WASHINGTON (3/8/12)--Legislation intended to strengthen the safety and soundness of the financial system by increasing the consistency and fairness of financial institution examinations has been introduced in the Senate.
Bill co-sponsors Sen. Jerry Moran (R-Kan.) and Sen. Joe Manchin (D-W. Va.) in a release said the legislation would establish a "more transparent approach" to financial institution examinations and allow for a "more robust appeals process for times when there is a legitimate disagreement" between a regulator and the regulated.
The bill would establish a new inter-agency ombudsman to investigate complaints about examinations and look at examination quality assurance, require regulators to provide clear and consistent loan treatment guidelines, and prevent regulators from retaliating against institutions that challenge their determinations.
The legislation is similar to the Financial Institutions Examination Fairness and Reform Act (H.R. 3461), which was introduced in the House last November.
The Credit Union National Association (CUNA) supports examination fairness legislation and said of the House bill, "It is a firm step in the right direction toward ensuring the federal financial institution regulatory agencies conduct fair exams, which are consistent with the law and regulation and ensure safety and soundness."
H.R. 3461, which is co-sponsored by House Financial Services subcommittee on financial institutions chair Rep. Shelly Moore Capito (R-W.Va.) and ranking member Rep. Carolyn Maloney (D-N.Y.), has 107 cosponsors.