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

Summary:
Financial Institutions Examination Fairness and Reform Act
This bill (1) sets deadlines for final examination reports and exit interviews of a financial institution by a federal financial regulatory agency, and (2) establishes the Office of Independent Examination Review to adjudicate appeals and investigate complaints from financial institutions concerning examination reports.
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 117th Congress]
[From the U.S. Government Publishing Office]
[S. 5049 Introduced in Senate (IS)]

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117th CONGRESS
  2d Session
                                S. 5049

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

                           September 29, 2022

   Mr. Moran 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.

    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. 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 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. 3. INDEPENDENT EXAMINATION REVIEW DIRECTOR.

    (a) In General.--The Federal Financial Institutions Examination 
Council Act of 1978 (12 U.S.C. 3301 et seq.), as amended by section 2 
of this Act, 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.
    ``(b) Head of Office.--There is established the position of the 
Independent Examination Review Director, as the head of the Office of 
Independent Examination Review. The Director shall be appointed by the 
Federal Financial Institutions Examination Council.
    ``(c) Staffing.--The Director is authorized to hire staff to 
support the activities of the Office of Independent Examination Review.
    ``(d) Duties.--The Director shall--
            ``(1) receive and, at the discretion of the Director, 
        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) 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 program 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.
    ``(e) Confidentiality.--The Director shall keep confidential all 
meetings, discussions, and information provided by financial 
institutions.''.
    (b) Definition.--Section 1003 of the Federal Financial Institutions 
Examination Council Act of 1978 (12 U.S.C. 3302) is amended--
            (1) in paragraph (2), by striking ``and'' at the end;
            (2) in paragraph (3), by adding ``and'' at the end; and
            (3) by adding at the end the following:
            ``(4) the term `Director' means the Independent Examination 
        Review Director established under section 1013(a) and (b).''.

SEC. 4. RIGHT TO INDEPENDENT REVIEW OF MATERIAL SUPERVISORY 
              DETERMINATIONS.

    The Federal Financial Institutions Examination Council Act of 1978, 
as amended by sections 2 and 3 of this Act, 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 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--
                    ``(A) determine the merits of the appeal on the 
                record; or
                    ``(B) at the election of the financial institution, 
                refer the appeal to an administrative law judge to 
                conduct a hearing pursuant to the procedures set forth 
                under sections 556 and 557 of title 5, United States 
                Code, which shall take place not later than 60 days 
                after the petition for review is received by the 
                Director.
            ``(2) Timing of decision.--An administrative law judge 
        conducting a hearing under paragraph (1)(B) shall issue a 
        proposed decision to the Director based upon the record 
        established at the hearing.
            ``(3) Standard of review.--In any hearing under this 
        subsection--
                    ``(A) neither the administrative law judge nor the 
                Director shall defer to the opinions of the examiner or 
                agency, but shall independently determine the 
                appropriateness of the agency's decision based upon the 
                relevant statutes, regulations, other appropriate 
                guidance, and evidence presented at the 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) be deemed 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) Right to Judicial Review.--A financial institution shall have 
the right to petition for review of the decision of the Director under 
this section by filing a petition for review not later than 60 days 
after the date on which the decision is made in the United States Court 
of Appeals for the District of Columbia Circuit or the Circuit in which 
the financial institution is located.
    ``(f) Report.--The Director shall report annually to the Committee 
on Financial Services of the House of Representatives, 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.
    ``(g) Retaliation Prohibited.--A Federal financial institutions 
regulatory agency may not--
            ``(1) retaliate against a financial institution, including 
        service providers, or any institution-affiliated party, 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.''.

SEC. 5. ADDITIONAL AMENDMENTS.

    (a) Regulator Appeals Process, Ombudsman, and Alternative Dispute 
Resolution.--
            (1) In general.--Section 309 of the Riegle Community 
        Development and Regulatory Improvement Act of 1994 (12 U.S.C. 
        4806) is amended--
                    (A) in subsection (a), by inserting after 
                ``appropriate Federal banking agency'' the following: 
                ``, the Bureau of Consumer Financial Protection,'';
                    (B) in subsection (b)--
                            (i) by redesignating paragraphs (1) and (2) 
                        as subparagraphs (A) and (B) and indenting 
                        appropriately;
                            (ii) in the matter preceding subparagraph 
                        (A) (as redesignated), by striking ``In 
                        establishing'' and inserting ``(1) In 
                        general.--In establishing'';
                            (iii) in paragraph (1)(B) (as 
                        redesignated), by striking ``the appellant from 
                        retaliation by agency examiners'' and inserting 
                        ``the insured depository institution or insured 
                        credit union from retaliation by an agency 
                        referred to in subsection (a)''; and
                            (iv) by adding at the end the following:
            ``(2) Retaliation.--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.'';
                    (C) in subsection (e)(2)--
                            (i) in subparagraph (B), by striking 
                        ``and'' at the end;
                            (ii) in subparagraph (C), by striking the 
                        period and inserting ``; and''; and
                            (iii) 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
                    (D) in subsection (f)(1)(A)--
                            (i) in clause (ii), by striking ``; and'' 
                        and inserting a semicolon;
                            (ii) in clause (iii), by striking ``; and'' 
                        and inserting a semicolon; and
                            (iii) 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 a 
                        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''.
            (2) Effect.--Nothing in this subsection affects the 
        authority of an appropriate Federal banking agency or the 
        National Credit Union Administration Board to take enforcement 
        or other supervisory action.
    (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 that term appears.
    (c) Federal Financial Institutions Examination Council Act.--The 
Federal Financial Institutions Examination Council Act of 1978 (12 
U.S.C. 3301 et seq.), as amended by sections 2 through 4 of this Act, 
is further amended--
            (1) in section 1003 (12 U.S.C. 3302) by striking paragraph 
        (1) and inserting the following:
            ``(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) includes the Bureau of Consumer Financial 
                Protection for purposes of sections 1012 through 
                1014;''; and
            (2) in section 1005 (12 U.S.C. 3304), by striking ``One-
        fifth'' and inserting ``One-fourth''.
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