FAIR Exams Act · Reported in House (2025-07-25)

119th CONGRESS 1st Session

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 · February 4, 2025 · Sponsor: Mr. Hill of Arkansas · Committee: Committee on Financial Services

SEC. 2. Timeliness of examinations and examination reports

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

(a) Timeliness of examinations
- A Federal financial institutions regulatory agency shall complete any examination of a financial institution within 270 days of commencing the examination, except that such period may be extended by the Federal financial institutions regulatory agency by providing written notice to the financial institution describing with particularity the reasons that a longer period is needed.
(b) Final examination report
- A Federal financial institutions regulatory agency shall provide a final examination report to a financial institution not later than 90 days after the later of—
  - the exit interview for an examination of the institution; or
  - the provision of additional material information by the institution relating to the examination.
(c) Exit interview requirement
- Within 30 days of completing an examination, a Federal financial institutions regulatory agency shall conduct an exit interview with the financial institution’s senior management, except that such period may be extended by the Federal financial institutions regulatory agency by providing written notice to the institution and the Board describing with particularity the reasons that a longer period is needed to complete the exit interview.
(d) 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. Timeliness of required permission, regulatory, and reporting guidance

The Federal Financial Institutions Examination Council Act of 1978 (), as amended by section 2, is further amended by adding at the end the following: 12 U.S.C. 3301 et seq.

(a) Request for permission or guidance
- With respect to an action that a financial institution is taking or is intending to take, the financial institution may request a written determination by the applicable Federal financial institutions regulatory agency of—
  - the agency’s non-objection to the financial institution conducting a particular activity;
  - the agency’s interpretation of a law or regulation; and
  - the agency’s interpretation of generally accepted accounting principles or accounting objectives, standards, and requirements.
(b) Contents of request
- A request made under subsection (a) shall be in writing and contain—
  - the nature of the request;
  - applicable facts relating to the matter;
  - applicable law, regulation, or generally accepted accounting principles relating to the matter; and
  - a summary of the request.
(c) Response to request
- A Federal financial institutions regulatory agency receiving a request under subsection (a) shall, not later than 30 days after receiving the request—
  - provide the financial institution making the request with written notification that the agency received the request and stating whether the request contains all of the information required under subsection (b); and
  - if the request does not contain all of the information required under subsection (b), provide the financial institution with an explanation of what information is missing.
(d) Providing missing information
- If a Federal financial institutions regulatory agency informs the financial institution under subsection (c) that the request does not contain all the information required under subsection (b), the financial institution may provide the missing information to the Federal financial institutions regulatory agency during the 30-day period beginning on the date the financial institution receives the explanation of the missing information under subsection (c).
(e) Determination
- A Federal financial institutions regulatory agency receiving a request under subsection (a) shall make a determination on the request and provide the financial institution with a written notice of such determination—
  - if the initial request contains the information required under subsection (b), not later than the end of the 60-day period beginning on the date the Federal financial institutions regulatory agency notifies the financial institution of the receipt of the request under subsection (c); or
  - if the initial request does not contain the information required under subsection (b), but the financial institution provides the missing information during the 30-day period described under subsection (d), not later than the end of the 60-day period beginning on the date such missing information is provided; or

SEC. 4. Office of Independent Examination Review

(a) In general

The Federal Financial Institutions Examination Council Act of 1978 (), as amended by section 3, is further amended by adding at the end the following: 12 U.S.C. 3301 et seq.
- (a) Establishment
  - There is established in the Council an Office of Independent Examination Review (the ).
- (b) Board of Independent Examination Review
  - (1) In general
    - The head of the Office shall be the Board of Independent Examination Review, which shall be comprised of 3 members, appointed by the President, by and with the advice and consent of the Senate.
  - (2) Qualifications
    - The President shall appoint the 1 member of the Board from each of the following classes of individuals:
      - Individuals who have been employed by a Federal financial institutions regulatory agency.
      - Individuals who—
        
        (i) are a licensed attorney or a certified public accountant authorized to practice under the laws of a State, the District of Columbia, or a territory of the United States;
        
        (ii) have either academic or private sector experience;
        
        (iii) have relevant work-related experience in consumer affairs or compliance with consumer protection laws with respect to financial institutions; and
        
        (iv) are not, and were not during the previous 10-year period, employed by a Federal banking agency, a Federal reserve bank, or the National Credit Union Administration.
      - Individuals—
        
        (i) with at least 10 years private sector financial services senior management-level experience; and
        
        (ii) recommended by—
        
        an insured depository institution;
        
        an insured credit union; or
        
        a trade association for such institutions or credit unions.
  - (3) Prohibition on certain individuals serving as a Board member
    - The President may not appoint an individual as a member of the Board if the individual—
      - is, or was during the previous 2-year period, employed by a Federal financial institutions regulatory agency or a Federal reserve bank;
      - is, or was during the previous 2-year period, employed by a financial institution; or
      - is reporting, or was reporting in the past 5 years, directly or indirectly to a Federal financial institutions regulatory agency official who makes material supervisory determinations.
  - (4) Consultation
    - In appointing members of the Board, the President shall consult with the Federal financial institutions regulatory agencies and financial institutions.
  - (5) Term
    - (A) In general
      - Each member of the Board shall serve for a term of 3 years.

SEC. 5. Right to independent review of material supervisory determinations

The Federal Financial Institutions Examination Council Act of 1978 (), as amended by section 4, is further amended by adding at the end the following: 12 U.S.C. 3301 et seq.

(a) In general
- A financial institution shall have the right to obtain an independent review, as described in this section, 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 Board within 60 days after receiving the final report of examination that is the subject of such review.
- (2) Extension
  - The institution may file a written request with the Board for an extension of the 60-day time period described under paragraph (1), which shall state good cause for granting the extension. Such request shall be granted in the sole discretion of the Board.
- (3) Identification of determination
  - The written notice shall—
    - identify the material supervisory determination that is the subject of the requested independent examination review;
    - state the reasons why the institution believes that the material supervisory determination is incorrect or should otherwise be modified; and
    - include—
      - (i) a clear and complete statement of all relevant facts and issues;
      - (ii) all arguments that the institution wishes to present; and
      - (iii) all relevant and material documents in the possession of the institution that the institution wishes to be considered.
- (4) Information made available to institution
  - An institution seeking an appeal of a material supervisory determination may, not later than 7 days after receiving the final examination report, request that the Federal financial institutions regulatory agency that made the material supervisory determination provide the institution with all examination and factual information relied upon by the agency in making the material supervisory determination. The agency shall provide that information to the institution not later than 14 days after receiving the request.
(c) Determination; right to hearing
- (1) In general
  - The Board shall—
    - determine the merits of the appeal on the record, including whether the material supervisory determination being appealed should be upheld, canceled, or modified; or
    - at the election of the financial institution, conduct a hearing, which shall take place not later than 60 days after the petition for review is received by the Board.
- (2) Right to obtain testimony
  - A financial institution electing for a hearing under paragraph (1)(B) shall have the right the obtain testimony under oath from agency employees and obtain documents and other evidence at the hearing, or in advance of the hearing, according to procedures instituted by the Board consistent with those set forth under sections 556 and 557 of title 5, United States Code.

SEC. 6. 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 () is amended— 12 U.S.C. 4806
  - in the heading, by striking and inserting (and by conforming the item relating to such section in the table of contents accordingly);
  - by striking subsections (a), (b), and (c);
  - by redesignating subsections (d), (e), (f), and (g) as subsections (a), (b), (c), and (d), respectively;
  - in subsection (b), as so redesignated—
    - (i) in paragraph (2)—
    - in subparagraph (B), by striking and at the end;
    - in subparagraph (C), by striking the period and inserting ; and; and
      - ensure that appropriate safeguards exist for protecting any party from retaliation by any agency for exercising rights under this subsection.
    - by adding at the end the following:
    - (ii) by adding at the end the following:
      - (6) Retaliation
        
        For purposes of this subsection, 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 a financial institution’s rights under this section.
  - in paragraph (1)(A) of subsection (c), as so redesignated—
    - (i) in clause (ii), by striking and inserting a semicolon;
    - (ii) in clause (iii), by striking and inserting a semicolon; and; 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 () is amended by inserting before each place that term appears. 12 U.S.C. 1785(j)

The Federal Financial Institutions Examination Council Act of 1978 (), as amended by sections 2 through 4 of this Act, is further amended— 12 U.S.C. 3301 et seq.

H.R. 940

Table of contents

SEC. 1. Short title

SEC. 2. Timeliness of examinations and examination reports

SEC. 3. Timeliness of required permission, regulatory, and reporting guidance

SEC. 4. Office of Independent Examination Review

SEC. 5. Right to independent review of material supervisory determinations

SEC. 6. Additional amendments