The U.S. House of Representatives advanced a bill that would create a new entity to handle the federal financial examination appeals process for community banks.
The Financial Institutions Examination Fairness and Reform Act of 2017 (H.R. 4545), introduced by Rep. Scott Tipton’s (R-CO), would create the Office of Independent Examination Review under the Federal Financial Institutions Examination Council FFIEC — the umbrella organization of the financial regulators.
Community banks and credit unions are examined regularly by one of four separate financial regulators. An unfavorable decision in the examination can lead to more examinations or prevent them from providing certain services or products.
Currently, to appeal these decisions made in the examinations, financial institutions appeal to the regulator that did the examination. With this bill, the appeal would be directed to the new Office of Independent Examination Review. This office, said Tipton, would provide uniformity to the appeals process and its standards, and increase timeliness and transparency.
“The current examination appeals system has created an environment of uncertainty for financial institutions, and community banks and credit unions can’t be sure they have received a fair shake in their appeal process from their regulator,” Tipton said.
The bill advanced 283-133 in the House and now moves to the Senate floor for further consideration.
“Reassigning the examination appeals process to an independent office would bring uniformity to the process and ensure community banks receive fair treatment and are able to continue serving their communities. I thank my colleagues in the House for advancing this important bipartisan legislation and I look forward to its passage in the Senate,” Tipton said.