rower demonstrates the ability to perform on such 
loan over a maximum period of 6 months, except 
that with respect to loans on a quarterly, semi-
annual, or longer repayment schedule such period 
shall be a maximum of 3 consecutive repayment pe-
riods; 
‘‘(3) a new appraisal on a performing commer-
cial loan shall not be required unless an advance of 
new funds is involved; and 
‘‘(4) in classifying a commercial loan in which 
there has been deterioration in collateral value, the 
amount to be classified shall be the portion of the 
deficiency relating to the decline in collateral value 
and repayment capacity of the borrower. 
‘‘(b) WELL CAPITALIZED INSTITUTIONS.—The Fed-
eral financial institutions regulatory agencies may not re-
quire a financial institution that is well capitalized to raise 
additional capital in lieu of an action prohibited under 
subsection (a). 
‘‘(c) CONSISTENT
LOAN
CLASSIFICATIONS.—The 
Federal financial institutions regulatory agencies shall de-
velop and apply identical definitions and reporting require-
ments for non-accrual loans.’’. 
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SEC. 4. INDEPENDENT EXAMINATION REVIEW DIRECTOR. 
The Federal Financial Institutions Examination 
Council Act of 1978 (12 U.S.C. 3301 et seq.), as amended 
by section 3, is further amended by adding at the end the 
following: 
‘‘SEC. 1014. OFFICE OF INDEPENDENT EXAMINATION RE-
VIEW. 
‘‘(a) ESTABLISHMENT.—There is established in the 
Council an Office of Independent Examination Review 
(the ‘Office’). 
‘‘(b) HEAD OF OFFICE.—There is established the po-
sition of the Independent Examination Review Director 
(the ‘Director’), as the head of the Office. The Director 
shall be appointed by the Council and shall be independent 
from any member agency of the Council. 
‘‘(c) STAFFING.—The Director is authorized to hire 
staff to support the activities of the Office. 
‘‘(d) DUTIES.—The Director shall— 
‘‘(1) receive and, at the Director’s discretion, 
investigate complaints from financial institutions, 
their representatives, or another entity acting on be-
half of such institutions, concerning examinations, 
examination practices, or examination reports; 
‘‘(2) hold meetings, at least once every three 
months and in locations designed to encourage par-
ticipation from all sections of the United States, 
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with financial institutions, their representatives, or 
another entity acting on behalf of such institutions, 
to discuss examination procedures, examination 
practices, or examination policies; 
‘‘(3) review examination procedures of the Fed-
eral financial institutions regulatory agencies to en-
sure that the written examination policies of those 
agencies are being followed in practice and adhere to 
the standards for consistency established by the 
Council; 
‘‘(4) conduct a continuing and regular review of 
examination quality assurance for all examination 
types conducted by the Federal financial institutions 
regulatory agencies; 
‘‘(5) adjudicate any supervisory appeal initiated 
under section 1015; and 
‘‘(6) report annually to the Committee on Fi-
nancial Services of the House of Representatives, the 
Committee on Banking, Housing, and Urban Affairs 
of the Senate, and the Council, on the reviews car-
ried out pursuant to paragraphs (3) and (4), includ-
ing compliance with the requirements set forth in 
section 1012 regarding timeliness of examination re-
ports, and the Council’s recommendations for im-
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provements in examination procedures, practices, 
and policies. 
‘‘(e) CONFIDENTIALITY.—The Director shall keep 
confidential all meetings with, discussions with, and infor-
mation provided by financial institutions.’’. 
SEC. 5. RIGHT TO INDEPENDENT REVIEW OF MATERIAL SU-
PERVISORY DETERMINATIONS. 
The Federal Financial Institutions Examination 
Council Act of 1978 (12 U.S.C. 3301 et seq.), as amended 
by section 4, is further amended by adding at the end the 
following: 
‘‘SEC. 1015. RIGHT TO INDEPENDENT REVIEW OF MATERIAL 
SUPERVISORY DETERMINATIONS. 
‘‘(a) IN GENERAL.—A financial institution shall have 
the right to obtain an independent review of a material 
supervisory determination contained in a final report of 
examination. 
‘‘(b) NOTICE.— 
‘‘(1) TIMING.—A financial institution seeking 
review of a material supervisory determination under 
this section shall file a written notice with the Inde-
pendent Examination Review Director (the ‘Direc-
tor’) within 60 days after receiving the final report 
of examination that is the subject of such review. 
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‘‘(2) IDENTIFICATION
OF
DETERMINATION.— 
The written notice shall identify the material super-
visory determination that is the subject of the inde-
pendent examination review, and a statement of the 
reasons why the institution believes that the deter-
mination is incorrect or should otherwise be modi-
fied. 
‘‘(3) INFORMATION TO BE PROVIDED TO INSTI-
TUTION.—Any information relied upon by the agen-
cy in the final report that is not in the possession 
of the financial institution may be requested by the 
financial institution and shall be delivered promptly 
by the agency to the financial institution. 
‘‘(c) RIGHT TO HEARING.— 
‘‘(1) IN GENERAL.—The Director shall deter-
mine the merits of the appeal on the record or, at 
the financial institution’s election, shall refer the ap-
peal to an Administrative Law Judge to conduct a 
confidential hearing pursuant to the procedures set 
forth under sections 556 and 557 of title 5, United 
States Code, which hearing shall take place not later 
than 60 days after the petition for review was re-
ceived by the Director, and to issue a proposed deci-
sion to the Director based upon the record estab-
lished at such hearing. 
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