115th CONGRESS 1st Session |
To amend the Federal Financial Institutions Examination Council Act of 1978 to establish a three-judge independent examination review panel.
February 7, 2017
Mr. Rothfus introduced the following bill; which was referred to the Committee on Financial Services
To amend the Federal Financial Institutions Examination Council Act of 1978 to establish a three-judge independent examination review panel.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
This Act may be cited as the “Financial Institutions Due Process Act of 2017”.
SEC. 2. Timeliness of examination reports.
The Federal Financial Institutions Examination Council Act of 1978 (12 U.S.C. 3301 et seq.) is amended by adding at the end the following:
“SEC. 1012. Timeliness of examination reports.
“(1) FINAL EXAMINATION REPORT.—A Federal financial institutions regulatory agency shall provide a final examination report to a financial institution not later than 60 days after the later of—
“(A) the exit interview for an examination of the institution; or
“(B) the provision of additional information by the institution relating to the examination.
“(2) EXIT INTERVIEW.—With respect to an examination of a financial institution by a Federal financial institutions regulatory agency, if the financial institution is not subject to a resident examiner program, the exit interview for such examination shall occur not later than the end of the 9-month period beginning on the commencement of the examination, except that such period may be extended by the Federal financial institutions regulatory agency by providing written notice to the financial institution describing with particularity the reasons that a longer period is needed.
“(b) Examination materials.—Upon the request of a financial institution, the Federal financial institutions regulatory agency shall include with a final examination report an appendix listing all examination or other factual information relied upon by the agency in support of a material supervisory determination.”.
SEC. 3. Independent Examination Review Panel.
(a) In general.—The Federal Financial Institutions Examination Council Act of 1978 (12 U.S.C. 3301 et seq.), as amended by section 2, is further amended by adding at the end the following new section:
“SEC. 1013. Independent Examination Review Panel.
“(1) ESTABLISHMENT.—There is established in the executive branch the Independent Examination Review Panel (in this section referred to as the ‘Panel’).
“(2) JUDGES.—The Panel shall consist of three judges, appointed as follows:
“(A) One judge appointed by the Council with extensive financial institutions regulatory agency experience.
“(B) One judge appointed by the Securities and Exchange Commission with legal and public accounting experience.
“(C) One judge appointed by the Council, selected from candidates with private sector senior management-level experience with legal or public accounting background and recommended to the Council by a financial institution or a financial institution trade association.
“(A) IN GENERAL.—Each judge appointed to the Panel shall serve for a term of 3 years, except as provided in subparagraph (B). No judge may be appointed to serve more than 2 terms.
“(B) TERMS OF INITIAL APPOINTEES.—Of the judges first appointed to the Panel—
“(i) the judge appointed pursuant to paragraph (2)(A) shall be appointed for a term of 1 year;
“(ii) the judge appointed pursuant to paragraph (2)(B) shall be appointed for a term of 2 years; and
“(iii) the judge appointed pursuant to paragraph (2)(C) shall be appointed for a term of 3 years.
“(4) REQUIREMENTS FOR APPOINTMENT.—An individual appointed under subparagraph (B) or (C) of paragraph (2) shall—
“(A) be a licensed attorney and a certified public accountant authorized to practice under the laws of a State, the District of Columbia, the Commonwealth of Puerto Rico, or any other territory or possession of the United States; and
“(B) have relevant subject matter education and work-related experience, including working knowledge of generally accepted accounting principles, as determined by the entity making the appointment.
“(b) Jurisdiction.—The Panel shall have exclusive jurisdiction of an appeal of a final material supervisory determination of a Federal financial institutions regulatory agency. The Panel shall determine the merits of the appeal, after an opportunity for a hearing on the record.
“(c) Standard of review.—In an appeal heard by the Panel under this section, the Panel may not defer to the opinions of an examiner or a Federal financial institutions regulatory agency, but shall independently determine the appropriateness of the Federal financial institutions regulatory agency’s decision based upon the relevant statutes, regulations, judicial precedents, and previous decisions of the Panel.
“(1) IN GENERAL.—A financial institution seeking an appeal under this section shall file a written notice with the Panel within 30 days after receiving the final material supervisory determination from the agency, or within 270 days after receiving the final examination report, whichever occurs first.
“(2) CONTENTS OF NOTICE.—The written notice shall identify the final material supervisory determination that is the subject of the appeal and a statement of the reasons why the financial institution believes such determination should be modified.
“(e) Information To be provided to institution prior to hearing before the Panel.—Any information relied upon by a Federal financial institutions regulatory agency in a final examination report that is not in the possession of a financial institution requesting an appeal under this section may be requested by the financial institution and, if requested, shall be delivered promptly by the agency to the financial institution.
“(f) Hearing.—If a financial institution requests a hearing before the Panel in connection with an appeal by the financial institution under this section, the hearing shall—
“(1) take place not later than 60 days after the date on which the notice of the appeal was received by the Panel; and
“(2) be conducted pursuant to the procedures set forth under sections 556 and 557 of title 5, United States Code.
“(g) Decision.—A decision by the Panel on an appeal under this section shall be made not later than—
“(1) 60 days after the date on which the notice of appeal is filed with the Panel; or
“(2) 30 days after the date on which a hearing under subsection (f) has concluded, if a hearing is requested by the financial institution.
“(h) Right to judicial review.—A financial institution and the Federal financial institution regulatory agency that made the material supervisory determination appealed under this section shall have the right to petition for review of the decision of the Panel under this section by filing a petition for review not later than 60 days after the date on which the decision was made in the United States Court of Appeals for the District of Columbia Circuit or the circuit in which the financial institution is located.
“(i) Reports and publication.—
“(1) REPORTS.—The Panel shall, within 90 days of the end of each calendar year, report final decisions made under subsection (g) during such calendar year to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives. Such reports may not contain confidential or privileged information shared by financial institutions.
“(2) PUBLICATION.—Any report submitted under paragraph (1) shall be made available on the Council’s website in such a manner that such reports may serve as precedent for future disputes.
“(1) IN GENERAL.—The reasonable costs and expenses incurred by the Panel shall be paid by the Council.
“(2) SALARIES.—Compensation for the judges appointed to the Panel under this section shall be determined by the Council and based upon the fair market value of the level of service and time provided considering the training, knowledge, and experience needed to properly and professionally carry out the duties required.
“(k) Retaliation prohibited.—A Federal financial institutions regulatory agency may not—
“(1) retaliate against a financial institution, including service providers, or any institution-affiliated party, for exercising appellate rights under this section; or
“(2) delay or deny any agency action that would benefit a financial institution or any institution-affiliated party on the basis that an appeal under this section is pending under this section.”.
(b) Definition.—Section 1003 of the Federal Financial Institutions Examination Council Act of 1978 (12 U.S.C. 3302) is amended—
(1) in paragraph (2), by striking “and”;
(2) in paragraph (3), by adding “and” at the end; and
(3) by adding at the end the following new paragraph:
“(4) the term ‘material supervisory determinations’ has the meaning given such term in section 309(f) of the Riegle Community Development and Regulatory Improvement Act of 1994 (12 U.S.C. 4806(f)).”.
SEC. 4. Timeliness of required permission, regulatory, and reporting guidance.
The Federal Financial Institutions Examination Council Act of 1978 (12 U.S.C. 3301 et seq.), as amended by section 3, is further amended by adding at the end the following new section:
“SEC. 1014. Timeliness of required permission, regulatory, and reporting guidance.
“(a) Request for permission or guidance.—A financial institution may request a written determination by a Federal financial institutions regulatory agency of—
“(1) the agency’s permission to take an action where permission is mandated by regulation;
“(2) the agency’s interpretation of a law or regulation; and
“(3) the agency’s interpretation of generally accepted accounting principals or accounting objectives, standards, and requirements under section 37 of the Federal Deposit Insurance Act.
“(b) Contents of request.—A request made under subsection (a) shall be in writing and contain all the information needed to communicate to the Federal financial institutions regulatory agency the following:
“(1) The nature of the request.
“(2) Applicable facts relating to the matter.
“(3) Applicable law, regulation, or generally accepted accounting principals relating to the matter.
“(4) Discussion relative to the nature of the request summarizing the financial institution’s position or summary of the request.
“(c) Response to request.—A Federal financial institutions regulatory agency receiving a request under subsection (a) shall—
“(1) within 60 days of receiving the request—
“(A) provide the financial institution making the request with written notification that the agency received the request and stating whether the request contains the information required under subsection (b); and
“(B) if the request does not contain the information required under subsection (b), provide the financial institution with an explanation of what information is missing; and
“(2) within 120 days of receiving the request, if the request contains the information required under subsection (b), make a determination on the request and provide the financial institution with a written notice of such determination.
“(d) Appeal.—For purposes of section 1013(b), the following actions are deemed a final agency material supervisory determination:
“(1) Any determination made under subsection (c)(2).
“(2) Any failure by a Federal financial institutions regulatory agency to comply with a deadline require by this section.
“(3) Any determination by a Federal financial institutions regulatory agency under subsection (c)(1)(B) that a request does not contain the information required under subsection (b).
“(e) Reports and publication.—Each Federal financial institutions regulatory agency shall, within 120 days after making a determination under subsection (c)(2), publish a summary of the determination, in order to offer guidance to the applicable industry. The summary may not contain confidential or privileged information about the financial institution, financial institution clients, or agency personnel.”.