Tipton and Maloney Legislation Ensuring Fair Treatment during Examination Appeals Process Passes Out of Committee

Dec 14, 2017
Press Release

WASHINGTON D.C. – Representatives Scott Tipton (R-CO) and Carolyn B. Maloney’s (D-NY) Financial Institutions Examination Fairness and Reform Act of 2017 (H.R. 4545) has been approved by the full Financial Services Committee with a bipartisan vote of 50-10, and will now move to the House Floor for consideration. 

Currently, federal financial regulators each have their own appeals review processes, each with their own rules and their own stipulations about what regulatory decisions can be appealed, causing supervised financial institutions to grow concerned about the timeliness, transparency, standards of practice, and application of the law in these appeals.

H.R. 4545 would resolve these problems by moving the federal financial examination appeals process away from the regulator and reassigning it to the newly created Office of Independent Examination Review under the Federal Financial Institutions Examination Council (FFIEC). The Office of Independent Examination Review would provide uniformity to the appeal process and its standards, implement timeliness expectations in decisions about appeals, and increase transparency in the process.

Additionally, H.R. 4545 would not prevent federal financial regulators from handing down or enforcing supervisory determinations, and prevents frivolous appeals by financial institutions through rigorous qualifications for what kinds of supervisory decisions can be appealed.

“Bringing the examination appeals process under an independent office provides financial institutions with greater certainty that they will receive fair and standard treatment in the appeals process,” said Tipton. “I’m pleased to work with my colleague Representative Maloney to advance this bipartisan legislation to ensure financial institutions including small banks undergo an effective and fair examination process.”

Maloney said, “In the aftermath of the financial crisis, I heard from countless community banks that they were afraid to appeal exam decisions, because they thought their examiner would retaliate against them. That’s why I’m proud to have worked with Congressman Tipton to introduce this bill that would improve the examination process. This bill ensures that banks are treated fairly by their examiners, and creates a rigorous and independent process for banks to appeal certain exam decisions, which will bring transparency and consistency to the examination process. This improvement will protect the integrity of the banking system, while also improving the fairness of the examination process.”

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