II 

114TH CONGRESS 

1ST SESSION S. 774 

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 

MARCH 18, 2015 

Mr. MORAN (for himself, Mr. MANCHIN, Mr. DAINES, Ms. AYOTTE, Mr. 

PORTMAN, and Mrs. CAPITO) 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 ‘‘Financial Institutions 

5 Examination Fairness and Reform Act’’. 


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1 SEC. 2. 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 Director describing with 

24 particularity the reasons that a longer period is 

25 needed to complete 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. 3. INDEPENDENT EXAMINATION REVIEW DIRECTOR. 

8 (a) IN GENERAL.—The Federal Financial Institu9 tions Examination Council Act of 1978 (12 U.S.C. 3301 

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

11 amended by adding at the end the 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 ‘‘(b) HEAD OF OFFICE.—There is established the po17 sition of the Independent Examination Review Director, 

18 as the head of the Office of Independent Examination Re19 view. The Director shall be appointed by the Federal Fi20 nancial Institutions Examination Council. 

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

22 staff to support the activities of the Office of Independent 

23 Examination Review. 

24 ‘‘(d) DUTIES.—The Director shall— 


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1 ‘‘(1) receive and, at the discretion of the Direc2 tor, investigate complaints from financial institu3 tions, their representatives, or another entity acting 

4 on behalf of such institutions, concerning examina5 tions, examination practices, or examination reports; 

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

7 months and in locations designed to encourage par8 ticipation from all sections of the United States, 

9 with financial institutions, their representatives, or 

10 another entity acting on behalf of such institutions, 

11 to discuss examination procedures, examination 

12 practices, or examination policies; 

13 ‘‘(3) review examination procedures of the Fed14 eral financial institutions regulatory agencies to en15 sure that the written examination policies of those 

16 agencies are being followed in practice and adhere to 

17 the standards for consistency established by the 

18 Council; 

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

20 of examination quality assurance for all examination 

21 types conducted by the Federal financial institutions 

22 regulatory agencies; 

23 ‘‘(5) adjudicate any supervisory appeal initiated 

24 under section 1014; and 


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1 ‘‘(6) report annually to the Committee on Fi2 nancial Services of the House of Representatives, the 

3 Committee on Banking, Housing, and Urban Affairs 

4 of the Senate, and the Council, on the reviews car5 ried out pursuant to paragraphs (3) and (4), includ6 ing compliance with the requirements set forth in 

7 section 1012 regarding timeliness of examination re8 ports, and the Council’s recommendations for im9 provements in examination procedures, practices, 

10 and policies. 

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

12 confidential all meetings, discussions, and information 

13 provided by financial institutions.’’. 

14 (b) DEFINITION.—Section 1003 of the Federal Fi15 nancial Institutions Examination Council Act of 1978 (12 

16 U.S.C. 3302) is amended— 

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

18 end; 

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

20 end; and 

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

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

23 Examination Review Director established under sec24 tion 1013(a) and (b).’’. 


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1 SEC. 4. RIGHT TO INDEPENDENT REVIEW OF MATERIAL SU2 PERVISORY DETERMINATIONS. 

3 The Federal Financial Institutions Examination 

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

5 this Act, is further amended by adding at the end the fol6 lowing: 

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

8 SUPERVISORY DETERMINATIONS. 

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

10 the right to obtain an independent review of a material 

11 supervisory determination contained in a final report of 

12 examination. 

13 ‘‘(b) NOTICE.— 

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

15 review of a material supervisory determination under 

16 this section shall file a written notice with the Direc17 tor within 60 days after receiving the final report of 

18 examination that is the subject of such review. 

19 ‘‘(2) IDENTIFICATION OF DETERMINATION.— 

20 The written notice shall identify the material super21 visory determination that is the subject of the inde22 pendent examination review, and a statement of the 

23 reasons why the institution believes that the deter24 mination is incorrect or should otherwise be modi25 fied. 


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1 ‘‘(3) INFORMATION TO BE PROVIDED TO INSTI2 TUTION.—Any information relied upon by the agen3 cy in the final report that is not in the possession 

4 of the financial institution may be requested by the 

5 financial institution and shall be delivered promptly 

6 by the agency to the financial institution. 

7 ‘‘(c) RIGHT TO HEARING.— 

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

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

10 the record; or 

11 ‘‘(B) at the election of the financial institu12 tion, refer the appeal to an administrative law 

13 judge to conduct a hearing pursuant to the pro14 cedures set forth under sections 556 and 557 of 

15 title 5, United States Code, which shall take 

16 place not later than 60 days after the petition 

17 for review is received by the Director. 

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

19 law judge conducting a hearing under paragraph 

20 (1)(B) shall issue a proposed decision to the Direc21 tor based upon the record established at the hearing. 

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

23 under this subsection— 

24 ‘‘(A) neither the administrative law judge 

25 nor the Director shall defer to the opinions of 


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1 the examiner or agency, but shall independently 

2 determine the appropriateness of the agency’s 

3 decision based upon the relevant statutes, regu4 lations, other appropriate guidance, evidence 

5 presented at the hearing. 

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

7 on an independent review under this section shall— 

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

9 record has been closed; and 

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

11 bind the agency whose supervisory determination 

12 was the subject of the review and the financial insti13 tution requesting the review. 

14 ‘‘(e) RIGHT TO JUDICIAL REVIEW.—A financial insti15 tution shall have the right to petition for review of the 

16 decision of the Director under this section by filing a peti17 tion for review not later than 60 days after the date on 

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

19 Appeals for the District of Columbia Circuit or the Circuit 

20 in which the financial institution is located. 

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

22 the Committee on Financial Services of the House of Rep23 resentatives, the Committee on Banking, Housing, and 

24 Urban Affairs of the Senate on actions taken under this 

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


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

2 such a report contain information about individual finan3 cial institutions or any confidential or privileged informa4 tion shared by financial institutions. 

5 ‘‘(g) RETALIATION PROHIBITED.—A Federal finan6 cial institutions regulatory agency may not— 

7 ‘‘(1) retaliate against a financial institution, in8 cluding service providers, or any institution-affiliated 

9 party, for exercising appellate rights under this sec10 tion; or 

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

12 would benefit a financial institution or any institu13 tion-affiliated party on the basis that an appeal 

14 under this section is pending under this section.’’. 

15 SEC. 5. ADDITIONAL AMENDMENTS. 

16 (a) REGULATOR APPEALS PROCESS, OMBUDSMAN, 

17 AND ALTERNATIVE DISPUTE RESOLUTION.— 

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

19 Community Development and Regulatory Improve20 ment Act of 1994 (12 U.S.C. 4806) is amended— 

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

22 ‘‘appropriate Federal banking agency’’ the fol23 lowing: ‘‘, the Bureau of Consumer Financial 

24 Protection,’’; 

25 (B) in subsection (b)— 


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1 (i) by redesignating paragraphs (1) 

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

3 indenting appropriately; 

4 (ii) in the matter preceding subpara5 graph (A) (as redesignated), by striking 

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

7 GENERAL.—In establishing’’; 

8 (iii) in paragraph (1)(B) (as redesig9 nated), by striking ‘‘the appellant from re10 taliation by agency examiners’’ and insert11 ing ‘‘the insured depository institution or 

12 insured credit union from retaliation by an 

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

14 (iv) by adding at the end the fol15 lowing: 

16 ‘‘(2) RETALIATION.—For purposes of this sub17 section and subsection (e), retaliation includes delay18 ing consideration of, or withholding approval of, any 

19 request, notice, or application that otherwise would 

20 have been approved, but for the exercise of the insti21 tution’s or credit union’s rights under this section.’’; 

22 (C) in subsection (e)(2)— 

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

24 ‘‘and’’ at the end; 


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

2 the period and inserting ‘‘; and’’; and 

3 (iii) by adding at the end the fol4 lowing: 

5 ‘‘(D) ensure that appropriate safeguards 

6 exist for protecting the insured depository insti7 tution or insured credit union from retaliation 

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

9 exercising its rights under this subsection.’’; 

10 and 

11 (D) in subsection (f)(1)(A)— 

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

13 and inserting a semicolon; 

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

15 and inserting a semicolon; and 

16 (iii) by adding at the end the fol17 lowing: 

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

19 exam report as a matter requiring atten20 tion by the institution’s management or 

21 board of directors; and 

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

23 institution’s status as eligible for expedited 

24 processing of applications, requests, no25 tices, or filings on the grounds of a superVerDate Sep 11 2014 21:56 Mar 23, 2015 Jkt 049200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S774.IS S774

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1 visory or compliance concern, regardless of 

2 whether that concern has been cited as a 

3 basis for a material supervisory determina4 tion or matter requiring attention in an ex5 amination report, provided that the con6 duct at issue did not involve violation of 

7 any criminal law; and’’. 

8 (2) EFFECT.—Nothing in this subsection af9 fects the authority of an appropriate Federal bank10 ing agency or the National Credit Union Adminis11 tration Board to take enforcement or other super12 visory action. 

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

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

15 amended by inserting ‘‘the Bureau of Consumer Financial 

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

17 term appears. 

18 (c) FEDERAL FINANCIAL INSTITUTIONS EXAMINA19 TION COUNCIL ACT.—The Federal Financial Institutions 

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

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

22 is further amended— 

23 (1) in section 1003 (12 U.S.C. 3302)— 

24 (A) by striking paragraph (1) and insert25 ing the following: 


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

2 regulatory agencies’— 

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

4 of the Currency, the Board of Governors of the 

5 Federal Reserve System, the Federal Deposit 

6 Insurance Corporation, and the National Credit 

7 Union Administration; and 

8 ‘‘(B) includes the Bureau of Consumer Fi9 nancial Protection for purposes of sections 

10 1012 through 1014;’’; and 

11 (B) in paragraph (3), by striking the semi12 colon at the end and inserting a period; and 

13 (2) in section 1005 (12 U.S.C. 3304), by strik14 ing ‘‘One-fifth’’ and inserting ‘‘One-fourth’’. 

Æ 


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