[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4545 Referred in Senate (RFS)]
<DOC>
115th CONGRESS
2d Session
H. R. 4545
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
March 19, 2018
Received; read twice and referred to the Committee on Banking,
Housing, and Urban Affairs
_______________________________________________________________________
AN ACT
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''.
SEC. 7. REDUCTION OF SURPLUS FUNDS OF FEDERAL RESERVE BANKS.
(a) In General.--Section 7(a)(3)(A) of the Federal Reserve Act (12
U.S.C. 289(a)(3)(A)) is amended by striking ``$7,500,000,000'' and
inserting ``$7,324,285,000''.
(b) Effective Date.--Subsection (a) shall take effect on June 1,
2018.
Passed the House of Representatives March 15, 2018.
Attest:
KAREN L. HAAS,
Clerk.