Tipton Legislation to Increase Transparency, Timeliness for Community Banks in Examination Appeals Process Passes House
WASHINGTON D.C. – The House of Representatives passed Congressman Scott Tipton’s (CO-03) legislation to create a fair federal financial examination appeals process for community banks. The bill, the Financial Institutions Examination Fairness and Reform Act of 2017 (H.R. 4545), passed the House with a bipartisan vote of 283-133.
Community banks and credit unions receive regular examinations from at least one of four separate financial regulators. An unfavorable decision reached during an examination can lead to more examinations for financial institutions or prevent them from providing necessary financial services products to their communities. The current process for appealing exam decisions handed down by regulators does not provide meaningful and timely recourse for community banks and credit unions and has led to concerns about standards of practice, access to information, and application of the law.
H.R. 4545 would resolve these problems by moving the federal financial examination appeals process away from the regulator that handed down the decision and reassigning it to the newly created Office of Independent Examination Review under the FFIEC, which is the umbrella organization of the financial regulators. The Office of Independent Examination Review would provide uniformity to the appeals process and its standards, as well as implement timeliness expectations in decisions about appeals and increase transparency in the process.
“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,” said Tipton. “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.”
There are currently over 120 community banks that serve Coloradans.
Watch Congressman Tipton speak on the bill on the House Floor here.
# # #