IB 

Union Calendar No. 447 

115TH CONGRESS 

2D SESSION H. R. 4545 

[Report No. 115–589] 

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 

MARCH 6, 2018 

Additional sponsors: Mr. HULTGREN, Mr. ZELDIN, Mr. PITTENGER, Mr. 

GOTTHEIMER, Mr. LUCAS, and Mr. MESSER

MARCH 6, 2018 

Committed to the Committee of the Whole House on the State of the Union 

and ordered to be printed 


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A BILL 

To amend the Federal Financial Institutions Examination 

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


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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’’. 

6 SEC. 2. AMENDMENT TO DEFINITION OF FINANCIAL INSTI7 TUTION. 

8 Section 1003(3) of the Federal Financial Institutions 

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

10 amended to read as follows: 

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

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

13 bank, a trust company, a savings association, a 

14 building and loan association, a homestead as15 sociation, a cooperative bank, or a credit union; 

16 and 

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

18 and 1014, includes a nondepository covered per19 son subject to supervision by the Bureau of 

20 Consumer Financial Protection under section 

21 1024 of the Consumer Financial Protection Act 

22 of 2010 (12 U.S.C. 5514).’’. 


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1 SEC. 3. TIMELINESS OF EXAMINATION REPORTS. 

2 The Federal Financial Institutions Examination 

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

4 by adding at the end the following: 

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

6 ‘‘(a) IN GENERAL.— 

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

8 financial institutions regulatory agency shall provide 

9 a final examination report to a financial institution 

10 not later than 60 days after the later of— 

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

12 of the institution; or 

13 ‘‘(B) the provision of additional informa14 tion by the institution relating to the examina15 tion. 

16 ‘‘(2) EXIT INTERVIEW.—If a financial institu17 tion is not subject to a resident examiner program, 

18 the exit interview shall occur not later than the end 

19 of the 9-month period beginning on the commence20 ment of the examination, except that such period 

21 may be extended by the Federal financial institu22 tions regulatory agency by providing written notice 

23 to the institution and the Independent Examination 

24 Review Director describing with particularity the 

25 reasons that a longer period is needed to complete 

26 the examination. 


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

2 of a financial institution, the Federal financial institutions 

3 regulatory agency shall include with the final report an 

4 appendix listing all examination or other factual informa5 tion relied upon by the agency in support of a material 

6 supervisory determination.’’. 

7 SEC. 4. INDEPENDENT EXAMINATION REVIEW DIRECTOR. 

8 The Federal Financial Institutions Examination 

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

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

11 following: 

12 ‘‘SEC. 1013. OFFICE OF INDEPENDENT EXAMINATION RE13 VIEW. 

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

15 Council an Office of Independent Examination Review 

16 (the ‘Office’). 

17 ‘‘(b) HEAD OF OFFICE.—There is established the po18 sition of the Independent Examination Review Director 

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

20 shall be appointed by the Council and shall be independent 

21 from any member agency of the Council. 

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

23 5 years, and may be appointed to serve a subsequent 5- 

24 year term. 


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

2 staff to support the activities of the Office. 

3 ‘‘(e) DUTIES.—The Director shall— 

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

5 investigate complaints from financial institutions, 

6 their representatives, or another entity acting on be7 half of such institutions, concerning examinations, 

8 examination practices, or examination reports; 

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

10 months and in locations designed to encourage par11 ticipation from all sections of the United States, 

12 with financial institutions, their representatives, or 

13 another entity acting on behalf of such institutions, 

14 to discuss examination procedures, examination 

15 practices, or examination policies; 

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

17 examination procedures of the Federal financial in18 stitutions regulatory agencies to ensure that the 

19 written examination policies of those agencies are 

20 being followed in practice and adhere to the stand21 ards for consistency established by the Council; 

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

23 examination quality assurance for all examination 

24 types conducted by the Federal financial institutions 

25 regulatory agencies; 


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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 ‘‘(f) STANDARD FOR REVIEWING EXAMINATION PRO14 CEDURES.—In conducting reviews pursuant to subsection 

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

16 safety and soundness of the financial system of the United 

17 States. 

18 ‘‘(g) REMOVAL.—If the Director is removed from of19 fice, the Council shall communicate in writing the reasons 

20 for any such removal to the Committee on Financial Serv21 ices of the House of Representatives and the Committee 

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

23 not later than 30 days before the removal. 


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

2 confidential all meetings with, discussions with, and infor3 mation provided by financial institutions.’’. 

4 SEC. 5. RIGHT TO INDEPENDENT REVIEW OF MATERIAL SU5 PERVISORY DETERMINATIONS. 

6 The Federal Financial Institutions Examination 

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

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

9 following: 

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

11 SUPERVISORY DETERMINATIONS. 

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

13 the right to obtain an independent review of a material 

14 supervisory determination contained in a final report of 

15 examination. 

16 ‘‘(b) NOTICE.— 

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

18 review of a material supervisory determination under 

19 this section shall file a written notice with the Inde20 pendent Examination Review Director (the ‘Direc21 tor’) within 60 days after receiving the final report 

22 of 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 21:15 Mar 06, 2018 Jkt 079200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H4545.RH H4545

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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 deter13 mine the merits of the appeal on the record or, at 

14 the financial institution’s election, shall refer the ap15 peal to an Administrative Law Judge to conduct a 

16 confidential hearing pursuant to the procedures set 

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

18 States Code, which hearing shall take place not later 

19 than 60 days after the petition for review was re20 ceived by the Director, and to issue a proposed deci21 sion to the Director based upon the record estab22 lished at such hearing. 

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

24 determination or recommendation under this sub25 section, neither the Administrative Law Judge nor 


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1 the Director shall defer to the opinions of the exam2 iner or agency, but shall conduct a de novo review 

3 to independently determine the appropriateness of 

4 the agency’s decision based upon the relevant stat5 utes, regulations, and other appropriate guidance, as 

6 well as evidence adduced at any hearing. 

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

8 on an independent review under this section shall— 

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

10 record has been closed; and 

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

12 agency action and shall bind the agency whose su13 pervisory determination was the subject of the re14 view and the financial institution requesting the re15 view. 

16 ‘‘(e) LIMITED REVIEW BY FFIEC.— 

17 ‘‘(1) IN GENERAL.—If the agency whose super18 visory determination was the subject of the review 

19 believes that the Director’s decision under subsection 

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

21 soundness of the financial institution, such agency 

22 may file a written notice seeking review of the Direc23 tor’s decision with the Council within 10 days of re24 ceiving the Director’s decision. 


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1 ‘‘(2) STANDARD OF REVIEW.—In making a de2 termination under this subsection, the Council shall 

3 conduct a review to determine whether there is sub4 stantial evidence that the Director’s decision would 

5 pose an imminent threat to the safety and soundness 

6 of the financial institution. 

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

8 by the Council shall— 

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

10 the filing of the notice pursuant to paragraph 

11 (1); and 

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

13 shall bind the agency whose supervisory deter14 mination was the subject of the review and the 

15 financial institution requesting the review. 

16 ‘‘(f) RIGHT TO JUDICIAL REVIEW.—A financial insti17 tution shall have the right to petition for review of final 

18 agency action under this section by filing a Petition for 

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

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

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

22 the financial institution is located. 

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

24 the Committee on Financial Services of the House of Rep25 resentatives and the Committee on Banking, Housing, and 


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1 Urban Affairs of the Senate on actions taken under this 

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

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

4 such a report contain information about individual finan5 cial institutions or any confidential or privileged informa6 tion shared by financial institutions. 

7 ‘‘(h) RETALIATION PROHIBITED.—A Federal finan8 cial institutions regulatory agency may not— 

9 ‘‘(1) retaliate against a financial institution, in10 cluding service providers, or any institution-affiliated 

11 party (as defined under section 3 of the Federal De12 posit Insurance Act), for exercising appellate rights 

13 under this section; or 

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

15 would benefit a financial institution or any institu16 tion-affiliated party on the basis that an appeal 

17 under this section is pending under this section. 

18 ‘‘(i) RULE OF CONSTRUCTION.—Nothing in this sec19 tion may be construed— 

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

21 institutions regulatory agency to take enforcement 

22 or other supervisory actions related to a material su23 pervisory determination under review under this sec24 tion; or 


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

2 a material supervisory determination with respect to 

3 which there is an ongoing enforcement or other su4 pervisory action.’’. 

5 SEC. 6. ADDITIONAL AMENDMENTS. 

6 (a) RIEGLE COMMUNITY DEVELOPMENT AND REGU7 LATORY IMPROVEMENT ACT OF 1994.—Section 309 of the 

8 Riegle Community Development and Regulatory Improve9 ment Act of 1994 (12 U.S.C. 4806) is amended— 

10 (1) in subsection (a), by inserting after ‘‘appro11 priate Federal banking agency’’ the following: ‘‘, the 

12 Bureau of Consumer Financial Protection,’’; 

13 (2) in subsection (b)— 

14 (A) in paragraph (2), by striking ‘‘the ap15 pellant from retaliation by agency examiners’’ 

16 and inserting ‘‘the insured depository institu17 tion or insured credit union from retaliation by 

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

19 (B) by adding at the end the following 

20 flush-left text: 

21 ‘‘For purposes of this subsection and subsection (e), retal22 iation includes delaying consideration of, or withholding 

23 approval of, any request, notice, or application that other24 wise would have been approved, but for the exercise of the 

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


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1 (3) in subsection (e)(2)— 

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

3 ‘‘and’’ at the end; 

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

5 period and inserting ‘‘; and’’; and 

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

7 ‘‘(D) ensure that appropriate safeguards 

8 exist for protecting the insured depository insti9 tution or insured credit union from retaliation 

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

11 exercising its rights under this subsection.’’; 

12 and 

13 (4) in subsection (f)(1)(A)— 

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

15 end; 

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

17 end; and 

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

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

20 exam report as a matter requiring atten21 tion by the institution’s management or 

22 board of directors; and 

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

24 institution’s status as eligible for expedited 

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1 tices, or filings on the grounds of a super2 visory or compliance concern, regardless of 

3 whether that concern has been cited as a 

4 basis for another material supervisory de5 termination or matter requiring attention 

6 in an examination report, provided that the 

7 conduct at issue did not involve violation of 

8 any criminal law; and’’. 

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

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

11 amended by inserting ‘‘the Bureau of Consumer Financial 

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

13 term appears. 

14 (c) FEDERAL FINANCIAL INSTITUTIONS EXAMINA15 TION COUNCIL ACT OF 1978.—The Federal Financial In16 stitutions Examination Council Act of 1978 (12 U.S.C. 

17 3301 et seq.) is amended— 

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

19 to read as follows: 

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

21 regulatory agencies’— 

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

23 of the Currency, the Board of Governors of the 

24 Federal Reserve System, the Federal Deposit 


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1 Insurance Corporation, and the National Credit 

2 Union Administration; and 

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

4 and 1014, includes the Bureau of Consumer Fi5 nancial Protection;’’; and 

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

7 inserting ‘‘One-fourth’’. 


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Union Calendar No. 447 

115TH CONGRESS 

2D SESSION H. R. 4545 

[Report No. 115–589] 

A BILL 

To amend the Federal Financial Institutions Exampurposes. ination of depository institutions, and for other ination Council Act of 1978 to improve the examMARCH 6, 2018 

Committed to the Committee of the Whole House on the 

State of the Union and ordered to be printed 


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