HR940-119

What This Bill Does

The FAIR Exams Act amends the Federal Financial Institutions Examination Council framework to make bank and credit-union examinations more time-limited and appealable. In the reported version, federal financial institution regulatory agencies must complete examinations within 270 days unless they give written reasons for more time. Agencies must conduct exit interviews within 30 days after completing an exam and provide final examination reports within 90 days after the later of the exit interview or the institution's additional material information. At the institution's request, the final report must include an appendix listing examination or factual information used to support a material supervisory determination.

The bill also creates a written-determination process for institutions seeking agency non-objection, legal or regulatory interpretation, or accounting guidance. Agencies must acknowledge requests within 30 days, identify missing information, decide within 60 days after the request or cure period, and publish anonymized determination summaries within 120 days. It establishes an Office of Independent Examination Review inside FFIEC, headed by a three-member presidentially appointed, Senate-confirmed Board with financial regulatory, consumer-compliance, and private-sector banking experience. The Office can receive complaints, meet with institutions, review exam procedures, run quality assurance, decide supervisory appeals, protect confidential supervisory information, and report annually.

Financial institutions get a statutory right to independent review of material supervisory determinations. They may file within 60 days, request relied-upon examination information within 7 days, receive that information within 14 days, elect a hearing, obtain testimony and evidence under Board procedures, and receive de novo review without deference to examiners. Board decisions bind the agency and institution and are reviewable in federal court. Agencies may not retaliate or delay beneficial actions because of an appeal, though they may still enforce determinations when needed for safety and soundness. The bill also revises the Riegle appeals process, adds anti-retaliation safeguards, includes matters requiring attention and expedited-processing status removals as reviewable issues, and includes CFPB for sections 1012 through 1015.

Who Benefits and How

Community banks benefit from deadlines for exams, reports, exit interviews, and guidance decisions. Credit unions benefit from independent review rights and anti-retaliation protections when challenging material supervisory determinations. Bank senior managers benefit from access to the factual basis for exam findings. Financial institution counsel benefit from clearer appeal procedures, hearing rights, and court-review paths. Trade associations benefit because the Office must meet with institutions across the country and review examination practices. Institutions seeking new activities benefit from a timed written-determination process.

Who Bears the Burden and How

Federal banking agencies must meet exam deadlines, provide written extensions, publish redacted guidance summaries, supply relied-upon exam facts, and participate in de novo appeals. FFIEC must host and fund the Office of Independent Examination Review. OCC, Federal Reserve, FDIC, NCUA, and CFPB staff must pay cost shares and adapt examination practices. The new Board must handle complaints, hearings, quality assurance, confidentiality, and annual reports. Examiners face review of material supervisory determinations and retaliation safeguards. Agency legal teams must defend Board decisions and preserve enforcement authority for safety and soundness.

Key Provisions

• Requires federal financial institution regulatory agencies to complete exams within 270 days unless written reasons justify more time.
• Requires exit interviews within 30 days and final examination reports within 90 days.
• Creates a written-determination process with 30-day acknowledgment, 60-day decisions, and 120-day public summaries.
• Establishes an FFIEC Office and Board of Independent Examination Review.
• Provides de novo independent review of material supervisory determinations with hearing rights and court review.
• Prohibits agency retaliation for appeals and expands reviewable issues to matters requiring attention and expedited-processing removals.
• Includes CFPB in the examination timeliness and appeal framework.