Title: Financial Institutions Examination Fairness and Reform Act
Policy area: Finance and Financial Sector

Summary:
Financial Institutions Examination Fairness and Reform Act
This bill amends the Federal Financial Institutions Examination Council Act of 1978 to:
The bill also requires the establishment of an independent internal agency appellate process at the Consumer Financial Protection Bureau (CFPB) for the review of supervisory determinations made at institutions supervised by the CFPB.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4545 Introduced in House (IH)]

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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.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Financial Institutions Examination 
Fairness and Reform Act''.

SEC. 2. AMENDMENT TO DEFINITION OF FINANCIAL INSTITUTION.

    Section 1003(3) of the Federal Financial Institutions Examination 
Council Act of 1978 (12 U.S.C. 3302(3)) is amended to read as follows:
            ``(3) the term `financial institution'--
                    ``(A) means a commercial bank, a savings bank, a 
                trust company, a savings association, a building and 
                loan association, a homestead association, a 
                cooperative bank, or a credit union; and
                    ``(B) for purposes of sections 1012, 1013, and 
                1014, includes a nondepository covered person subject 
                to supervision by the Bureau of Consumer Financial 
                Protection under section 1024 of the Consumer Financial 
                Protection Act of 2010 (12 U.S.C. 5514).''.

SEC. 3. TIMELINESS OF EXAMINATION REPORTS.

    The Federal Financial Institutions Examination Council Act of 1978 
(12 U.S.C. 3301 et seq.) is amended by adding at the end the following:

``SEC. 1012. TIMELINESS OF EXAMINATION REPORTS.

    ``(a) In General.--
            ``(1) Final examination report.--A Federal financial 
        institutions regulatory agency shall provide a final 
        examination report to a financial institution not later than 60 
        days after the later of--
                    ``(A) the exit interview for an examination of the 
                institution; or
                    ``(B) the provision of additional information by 
                the institution relating to the examination.
            ``(2) Exit interview.--If a financial institution is not 
        subject to a resident examiner program, the exit interview 
        shall occur not later than the end of the 9-month period 
        beginning on the commencement of the examination, except that 
        such period may be extended by the Federal financial 
        institutions regulatory agency by providing written notice to 
        the institution and the Independent Examination Review Director 
        describing with particularity the reasons that a longer period 
        is needed to complete the examination.
    ``(b) Examination Materials.--Upon the request of a financial 
institution, the Federal financial institutions regulatory agency shall 
include with the final report an appendix listing all examination or 
other factual information relied upon by the agency in support of a 
material supervisory determination.''.

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. 1013. OFFICE OF INDEPENDENT EXAMINATION REVIEW.

    ``(a) Establishment.--There is established in the Council an Office 
of Independent Examination Review (the `Office').
    ``(b) Head of Office.--There is established the position 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) Term.--The Director shall serve for a term of 5 years, and 
may be appointed to serve a subsequent 5-year term.
    ``(d) Staffing.--The Director is authorized to hire staff to 
support the activities of the Office.
    ``(e) Duties.--The Director shall--
            ``(1) receive and, at the Director's discretion, 
        investigate complaints from financial institutions, their 
        representatives, or another entity acting on behalf 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 participation from all 
        sections of the United States, with financial institutions, 
        their representatives, or another entity acting on behalf of 
        such institutions, to discuss examination procedures, 
        examination practices, or examination policies;
            ``(3) in accordance with subsection (f), review examination 
        procedures of the Federal financial institutions regulatory 
        agencies to ensure 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 1014; and
            ``(6) report annually to the Committee on Financial 
        Services of the House of Representatives, the Committee on 
        Banking, Housing, and Urban Affairs of the Senate, and the 
        Council, on the reviews carried out pursuant to paragraphs (3) 
        and (4), including compliance with the requirements set forth 
        in section 1012 regarding timeliness of examination reports, 
        and the Council's recommendations for improvements in 
        examination procedures, practices, and policies.
    ``(f) Standard for Reviewing Examination Procedures.--In conducting 
reviews pursuant to subsection (e)(4), the Director shall prioritize 
factors relating to the safety and soundness of the financial system of 
the United States.
    ``(g) Removal.--If the Director is removed from office, the Council 
shall communicate in writing the reasons for any such removal to the 
Committee on Financial Services of the House of Representatives and the 
Committee on Banking, Housing, and Urban Affairs of the Senate not 
later than 30 days before the removal.
    ``(h) Confidentiality.--The Director shall keep confidential all 
meetings with, discussions with, and information provided by financial 
institutions.''.

SEC. 5. RIGHT TO INDEPENDENT REVIEW OF MATERIAL SUPERVISORY 
              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. 1014. 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 Independent Examination Review 
        Director (the `Director') within 60 days after receiving the 
        final report of examination that is the subject of such review.
            ``(2) Identification of determination.--The written notice 
        shall identify the material supervisory determination that is 
        the subject of the independent examination review, and a 
        statement of the reasons why the institution believes that the 
        determination is incorrect or should otherwise be modified.
            ``(3) Information to be provided to institution.--Any 
        information relied upon by the agency 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 determine the merits 
        of the appeal on the record or, at the financial institution's 
        election, shall refer the appeal 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 received by the Director, and 
        to issue a proposed decision to the Director based upon the 
        record established at such hearing.
            ``(2) Standard of review.--In rendering a determination or 
        recommendation under this subsection, neither the 
        Administrative Law Judge nor the Director shall defer to the 
        opinions of the examiner or agency, but shall conduct a de novo 
        review to independently determine the appropriateness of the 
        agency's decision based upon the relevant statutes, 
        regulations, and other appropriate guidance, as well as 
        evidence adduced at any hearing.
    ``(d) Final Decision.--A decision by the Director on an independent 
review under this section shall--
            ``(1) be made not later than 60 days after the record has 
        been closed; and
            ``(2) subject to subsection (e), be deemed a final agency 
        action and shall bind the agency whose supervisory 
        determination was the subject of the review and the financial 
        institution requesting the review.
    ``(e) Limited Review by FFIEC.--
            ``(1) In general.--If the agency whose supervisory 
        determination was the subject of the review believes that the 
        Director's decision under subsection (d) would pose an imminent 
        threat to the safety and soundness of the financial 
        institution, such agency may file a written notice seeking 
        review of the Director's decision with the Council within 10 
        days of receiving the Director's decision.
            ``(2) Standard of review.--In making a determination under 
        this subsection, the Council shall conduct a review to 
        determine whether there is substantial evidence that the 
        Director's decision would pose an imminent threat to the safety 
        and soundness of the financial institution.
            ``(3) Final determination.--A determination by the Council 
        shall--
                    ``(A) be made not later than 30 days after the 
                filing of the notice pursuant to paragraph (1); and
                    ``(B) be deemed a final agency action and shall 
                bind the agency whose supervisory determination was the 
                subject of the review and the financial institution 
                requesting the review.
    ``(f) Right to Judicial Review.--A financial institution shall have 
the right to petition for review of final agency action under this 
section by filing a Petition for Review within 60 days of the 
Director's decision or the Council's decision in the United States 
Court of Appeals for the District of Columbia Circuit or the Circuit in 
which the financial institution is located.
    ``(g) Report.--The Director shall report annually to the Committee 
on Financial Services of the House of Representatives and the Committee 
on Banking, Housing, and Urban Affairs of the Senate on actions taken 
under this section, including the types of issues that the Director has 
reviewed and the results of those reviews. In no case shall such a 
report contain information about individual financial institutions or 
any confidential or privileged information shared by financial 
institutions.
    ``(h) Retaliation Prohibited.--A Federal financial institutions 
regulatory agency may not--
            ``(1) retaliate against a financial institution, including 
        service providers, or any institution-affiliated party (as 
        defined under section 3 of the Federal Deposit Insurance Act), 
        for exercising appellate rights under this section; or
            ``(2) delay or deny any agency action that would benefit a 
        financial institution or any institution-affiliated party on 
        the basis that an appeal under this section is pending under 
        this section.
    ``(i) Rule of Construction.--Nothing in this section may be 
construed--
            ``(1) to affect the right of a Federal financial 
        institutions regulatory agency to take enforcement or other 
        supervisory actions related to a material supervisory 
        determination under review under this section; or
            ``(2) to prohibit the review under this section of a 
        material supervisory determination with respect to which there 
        is an ongoing enforcement or other supervisory action.''.

SEC. 6. ADDITIONAL AMENDMENTS.

    (a) Riegle Community Development and Regulatory Improvement Act of 
1994.--Section 309 of the Riegle Community Development and Regulatory 
Improvement Act of 1994 (12 U.S.C. 4806) is amended--
            (1) in subsection (a), by inserting after ``appropriate 
        Federal banking agency'' the following: ``, the Bureau of 
        Consumer Financial Protection,'';
            (2) in subsection (b)--
                    (A) in paragraph (2), by striking ``the appellant 
                from retaliation by agency examiners'' and inserting 
                ``the insured depository institution or insured credit 
                union from retaliation by the agencies referred to in 
                subsection (a)''; and
                    (B) by adding at the end the following flush-left 
                text:
``For purposes of this subsection and subsection (e), retaliation 
includes delaying consideration of, or withholding approval of, any 
request, notice, or application that otherwise would have been 
approved, but for the exercise of the institution's or credit union's 
rights under this section.'';
            (3) in subsection (e)(2)--
                    (A) in subparagraph (B), by striking ``and'' at the 
                end;
                    (B) in subparagraph (C), by striking the period and 
                inserting ``; and''; and
                    (C) by adding at the end the following:
                    ``(D) ensure that appropriate safeguards exist for 
                protecting the insured depository institution or 
                insured credit union from retaliation by any agency 
                referred to in subsection (a) for exercising its rights 
                under this subsection.''; and
            (4) in subsection (f)(1)(A)--
                    (A) in clause (ii), by striking ``and'' at the end;
                    (B) in clause (iii), by striking ``and'' at the 
                end; and
                    (C) by adding at the end the following:
                            ``(iv) any issue specifically listed in an 
                        exam report as a matter requiring attention by 
                        the institution's management or board of 
                        directors; and
                            ``(v) any suspension or removal of an 
                        institution's status as eligible for expedited 
                        processing of applications, requests, notices, 
                        or filings on the grounds of a supervisory or 
                        compliance concern, regardless of whether that 
                        concern has been cited as a basis for another 
                        material supervisory determination or matter 
                        requiring attention in an examination report, 
                        provided that the conduct at issue did not 
                        involve violation of any criminal law; and''.
    (b) Federal Credit Union Act.--Section 205(j) of the Federal Credit 
Union Act (12 U.S.C. 1785(j)) is amended by inserting ``the Bureau of 
Consumer Financial Protection,'' before ``the Administration'' each 
place such term appears.
    (c) Federal Financial Institutions Examination Council Act of 
1978.--The Federal Financial Institutions Examination Council Act of 
1978 (12 U.S.C. 3301 et seq.) is amended--
            (1) in section 1003, by amending paragraph (1) to read as 
        follows:
            ``(1) the term `Federal financial institutions regulatory 
        agencies'--
                    ``(A) means the Office of the Comptroller of the 
                Currency, the Board of Governors of the Federal Reserve 
                System, the Federal Deposit Insurance Corporation, and 
                the National Credit Union Administration; and
                    ``(B) for purposes of sections 1012, 1013, and 
                1014, includes the Bureau of Consumer Financial 
                Protection;''; and
            (2) in section 1005, by striking ``One-fifth'' and 
        inserting ``One-fourth''.
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