WASHINGTON—Legislation that has bipartisan support that seeks to promote examination fairness is a strong step in the right direction, America’s Credit Unions wrote to Reps. French Hill (R-AK) and David Scott (D-GA).
The two reps recently introduced the Fair Audits and Inspections for Regulators’ (FAIR) Exams Act (H.R. 8071).
“Your legislation will facilitate transparency and improve consistency in the examination process; provide a resource for financial institutions to express concern about their examination experience; and establish an independent adjudicatory process for the appeal of material supervisory determinations,” wrote ACU President and CEO Jim Nussle. “We strongly support this legislation and look forward to working with you to ensure its timely enactment.”
The Specifics
Specifically, the bill would:
- Authorize financial institutions to seek a prompt, independent review of a “Material Supervisory Determination” (MSDs) from a regulatory examination – and can further be appealed to the U.S. Court of Appeals
- Require federal financial regulators to conduct and complete examinations in a timely fashion and provide a final exam report no later than 60 days after the exit interview or the provision of additional exam material
- Require the regulator to share with financial institutions the materials relied on in making the MSD after the exam exit interview
- Create a new Office of Independent Examination Review to adjudicate MSD appeals to be led by an FFIEC-appointed independent director who would report annually to Congress on the actions taken under this bill
- Prohibit federal financial regulators from retaliating against financial institutions for exercising their appellate rights under this bill.
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