FAIR Exams Act

Summary#

This bill changes the Federal Financial Institutions Examination Council Act of 1978. It requires federal financial regulators to deliver a final examination report to a financial institution within 60 days after the exit interview or after the institution provides additional material information. For institutions without a resident examiner, the exit interview must occur no later than nine months after the start of the exam unless the agency gives written notice explaining a needed extension. The bill also requires that, on request, agencies include an appendix listing examination or factual information used to support material supervisory determinations.

The bill creates an Office of Independent Examination Review led by an Independent Examination Review Director appointed by the President with Senate confirmation. The Director may hire staff, investigate complaints, run quality-assurance reviews of examination procedures, hold regular meetings with institutions, and carry out independent reviews of supervisory appeals. Financial institutions may obtain an independent review of material supervisory determinations, can request hearings, and may petition for judicial review in the U.S. Court of Appeals. The bill also includes confidentiality protections and prohibits agencies from retaliating against institutions for using the appeal process. The Bureau of Consumer Financial Protection is included among agencies covered by these new sections. The Council will assess agencies to pay a share of the Office's costs.

What it means for you#

• If you run or represent a financial institution, you would get a deadline for receiving final exam reports (usually within 60 days after the exit interview or submission of material information).
• You could request an appendix of the examination materials relied on for any material supervisory finding.
• You would have a formal right to an independent review of material supervisory determinations, including the option of a hearing before an administrative law judge, and a path to appeal to Federal court.
• The Director must issue a final recommendation and agency heads must act on that recommendation within set time frames and give deference to the Director's recommendation.
• The bill includes confidentiality protections for communications with the Office and prohibits agency retaliation for using the review process.

Expenses#

The bill creates a new Office and Director position and allows the Director to hire staff. The Council will levy annual assessments on the Federal financial institutions regulatory agencies to cover a fixed share of the Office's costs; the text sets that share at one-fourth of costs for each agency and allows additional assessments during the year if needed. No publicly available information on total or specific dollar costs is provided in the bill text.

Proponents' View#

No publicly available information.

Opponents' View#

No publicly available information.