Sec. 402. Update of independent intra-agency appellate process for reviewing material supervisory determinations
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Not later than 180 days after the date of enactment of this Act, the Board of Governors of the Federal Reserve System, the Comptroller of the Currency, the Federal Deposit Insurance Corporation Board, and the National Credit Union Administration Board shall revise the independent intra-agency appellate process required under section 309(a) of the Riegle Community Development and Regulatory Improvement Act of 1994 ( 12 U.S.C. 4806(a) ). Section 309 of the Riegle Community Development and Regulatory Improvement Act of 1994 ( 12 U.S.C. 4806 ) is amended— by redesignating subsection
(f)as subsection (i); and by inserting after subsection
(e)the following: The Federal banking agencies and the National Credit Union Administration shall each establish an Office of Supervisory Appeals to carry out the independent intra-agency appellate process required under this section. The head of each of the Federal banking agencies and the National Credit Union Administration shall appoint appeals officials, in a number sufficient to fully staff the panels described under subsection (h), from among the following classes of individuals: Individuals who have financial institutions regulatory agency experience. Individuals who— are a licensed attorney or a certified public accountant authorized to practice under the laws of a State, the District of Columbia, or a territory of the United States; have either academic or private sector experience; have relevant subject matter knowledge or work-related experience in the financial services sector, as determined by the agency making the appointment; and are not, and were not during the previous 10-year period, employed by a Federal banking agency, a Federal reserve bank, or the National Credit Union Administration. Individuals— with at least 10 years private sector financial services senior management-level experience; and recommended by— an insured depository institution; an insured credit union; or a trade association for such institutions or credit unions. Each appeals official appointed under paragraph
(1)shall serve for a term of 3 years. No individual may be appointed under paragraph
(1)to serve more than 2 full terms. An appeals official appointed under paragraph
(1)may be removed at any time by the appointing agency. An institution seeking an appeal of a material supervisory determination shall— file a written appeal to the head of supervision for the agency not later than 30 days after receiving the material supervisory determination from the agency; and include in the appeal— a clear and complete statement of all relevant facts and issues; all arguments that the institution wishes to present; and all relevant and material documents that the institution wishes to be considered. The institution may file a written request with the head of supervision for an extension of the 30-day time period described under subparagraph (A)(i), which shall state good cause for granting the extension. Such request shall be granted in the sole discretion of the head of supervision. An institution seeking an appeal of a material supervisory determination may, not later than 7 days after receiving the material supervisory determination, request that the agency provide the institution with any information relied upon by the agency in making the material supervisory determination. The agency shall provide that information to the institution not later than 14 days after receiving the request. A head of supervision receiving an appeal under paragraph
(1)shall, after reviewing the information provided by the institution in such appeal— grant the appeal; refer the appeal to a panel appointed under paragraph
(3)for a recommendation; or deny the appeal. A head of supervision shall promptly inform the institution and the head of the agency after granting, referring, or denying an appeal under subparagraph (A). An institution that has an appeal denied by the head of supervision under subparagraph
(A)may appeal such denial directly to a panel appointed under paragraph (3). With respect to each appeal referred by a head of supervision under paragraph (2)(A)(ii) or appealed by an institution after a denial under paragraph (2)(A)(iii), the agency shall appoint a panel of 3 appeals officials to provide a recommendation on such appeal, with 1 of the 3 appeals officials being appointed to the panel from individuals in each of the classes described under subparagraphs (A), (B), and
(C)of subsection (g)(1). An appeals official may not be appointed to a panel under subparagraph
(A)if the appeals official is reporting, or has reported, directly or indirectly in the past 5 years, to the agency official who made the material supervisory determination under review. An institution may request a hearing with the panel on the institution’s appeal by— making such request not later than 7 days after the date on which the institution is informed that the head of supervision referred an appeal to a panel under paragraph (2); or including the request in the institution’s appeal of a denial under paragraph (2). If an institution requests a hearing, as described under subparagraph (A), the panel shall provide the institution with a hearing on the institution’s appeal not later than 30 days after the date the hearing is requested, except the panel may, in the discretion of the panel or upon good cause shown, extend such deadline by up to 15 days. The Federal banking agencies and the National Credit Union Administration shall each issue rules to establish procedures for panel hearings described under this paragraph, including that— the institution may appear at the hearing personally or through counsel; the institution may provide an oral and written presentation at the hearing; the panel may ask questions of any person participating in the hearing; the hearing may not involve— taking testimony; a cross-examination; and discovery; the hearing shall not be governed by formal rules of evidence; and the panel shall have a verbatim transcript of the hearing prepared. A panel making a recommendation on an appeal under this subsection shall make the recommendation not later than— 90 days after the date on which the appeal was referred by a head of supervision under paragraph (2)(A)(ii) or appealed by an institution after a denial under paragraph (2)(A); or if the institution requested a hearing under paragraph (4), 60 days after the date on which the hearing concluded. The panel may recommend— that the material supervisory determination be continued, terminated, or otherwise modified; or that the material supervisory determination be remanded to the examiners to allow the examiners to consider additional information presented in connection with the appeal. After a recommendation is made under subparagraph (A), the panel shall promptly notify the institution, the head of supervision of the agency, and the head of the agency of the recommendation, which shall contain a statement of the basis for the panel’s recommendation and identify the information on which the panel relied in reaching the recommendation. A copy of each panel recommendation shall be posted on the agency’s public website as soon as practicable, with exempt information redacted. If the panel determines that redaction is insufficient to prevent improper disclosure, the recommendation may be presented in summary form. A panel’s review of a material supervisory determination being appealed under this subsection shall be de novo. A panel shall have no authority to delay or stay the implementation of any formal order from the applicable agency. Not later than 15 days after receiving a notice of a recommendation under paragraph (5)(C), the institution may submit to the head of the agency written exceptions to the recommended decision. Not later than 45 days after receiving a notice of a recommendation under paragraph (5)(C), the head of an agency shall review such decision and either ratify or reject the panel’s decision. A review by the head of an agency under this paragraph may not be delegated to any other employee of the agency and, in the case of an agency that is headed by a body made up of multiple individuals, all such individuals shall participate in the review. The Federal banking agencies and the National Credit Union Administration shall each, not later than 90 days after the end of each calendar year, issue a report to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate describing the actions taken by the agency under this paragraph during such calendar year, including information on each of the panel decisions reviewed, after redacting any confidential supervisory information. A copy of each decision by the head of the agency under this paragraph shall be posted on the agency’s public website as soon as practicable, with any information identifying the appealing institution redacted. If the head of the agency determinates that redaction is insufficient to prevent improper disclosure, the decision may be presented in summary form. An institution shall have the right to petition for review of an agency head’s decision under paragraph
(6)by filing a petition for review not later than 60 days after the date on which the decision was made in the United States Court of Appeals for the District of Columbia Circuit or the circuit in which the institution is located. The Federal banking agencies and the National Credit Union Administration may not— retaliate against an insured depository institution or insured credit union, or a service provider or institution-affiliated party of an insured depository institution or insured credit union, for exercising rights under this subsection; or delay or deny any agency action that would benefit an insured depository institution or insured credit union, or a service provider or institution-affiliated party of an insured depository institution or insured credit union, on the basis that a matter under this section is pending under this section. With respect to the appeal of a material supervisory determination under this subsection: The term agency means the Federal agency, either a Federal banking agency or the National Credit Union Administration, that made the material supervisory determination. The term institution means the company, either an insured depository institution or an insured credit union, with respect to which the material supervisory determination was made. .
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Sec. 402
Update of independent intra-agency appellate process for reviewing material supervisory determinations
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