Financial Services Committee Debates Rothfus Bill to Reform Bank and Credit Union Examinations
Washington, D.C. – This week, the House Financial Services Committee held a legislative hearing to discuss Congressman Keith Rothfus’ [PA-12] bill and other bills designed to provide regulatory relief for community banks and credit unions.
“Small business owners in communities across this country rely on their neighborhood banks and credit unions to get the funds they need to grow, invest, and build,” said Congressman Rothfus. “Unfortunately, regulatory pressure from examiners sometimes forces community financial institutions to turn down viable business or take other actions that conflict with the judgement of local bankers and credit union officials. The current process for appealing these examination determinations is slow, opaque, and far from independent.”
“This legislation takes steps to bring fairness to an examination that is not always transparent and an appeals process that, for credit unions, has never been balanced,” said Rick Nichols, President and CEO of the River Region Credit Union.
“H.R. 924 … would go a long way toward improving the examination environment by creating a workable appeals process,” said Robert Fisher, President and CEO of Tioga State Bank. “The current system, which grants examiners almost unfettered and unassailable authority, begs for checks and balances.”
- Establishes a three-judge independent examination review panel to mediate examination findings, compel timely completion of financial examination reports, and compel timely completion of written determinations for permission, regulatory interpretation, or reporting guidance;
- Requires agencies that regulation financial institution to provide a final examination report to the institution within 60 days of the later of the exit interview or the institution’s provision of additional materials relating to the examination, and requires that the exit interview take place within 9 months of the examination commencing except on written notice by the agency;
- Permits financial institutions to seek advance permission to undertake an action, an interpretation of the law or regulation, or interpretation of generally accepted principles, objectives, or standards, and requires agencies to make a determination within 120 days of receiving the request; and
- Entitles financial institutions to appeal a final agency material supervisory determination.