In-Depth: Sponsoring Rep Scott Tipton (R-CO) introduced this bill to consolidate the appeals process for financial regulatory examinations under an independent office, rather than each agency having its own appeals process:
“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. 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.”
Original cosponsor, Rep. Carolyn Maloney (D-NY), added:
“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.”
Some House Democrats opposed this bill in committee, writing:
“H.R. 4545 would enable any bank, regardless of size, to appeal and postpone material supervisory determinations by the bank’s regulator, which include adverse determinations such as a downgrade of a bank’s rating for capital, asset quality, management, earnings, liquidity, and sensitivity to market risks (CAMELS); significant deficiencies in the institution’s Bank Secrecy Act/Anti-Money Laundering (BSA/AML) program; findings related to violations of various regulations; or a downgrade of a bank’s Community Reinvestment Act (CRA) rating… This bill would make it more likely that megabanks would be able to escape or delay accountability for egregious violations of federal laws protecting consumers and the economy.”
This legislation passed the House Financial Services Committee on a 50-10 vote and has the support of seven bipartisan cosponsors, including five Republicans and two Democrats.
Summary by Eric Revell(Photo Credit: ultramarine5 / iStock)