a cooperative bank, or a credit union; 

11 and 

12 ‘‘(B) for purposes of sections 1012, 1013, 

13 and 1014, includes a nondepository covered per14 son subject to supervision by the Bureau of 

15 Consumer Financial Protection under section 

16 1024 of the Consumer Financial Protection Act 

17 of 2010 (12 U.S.C. 5514).’’. 

18 SEC. 3. TIMELINESS OF EXAMINATION REPORTS. 

19 The Federal Financial Institutions Examination 

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

21 by adding at the end the following: 

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

23 ‘‘(a) IN GENERAL.— 

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

25 financial institutions regulatory agency shall provide 


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1 a final examination report to a financial institution 

2 not later than 60 days after the later of— 

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

4 of the institution; or 

5 ‘‘(B) the provision of additional informa6 tion by the institution relating to the examina7 tion. 

8 ‘‘(2) EXIT INTERVIEW.—If a financial institu9 tion is not subject to a resident examiner program, 

10 the exit interview shall occur not later than the end 

11 of the 9-month period beginning on the commence12 ment of the examination, except that such period 

13 may be extended by the Federal financial institu14 tions regulatory agency by providing written notice 

15 to the institution and the Independent Examination 

16 Review Director describing with particularity the 

17 reasons that a longer period is needed to complete 

18 the examination. 

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

20 of a financial institution, the Federal financial institutions 

21 regulatory agency shall include with the final report an 

22 appendix listing all examination or other factual informa23 tion relied upon by the agency in support of a material 

24 supervisory determination.’’. 


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1 SEC. 4. INDEPENDENT EXAMINATION REVIEW DIRECTOR. 

2 The Federal Financial Institutions Examination 

3 Council Act of 1978 (12 U.S.C. 3301 et seq.), as amended 

4 by section 3, is further amended by adding at the end the 

5 following: 

6 ‘‘SEC. 1013. OFFICE OF INDEPENDENT EXAMINATION RE7 VIEW. 

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

9 Council an Office of Independent Examination Review 

10 (the ‘Office’). 

11 ‘‘(b) HEAD OF OFFICE.—There is established the po12 sition of the Independent Examination Review Director 

13 (the ‘Director’), as the head of the Office. The Director 

14 shall be appointed by the Council and shall be independent 

15 from any member agency of the Council. 

16 ‘‘(c) TERM.—The Director shall serve for a term of 

17 5 years, and may be appointed to serve a subsequent 5- 

18 year term. 

19 ‘‘(d) STAFFING.—The Director is authorized to hire 

20 staff to support the activities of the Office. 

21 ‘‘(e) DUTIES.—The Director shall— 

22 ‘‘(1) receive and, at the Director’s discretion, 

23 investigate complaints from financial institutions, 

24 their representatives, or another entity acting on be25 half of such institutions, concerning examinations, 

26 examination practices, or examination reports; 


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

2 months and in locations designed to encourage par3 ticipation from all sections of the United States, 

4 with financial institutions, their representatives, or 

5 another entity acting on behalf of such institutions, 

6 to discuss examination procedures, examination 

7 practices, or examination policies; 

8 ‘‘(3) in accordance with subsection (f), review 

9 examination procedures of the Federal financial in10 stitutions regulatory agencies to ensure that the 

11 written examination policies of those agencies are 

12 being followed in practice and adhere to the stand13 ards for consistency established by the Council; 

14 ‘‘(4) conduct a continuing and regular review of 

15 examination quality assurance for all examination 

16 types conducted by the Federal financial institutions 

17 regulatory agencies; 

18 ‘‘(5) adjudicate any supervisory appeal initiated 

19 under section 1014; and 

20 ‘‘(6) report annually to the Committee on Fi21 nancial Services of the House of Representatives, the 

22 Committee on Banking, Housing, and Urban Affairs 

23 of the Senate, and the Council, on the reviews car24 ried out pursuant to paragraphs (3) and (4), includ25 ing compliance with the requirements set forth in 


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1 section 1012 regarding timeliness of examination re2 ports, and the Council’s recommendations for im3 provements in examination procedures, practices, 

4 and policies. 

5 ‘‘(f) STANDARD FOR REVIEWING EXAMINATION PRO6 CEDURES.—In conducting reviews pursuant to subsection 

7 (e)(4), the Director shall prioritize factors relating to the 

8 safety and soundness of the financial system of the United 

9 States. 

10 ‘‘(g) REMOVAL.—If the Director is removed from of11 fice, the Council shall communicate in writing the reasons 

12 for any such removal to the Committee on Financial Serv13 ices of the House of Representatives and the Committee 

14 on Banking, Housing, and Urban Affairs of the Senate 

15 not later than 30 days before the removal. 

16 ‘‘(h) CONFIDENTIALITY.—The Director shall keep 

17 confidential all meetings with, discussions with, and infor18 mation provided by financial institutions.’’. 

19 SEC. 5. RIGHT TO INDEPENDENT REVIEW OF MATERIAL SU20 PERVISORY DETERMINATIONS. 

21 The Federal Financial Institutions Examination 

22 Council Act of 1978 (12 U.S.C. 3301 et seq.), as amended 

23 by section 4, is further amended by adding at the end the 

24 following: 


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

2 SUPERVISORY DETERMINATIONS. 

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

4 the right to obtain an independent review of a material 

5 supervisory determination contained in a final report of 

6 examination. 

7 ‘‘(b) NOTICE.— 

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

9 review of a material supervisory determination under 

10 this section shall file a written notice with the Inde11 pendent Examination Review Director (the ‘Direc12 tor’) within 60 days after receiving the final report 

13 of examination that is the subject of such review. 

14 ‘‘(2) IDENTIFICATION OF DETERMINATION.— 

15 The written notice shall identify the material super16 visory determination that is the subject of the inde17 pendent examination review, and a statement of the 

18 reasons why the institution believes that the deter19 mination is incorrect or should otherwise be modi20 fied. 

21 ‘‘(3) INFORMATION TO BE PROVIDED TO INSTI22 TUTION.—Any information relied upon by the agen23 cy in the final report that is not in the possession 

24 of the financial institution may be requested by the 

25 financial institution and shall be delivered promptly 

26 by the agency to the financial institution. 


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1 ‘‘(c) RIGHT TO HEARING.— 

2 ‘‘(1) IN GENERAL.—The Director shall deter3 mine the merits of the appeal on the record or, at 

4 the financial institution’s election, shall refer the ap5 peal to an Administrative Law Judge to conduct a 

6 confidential hearing pursuant to the procedures set 

7 forth under sections 556 and 557 of title 5, United 

8 States Code, which hearing shall take place not later 

9 than 60 days after the petition for review was re10 ceived by the Director, and to issue a proposed deci11 sion to the Director based upon the record estab12 lished at such hearing. 

13 ‘‘(2) STANDARD OF REVIEW.—In rendering a 

14 determination or recommendation under this sub15 section, neither the Administrative Law Judge nor 

16 the Director shall defer to the opinions of the exam17 iner or agency, but shall conduct a de novo review 

18 to independently determine the appropriateness of 

19 the agency’s decision based upon the relevant stat20 utes, regulations, and other appropriate guidance, as 

21 well as evidence adduced at any hearing. 

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

23 on an independent review under this section shall— 

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

25 record has been closed; and 


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1 ‘‘(2) subject to subsection (e), be deemed a final 

2 agency action and shall bind the agency whose su3 pervisory determination was the subject of the re4 view and the financial institution requesting the re5 view. 

6 ‘‘(e) LIMITED REVIEW BY FFIEC.— 

7 ‘‘(1) IN GENERAL.—If the agency whose super8 visory determination was the subject of the review 

9 believes that the Director’s decision under subsection 

10 (d) would pose an imminent threat to the safety and 

11 soundness of the financial institution, such agency 

12 may file a written notice seeking review of the Direc13 tor’s decision with the Council within 10 days of re14 ceiving the Director’s decision. 

15 ‘‘(2) STANDARD OF REVIEW.—In making a de16 termination under this subsection, the Council shall 

17 conduct a review to determine whether there is sub18 stantial evidence that the Director’s decision would 

19 pose an imminent threat to the safety and soundness 

20 of the financial institution. 

21 ‘‘(3) FINAL DETERMINATION.—A determination 

22 by the Council shall— 

23 ‘‘(A) be made not later than 30 days after 

24 the filing of the notice pursuant to paragraph 

25 (1); and 


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1 ‘‘(B) be deemed a final agency action and 

2 shall bind the agency whose supervisory deter3 mination was the subject of the review and the 

4 financial institution requesting the review. 

5 ‘‘(f) RIGHT TO JUDICIAL REVIEW.—A financial insti6 tution shall have the right to petition for review of final 

7 agency action under this section by filing a Petition for 

8 Review within 60 days of the Director’s decision or the 

9 Council’s decision in the United States Court of Appeals 

10 for the District of Columbia Circuit or the Circuit in which 

11 the financial institution is located. 

12 ‘‘(g) REPORT.—The Director shall report annually to 

13 the Committee on Financial Services of the House of Rep14 resentatives and the Committee on Banking, Housing, and 

15 Urban Affairs of the Senate on actions taken under this 

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

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

18 such a report contain information about individual finan19 cial institutions or any confidential or privileged informa20 tion shared by financial institutions. 

21 ‘‘(h) RETALIATION PROHIBITED.—A Federal finan22 cial institutions regulatory agency may not— 

23 ‘‘(1) retaliate against a financial institution, in24 cluding service providers, or any institution-affiliated 

25 party (as defined under section 3 of the Federal DeVerDate Sep 11 2014 02:07 Dec 09, 2017 Jkt 079200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H4545.IH H4545

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1 posit Insurance Act), for exercising appellate rights 

2 under this section; or 

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

4 would benefit a financial institution or any institu5 tion-affiliated party on the basis that an appeal 

6 under this section is pending under this section. 

7 ‘‘(i) RULE OF CONSTRUCTION.—Nothing in this sec8 tion may be construed— 

9 ‘‘(1) to affect the right of a Federal financial 

10 institutions regulatory agency to take enforcement 

11 or other supervisory actions related to a material su12 pervisory determination under review under this sec13 tion; or 

14 ‘‘(2) to prohibit the review under this section of 

15 a material supervisory determination with respect to 

16 which there is an ongoing enforcement or other su17 pervisory action.’’. 

18 SEC. 6. ADDITIONAL AMENDMENTS. 

19 (a) RIEGLE COMMUNITY DEVELOPMENT AND REGU20 LATORY IMPROVEMENT ACT OF 1994.—Section 309 of the 

21 Riegle Community Development and Regulatory Improve22 ment Act of 1994 (12 U.S.C. 4806) is amended— 

23 (1) in subsection (a), by inserting after ‘‘appro24 priate Federal banking agency’’ the following: ‘‘, the 

25 Bureau of Consumer Financial Protection,’’; 


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1 (2) in subsection (b)— 

2 (A) in paragraph (2), by striking ‘‘the ap3 pellant from retaliation by agency examiners’’ 

4 and inserting ‘‘the insured depository institu5 tion or insured credit union from retaliation by 

6 the agencies referred to in subsection (a)’’; and 

7 (B) by adding at the end the following 

8 flush-left text: 

9 ‘‘For purposes of this subsection and subsection (e), retal10 iation includes delaying consideration of, or withholding 

11 approval of, any request, notice, or application that other12 wise would have been approved, but for the exercise of the 

13 institution’s or credit union’s rights under this section.’’; 

14 (3) in subsection (e)(2)— 

15 (A) in subparagraph (B), by striking 

16 ‘‘and’’ at the end; 

17 (B) in subparagraph (C), by striking the 

18 period and inserting ‘‘; and’’; and 

19 (C) by adding at the end the following: 

20 ‘‘(D) ensure that appropriate safeguards 

21 exist for protecting the insured depository insti22 tution or insured credit union from retaliation 

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

24 exercising its rights under this subsection.’’; 

25 and 


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1 (4) in subsection (f)(1)(A)— 

2 (A) in clause (ii), by striking ‘‘and’’ at the 

3 end; 

4 (B) in clause (iii), by striking ‘‘and’’ at the 

5 end; and 

6 (C) by adding at the end the following: 

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

8 exam report as a matter requiring atten9 tion by the institution’s management or 

10 board of directors; and 

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

12 institution’s status as eligible for expedited 

13 processing of applications, requests, no14 tices, or filings on the grounds of a super15 visory or compliance concern, regardless of 

16 whether that concern has been cited as a 

17 basis for another material supervisory de18 termination or matter requiring attention 

19 in an examination report, provided that the 

20 conduct at issue did not involve violation of 

21 any criminal law; and’’. 

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

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

24 amended by inserting ‘‘the Bureau of Consumer Financial 


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1 Protection,’’ before ‘‘the Administration’’ each place such 

2 term appears. 

3 (c) FEDERAL FINANCIAL INSTITUTIONS EXAMINA4 TION COUNCIL ACT OF 1978.—The Federal Financial In5 stitutions Examination Council Act of 1978 (12 U.S.C. 

6 3301 et seq.) is amended— 

7 (1) in section 1003, by amending paragraph (1) 

8 to read as follows: 

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

10 regulatory agencies’— 

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

12 of the Currency, the Board of Governors of the 

13 Federal Reserve System, the Federal Deposit 

14 Insurance Corporation, and the National Credit 

15 Union Administration; and 

16 ‘‘(B) for purposes of sections 1012, 1013, 

17 and 1014, includes the Bureau of Consumer Fi18 nancial Protection;’’; and 

19 (2) in section 1005, by striking ‘‘One-fifth’’ and 

20 inserting ‘‘One-fourth’’. 

Æ 


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