"Exam Fairness" Legislation Introduced in the House

Nov. 29, 2011 - H.R. 3461, the Financial Institutions Examination Fairness and Reform Act, was introduced by Rep. Shelley Moore Capito (R-WV) and Rep. Carolyn Maloney (D-NY) in an effort to improve elements of the federal examination process.

The bill would require the federal financial institution agency to provide the final exam report to the financial institution not later than 60 days after either the exit interview unless another agreement is reached. It would also allow the financial institution to request the information used during the exam that resulted in a material supervisory determination.

H.R. 3461 would direct the Federal Financial Federal Financial Institutions Examination Council (FFIEC) to establish an Office of Examination Ombudsman to receive and investigate complaints concerning exams, exam practices or reports. The Ombudsman would hold periodic meetings, review exam procedures for adherence to FFIEC standards and report to Congress on its findings. The bill would also establish financial institutions' right to appeal to an administrative law judge.

Further, the legislation requires federal agencies to establish and apply identical definitions and reporting requirements for non-accrual loans. NASCUS is reviewing the legislation to understand its impact on state regulators and state-chartered credit unions. To view the bill, click here.