December 14, 2023

Manchin, Moran Reintroduce Bipartisan Legislation to Protect Community Banks from Regulatory Overreach

Washington, DC – Today, U.S. Senators Joe Manchin (D-WV) and Jerry Moran (R-KS) reintroduced their bipartisan Fair Audits and Inspections for Regulators’ (FAIR) Exams Act. The legislation would help ensure a fair and effective supervisory examination process for banks by establishing an appeals process to resolve disagreements between banks and regulators.

“An effective and fair examination process for financial institutions is vital to the health of our banking system and beneficial for consumers, especially in rural states like West Virginia,” said Senator Manchin. “I’m proud to reintroduce the bipartisan FAIR Exams Act, which would ensure any bank or financial institution that undergoes a supervisory exam has an impartial third party that reviews these exam findings before regulatory agencies can take action against them. I encourage my colleagues on both sides of the aisle to support this commonsense bill to strengthen transparency in our financial institutions and increase accountability on agencies.”

“The bank examination process should be free from bias and fair to bankers,” said Senator Moran. “This legislation will help bring much-needed transparency to the examination process to make certain all banks – particularly rural, community banks – are treated fairly and afforded due process through a rigorous appeals process.”

The FAIR Exams Act would:

  • Require the appropriate regulatory agencies to issue timely responses to bankers during the examination process;
  • Require the Federal Financial Institutions Examinations Council (FFIEC) to make available upon request the information relied upon for determinations;
  • Create an Independent Examination Review Director within the FFIEC to address examination complaints and procedures;
  • Provide financial institutions with the right to seek review of supervisory determinations with the Independent Examination Review Director; and
  • Authorize the director to review the examination record and, at the institution’s request, refer the appeal to an administrative law judge.
    • The director’s decision shall be binding on the agency and the institution asking for the review.
    • Like other final agency actions, the director’s determination will be appealable to the Federal Court of Appeals for review under well-established principles of judicial review of agency action.

The legislation was cosponsored by Senators Thom Tillis (R-NC) and Bill Hagerty (R-TN).