A group of Congressional members recently submitted a bill to be passed at the federal level, asking financial regulators to treat banks fairly during their examination process. The bill was introduced to address concerns from banks regarding the increase in regulatory compliance issues and the fairness of the examination process after the financial crisis.

Title, the "Financial Institutions Examination Fairness and Reform Act," the bill was referred to the House Committee on Financial Services in November. It requires federal financial institutions' regulatory agencies to provide timely final examination reports to banks, streamline the examination standards, and assign the rights for banks to appeal the regulators' decisions.

Chairman of the Sub-committee on Financial Institutions and Consumer Credit Shelley Moore Capito (R-W VA.) and ranking member Carolyn Maloney (D-NY) led a group of eight other U.S. representatives in introducing the bill.

“We have heard significant concerns about the fairness of the examination process for financial institutions and their ability to effectively appeal regulator decisions. This legislation provides financial institutions with a fair and impartial process to appeal examination reports for federal financial regulators and provides further clarity to regulators,” said Capito in a statement.

Meanwhile, Maloney said, “I have heard from banks in my district who feel that there is a disconnect between guidance coming out of Washington and exams that are being done in the field.” By introducing the bill, it will codify existing guidance, help ensure that the examination process is being conducted consistently, and offer banks an independent outlet when they feel wrong determinations have been made.

Some of the changes outlined in the bill include:

A 60-day timeline for agencies to release a final examination report

A mandate that agencies provide banks with examination materials used when requested

Synchronization of the examination standards for loans evaluations

Establishment of an Office of Examination Ombudsman

The right to appeal to an independent administrative law judge and a provision to protect banks from retaliation actions