115TH CONGRESS 

2D SESSION H. R. 4545 

AN ACT 

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, 
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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Financial Institutions 

3 Examination Fairness and Reform Act’’. 

4 SEC. 2. AMENDMENT TO DEFINITION OF FINANCIAL INSTI5 TUTION. 

6 Section 1003(3) of the Federal Financial Institutions 

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

8 amended to read as follows: 

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

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

11 bank, a trust company, a savings association, a 

12 building and loan association, a homestead as13 sociation, a cooperative bank, or a credit union; 

14 and 

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

16 and 1014, includes a nondepository covered per17 son subject to supervision by the Bureau of 

18 Consumer Financial Protection under section 

19 1024 of the Consumer Financial Protection Act 

20 of 2010 (12 U.S.C. 5514).’’. 

21 SEC. 3. TIMELINESS OF EXAMINATION REPORTS. 

22 The Federal Financial Institutions Examination 

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

24 by adding at the end the following: 

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

26 ‘‘(a) IN GENERAL.— 
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1 ‘‘(1) FINAL EXAMINATION REPORT.—A Federal 

2 financial institutions regulatory agency shall provide 

3 a final examination report to a financial institution 

4 not later than 60 days after the later of— 

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

6 of the institution; or 

7 ‘‘(B) the provision of additional informa8 tion by the institution relating to the examina9 tion. 

10 ‘‘(2) EXIT INTERVIEW.—If a financial institu11 tion is not subject to a resident examiner program, 

12 the exit interview shall occur not later than the end 

13 of the 9-month period beginning on the commence14 ment of the examination, except that such period 

15 may be extended by the Federal financial institu16 tions regulatory agency by providing written notice 

17 to the institution and the Independent Examination 

18 Review Director describing with particularity the 

19 reasons that a longer period is needed to complete 

20 the examination. 

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

22 of a financial institution, the Federal financial institutions 

23 regulatory agency shall include with the final report an 

24 appendix listing all examination or other factual informa-
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1 tion relied upon by the agency in support of a material 

2 supervisory determination.’’. 

3 SEC. 4. INDEPENDENT EXAMINATION REVIEW DIRECTOR. 

4 The Federal Financial Institutions Examination 

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

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

7 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 (the ‘Office’). 

13 ‘‘(b) HEAD OF OFFICE.—There is established the po14 sition of the Independent Examination Review Director 

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

16 shall be appointed by the Council and shall be independent 

17 from any member agency of the Council. 

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

19 5 years, and may be appointed to serve a subsequent 5- 

20 year term. 

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

22 staff to support the activities of the Office. 

23 ‘‘(e) DUTIES.—The Director shall— 

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

25 investigate complaints from financial institutions, 
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1 their representatives, or another entity acting on be2 half of such institutions, concerning examinations, 

3 examination practices, or examination reports; 

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

5 months and in locations designed to encourage par6 ticipation from all sections of the United States, 

7 with financial institutions, their representatives, or 

8 another entity acting on behalf of such institutions, 

9 to discuss examination procedures, examination 

10 practices, or examination policies; 

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

12 examination procedures of the Federal financial in13 stitutions regulatory agencies to ensure that the 

14 written examination policies of those agencies are 

15 being followed in practice and adhere to the stand16 ards for consistency established by the Council; 

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

18 examination quality assurance for all examination 

19 types conducted by the Federal financial institutions 

20 regulatory agencies; 

21 ‘‘(5) adjudicate any supervisory appeal initiated 

22 under section 1014; and 

23 ‘‘(6) report annually to the Committee on Fi24 nancial Services of the House of Representatives, the 

25 Committee on Banking, Housing, and Urban Affairs 
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1 of the Senate, and the Council, on the reviews car2 ried out pursuant to paragraphs (3) and (4), includ3 ing compliance with the requirements set forth in 

4 section 1012 regarding timeliness of examination re5 ports, and the Council’s recommendations for im6 provements in examination procedures, practices, 

7 and policies. 

8 ‘‘(f) STANDARD FOR REVIEWING EXAMINATION PRO9 CEDURES.—In conducting reviews pursuant to subsection 

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

11 safety and soundness of the financial system of the United 

12 States. 

13 ‘‘(g) REMOVAL.—If the Director is removed from of14 fice, the Council shall communicate in writing the reasons 

15 for any such removal to the Committee on Financial Serv16 ices of the House of Representatives and the Committee 

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

18 not later than 30 days before the removal. 

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

20 confidential all meetings with, discussions with, and infor21 mation provided by financial institutions.’’. 

22 SEC. 5. RIGHT TO INDEPENDENT REVIEW OF MATERIAL SU23 PERVISORY DETERMINATIONS. 

24 The Federal Financial Institutions Examination 

25 Council Act of 1978 (12 U.S.C. 3301 et seq.), as amended 
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1 by section 4, is further amended by adding at the end the 

2 following: 

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

4 SUPERVISORY DETERMINATIONS. 

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

6 the right to obtain an independent review of a material 

7 supervisory determination contained in a final report of 

8 examination. 

9 ‘‘(b) NOTICE.— 

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

11 review of a material supervisory determination under 

12 this section shall file a written notice with the Inde13 pendent Examination Review Director (the ‘Direc14 tor’) within 60 days after receiving the final report 

15 of examination that is the subject of such review. 

16 ‘‘(2) IDENTIFICATION OF DETERMINATION.— 

17 The written notice shall identify the material super18 visory determination that is the subject of the inde19 pendent examination review, and a statement of the 

20 reasons why the institution believes that the deter21 mination is incorrect or should otherwise be modi22 fied. 

23 ‘‘(3) INFORMATION TO BE PROVIDED TO INSTI24 TUTION.—Any information relied upon by the agen25 cy in the final report that is not in the possession 
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1 of the financial institution may be requested by the 

2 financial institution and shall be delivered promptly 

3 by the agency to the financial institution. 

4 ‘‘(c) RIGHT TO HEARING.— 

5 ‘‘(1) IN GENERAL.—The Director shall deter6 mine the merits of the appeal on the record or, at 

7 the financial institution’s election, shall refer the ap8 peal to an Administrative Law Judge to conduct a 

9 confidential hearing pursuant to the procedures set 

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

11 States Code, which hearing shall take place not later 

12 than 60 days after the petition for review was re13 ceived by the Director, and to issue a proposed deci14 sion to the Director based upon the record estab15 lished at such hearing. 

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

17 determination or recommendation under this sub18 section, neither the Administrative Law Judge nor 

19 the Director shall defer to the opinions of the exam20 iner or agency, but shall conduct a de novo review 

21 to independently determine the appropriateness of 

22 the agency’s decision based upon the relevant stat23 utes, regulations, and other appropriate guidance, as 

24 well as evidence adduced at any hearing. 
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1 ‘‘(d) FINAL DECISION.—A decision by the Director 

2 on an independent review under this section shall— 

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

4 record has been closed; and 

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

6 agency action and shall bind the agency whose su7 pervisory determination was the subject of the re8 view and the financial institution requesting the re9 view. 

10 ‘‘(e) LIMITED REVIEW BY FFIEC.— 

11 ‘‘(1) IN GENERAL.—If the agency whose super12 visory determination was the subject of the review 

13 believes that the Director’s decision under subsection 

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

15 soundness of the financial institution, such agency 

16 may file a written notice seeking review of the Direc17 tor’s decision with the Council within 10 days of re18 ceiving the Director’s decision. 

19 ‘‘(2) STANDARD OF REVIEW.—In making a de20 termination under this subsection, the Council shall 

21 conduct a review to determine whether there is sub22 stantial evidence that the Director’s decision would 

23 pose an imminent threat to the safety and soundness 

24 of the financial institution. 
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1 ‘‘(3) FINAL DETERMINATION.—A determination 

2 by the Council shall— 

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

4 the filing of the notice pursuant to paragraph 

5 (1); and 

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

7 shall bind the agency whose supervisory deter8 mination was the subject of the review and the 

9 financial institution requesting the review. 

10 ‘‘(f) RIGHT TO JUDICIAL REVIEW.—A financial insti11 tution shall have the right to petition for review of final 

12 agency action under this section by filing a Petition for 

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

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

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

16 the financial institution is located. 

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

18 the Committee on Financial Services of the House of Rep19 resentatives and the Committee on Banking, Housing, and 

20 Urban Affairs of the Senate on actions taken under this 

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

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

23 such a report contain information about individual finan24 cial institutions or any confidential or privileged informa25 tion shared by financial institutions. 
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1 ‘‘(h) RETALIATION PROHIBITED.—A Federal finan2 cial institutions regulatory agency may not— 

3 ‘‘(1) retaliate against a financial institution, in4 cluding service providers, or any institution-affiliated 

5 party (as defined under section 3 of the Federal De6 posit Insurance Act), for exercising appellate rights 

7 under this section; or 

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

9 would benefit a financial institution or any institu10 tion-affiliated party on the basis that an appeal 

11 under this section is pending under this section. 

12 ‘‘(i) RULE OF CONSTRUCTION.—Nothing in this sec13 tion may be construed— 

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

15 institutions regulatory agency to take enforcement 

16 or other supervisory actions related to a material su17 pervisory determination under review under this sec18 tion; or 

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

20 a material supervisory determination with respect to 

21 which there is an ongoing enforcement or other su22 pervisory action.’’. 

23 SEC. 6. ADDITIONAL AMENDMENTS. 

24 (a) RIEGLE COMMUNITY DEVELOPMENT AND REGU25 LATORY IMPROVEMENT ACT OF 1994.—Section 309 of the 
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1 Riegle Community Development and Regulatory Improve2 ment Act of 1994 (12 U.S.C. 4806) is amended— 

3 (1) in subsection (a), by inserting after ‘‘appro4 priate Federal banking agency’’ the following: ‘‘, the 

5 Bureau of Consumer Financial Protection,’’; 

6 (2) in subsection (b)— 

7 (A) in paragraph (2), by striking ‘‘the ap8 pellant from retaliation by agency examiners’’ 

9 and inserting ‘‘the insured depository institu10 tion or insured credit union from retaliation by 

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

12 (B) by adding at the end the following 

13 flush-left text: 

14 ‘‘For purposes of this subsection and subsection (e), retal15 iation includes delaying consideration of, or withholding 

16 approval of, any request, notice, or application that other17 wise would have been approved, but for the exercise of the 

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

19 (3) in subsection (e)(2)— 

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

21 ‘‘and’’ at the end; 

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

23 period and inserting ‘‘; and’’; and 

24 (C) by adding at the end the following: 
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1 ‘‘(D) ensure that appropriate safeguards 

2 exist for protecting the insured depository insti3 tution or insured credit union from retaliation 

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

5 exercising its rights under this subsection.’’; 

6 and 

7 (4) in subsection (f)(1)(A)— 

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

9 end; 

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

11 end; and 

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

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

14 exam report as a matter requiring atten15 tion by the institution’s management or 

16 board of directors; and 

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

18 institution’s status as eligible for expedited 

19 processing of applications, requests, no20 tices, or filings on the grounds of a super21 visory or compliance concern, regardless of 

22 whether that concern has been cited as a 

23 basis for another material supervisory de24 termination or matter requiring attention 

25 in an examination report, provided that the 
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1 conduct at issue did not involve violation of 

2 any criminal law; and’’. 

3 (b) FEDERAL CREDIT UNION ACT.—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 such 

7 term appears. 

8 (c) FEDERAL FINANCIAL INSTITUTIONS EXAMINA9 TION COUNCIL ACT OF 1978.—The Federal Financial In10 stitutions Examination Council Act of 1978 (12 U.S.C. 

11 3301 et seq.) is amended— 

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

13 to read as follows: 

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

15 regulatory agencies’— 

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

17 of the Currency, the Board of Governors of the 

18 Federal Reserve System, the Federal Deposit 

19 Insurance Corporation, and the National Credit 

20 Union Administration; and 

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

22 and 1014, includes the Bureau of Consumer Fi23 nancial Protection;’’; and 

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

25 inserting ‘‘One-fourth’’. 
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1 SEC. 7. REDUCTION OF SURPLUS FUNDS OF FEDERAL RE2 SERVE BANKS. 

3 (a) IN GENERAL.—Section 7(a)(3)(A) of the Federal 

4 Reserve Act (12 U.S.C. 289(a)(3)(A)) is amended by 

5 striking ‘‘$7,500,000,000’’ and inserting 

6 ‘‘$7,324,285,000’’. 

7 (b) EFFECTIVE DATE.—Subsection (a) shall take ef8 fect on June 1, 2018. 

Passed the House of Representatives March 15, 

2018. 

Attest: 

Clerk. 
115TH CONGRESS 

2D SESSION H. R. 4545 

AN ACT 

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