[Congressional Record Volume 164, Number 46 (Thursday, March 15, 2018)]
[House]
[Pages H1624-H1634]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




       FINANCIAL INSTITUTIONS EXAMINATION FAIRNESS AND REFORM ACT

  Mr. HENSARLING. Madam Speaker, pursuant to House Resolution 773, I 
call up the bill (H.R. 4545) to amend the Federal Financial 
Institutions Examination Council Act of 1978 to improve the examination 
of depository institutions, and for other purposes, and ask for its 
immediate consideration in the House.
  The Clerk read the title of the bill.
  The SPEAKER pro tempore. Pursuant to House Resolution 773, an 
amendment printed in part A of House Report 115-595 is adopted, and the 
bill, as amended, is considered read.
  The text of the bill, as amended, is as follows:

                               H.R. 4545

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Financial Institutions 
     Examination Fairness and Reform Act''.

     SEC. 2. AMENDMENT TO DEFINITION OF FINANCIAL INSTITUTION.

       Section 1003(3) of the Federal Financial Institutions 
     Examination Council Act of 1978 (12 U.S.C. 3302(3)) is 
     amended to read as follows:
       ``(3) the term `financial institution'--
       ``(A) means a commercial bank, a savings bank, a trust 
     company, a savings association, a building and loan 
     association, a homestead association, a cooperative bank, or 
     a credit union; and
       ``(B) for purposes of sections 1012, 1013, and 1014, 
     includes a nondepository covered person subject to 
     supervision by the Bureau of Consumer Financial Protection 
     under section 1024 of the Consumer Financial Protection Act 
     of 2010 (12 U.S.C. 5514).''.

     SEC. 3. TIMELINESS OF EXAMINATION REPORTS.

       The Federal Financial Institutions Examination Council Act 
     of 1978 (12 U.S.C. 3301 et seq.) is amended by adding at the 
     end the following:

     ``SEC. 1012. TIMELINESS OF EXAMINATION REPORTS.

       ``(a) In General.--
       ``(1) Final examination report.--A Federal financial 
     institutions regulatory agency shall provide a final 
     examination report to a financial institution not later than 
     60 days after the later of--
       ``(A) the exit interview for an examination of the 
     institution; or
       ``(B) the provision of additional information by the 
     institution relating to the examination.
       ``(2) Exit interview.--If a financial institution is not 
     subject to a resident examiner program, the exit interview 
     shall occur not later than the end of the 9-month period 
     beginning on the commencement of the examination, except that 
     such period may be extended by the Federal financial 
     institutions regulatory agency by providing written notice to 
     the institution and the Independent Examination Review 
     Director describing with particularity the reasons that a 
     longer period is needed to complete the examination.
       ``(b) Examination Materials.--Upon the request of a 
     financial institution, the Federal financial institutions 
     regulatory agency shall include with the final report an 
     appendix listing all examination or other factual information 
     relied upon by the agency in support of a material 
     supervisory determination.''.

     SEC. 4. INDEPENDENT EXAMINATION REVIEW DIRECTOR.

       The Federal Financial Institutions Examination Council Act 
     of 1978 (12 U.S.C. 3301 et seq.), as amended by section 3, is 
     further amended by adding at the end the following:

     ``SEC. 1013. OFFICE OF INDEPENDENT EXAMINATION REVIEW.

       ``(a) Establishment.--There is established in the Council 
     an Office of Independent Examination Review (the `Office').
       ``(b) Head of Office.--There is established the position of 
     the Independent Examination Review Director (the `Director'), 
     as the head of the Office. The Director shall be appointed by 
     the Council and shall be independent from any member agency 
     of the Council.
       ``(c) Term.--The Director shall serve for a term of 5 
     years, and may be appointed to serve a subsequent 5-year 
     term.
       ``(d) Staffing.--The Director is authorized to hire staff 
     to support the activities of the Office.
       ``(e) Duties.--The Director shall--
       ``(1) receive and, at the Director's discretion, 
     investigate complaints from financial institutions, their 
     representatives, or another entity acting on behalf of such 
     institutions, concerning examinations, examination practices, 
     or examination reports;
       ``(2) hold meetings, at least once every three months and 
     in locations designed to encourage participation from all 
     sections of the United States, with financial institutions, 
     their representatives, or another entity acting on behalf of 
     such institutions, to discuss examination procedures, 
     examination practices, or examination policies;
       ``(3) in accordance with subsection (f), review examination 
     procedures of the Federal financial institutions regulatory 
     agencies to ensure that the written examination policies of 
     those agencies are being followed in practice and adhere to 
     the standards for consistency established by the Council;
       ``(4) conduct a continuing and regular review of 
     examination quality assurance for all examination types 
     conducted by the Federal financial institutions regulatory 
     agencies;
       ``(5) adjudicate any supervisory appeal initiated under 
     section 1014; and
       ``(6) report annually to the Committee on Financial 
     Services of the House of Representatives, the Committee on 
     Banking, Housing, and Urban Affairs of the Senate, and the 
     Council, on the reviews carried out pursuant to paragraphs 
     (3) and (4), including compliance with the requirements set 
     forth in section 1012 regarding timeliness of examination 
     reports, and the Council's recommendations for improvements 
     in examination procedures, practices, and policies.
       ``(f) Standard for Reviewing Examination Procedures.--In 
     conducting reviews pursuant to subsection (e)(4), the 
     Director shall prioritize factors relating to the safety and 
     soundness of the financial system of the United States.
       ``(g) Removal.--If the Director is removed from office, the 
     Council shall communicate in writing the reasons for any such 
     removal to the Committee on Financial Services of

[[Page H1625]]

     the House of Representatives and the Committee on Banking, 
     Housing, and Urban Affairs of the Senate not later than 30 
     days before the removal.
       ``(h) Confidentiality.--The Director shall keep 
     confidential all meetings with, discussions with, and 
     information provided by financial institutions.''.

     SEC. 5. RIGHT TO INDEPENDENT REVIEW OF MATERIAL SUPERVISORY 
                   DETERMINATIONS.

       The Federal Financial Institutions Examination Council Act 
     of 1978 (12 U.S.C. 3301 et seq.), as amended by section 4, is 
     further amended by adding at the end the following:

     ``SEC. 1014. RIGHT TO INDEPENDENT REVIEW OF MATERIAL 
                   SUPERVISORY DETERMINATIONS.

       ``(a) In General.--A financial institution shall have the 
     right to obtain an independent review of a material 
     supervisory determination contained in a final report of 
     examination.
       ``(b) Notice.--
       ``(1) Timing.--A financial institution seeking review of a 
     material supervisory determination under this section shall 
     file a written notice with the Independent Examination Review 
     Director (the `Director') within 60 days after receiving the 
     final report of examination that is the subject of such 
     review.
       ``(2) Identification of determination.--The written notice 
     shall identify the material supervisory determination that is 
     the subject of the independent examination review, and a 
     statement of the reasons why the institution believes that 
     the determination is incorrect or should otherwise be 
     modified.
       ``(3) Information to be provided to institution.--Any 
     information relied upon by the agency in the final report 
     that is not in the possession of the financial institution 
     may be requested by the financial institution and shall be 
     delivered promptly by the agency to the financial 
     institution.
       ``(c) Right to Hearing.--
       ``(1) In general.--The Director shall determine the merits 
     of the appeal on the record or, at the financial 
     institution's election, shall refer the appeal to an 
     Administrative Law Judge to conduct a confidential hearing 
     pursuant to the procedures set forth under sections 556 and 
     557 of title 5, United States Code, which hearing shall take 
     place not later than 60 days after the petition for review 
     was received by the Director, and to issue a proposed 
     decision to the Director based upon the record established at 
     such hearing.
       ``(2) Standard of review.--In rendering a determination or 
     recommendation under this subsection, neither the 
     Administrative Law Judge nor the Director shall defer to the 
     opinions of the examiner or agency, but shall conduct a de 
     novo review to independently determine the appropriateness of 
     the agency's decision based upon the relevant statutes, 
     regulations, and other appropriate guidance, as well as 
     evidence adduced at any hearing.
       ``(d) Final Decision.--A decision by the Director on an 
     independent review under this section shall--
       ``(1) be made not later than 60 days after the record has 
     been closed; and
       ``(2) subject to subsection (e), be deemed a final agency 
     action and shall bind the agency whose supervisory 
     determination was the subject of the review and the financial 
     institution requesting the review.
       ``(e) Limited Review by FFIEC.--
       ``(1) In general.--If the agency whose supervisory 
     determination was the subject of the review believes that the 
     Director's decision under subsection (d) would pose an 
     imminent threat to the safety and soundness of the financial 
     institution, such agency may file a written notice seeking 
     review of the Director's decision with the Council within 10 
     days of receiving the Director's decision.
       ``(2) Standard of review.--In making a determination under 
     this subsection, the Council shall conduct a review to 
     determine whether there is substantial evidence that the 
     Director's decision would pose an imminent threat to the 
     safety and soundness of the financial institution.
       ``(3) Final determination.--A determination by the Council 
     shall--
       ``(A) be made not later than 30 days after the filing of 
     the notice pursuant to paragraph (1); and
       ``(B) be deemed a final agency action and shall bind the 
     agency whose supervisory determination was the subject of the 
     review and the financial institution requesting the review.
       ``(f) Right to Judicial Review.--A financial institution 
     shall have the right to petition for review of final agency 
     action under this section by filing a Petition for Review 
     within 60 days of the Director's decision or the Council's 
     decision in the United States Court of Appeals for the 
     District of Columbia Circuit or the Circuit in which the 
     financial institution is located.
       ``(g) Report.--The Director shall report annually to the 
     Committee on Financial Services of the House of 
     Representatives and the Committee on Banking, Housing, and 
     Urban Affairs of the Senate on actions taken under this 
     section, including the types of issues that the Director has 
     reviewed and the results of those reviews. In no case shall 
     such a report contain information about individual financial 
     institutions or any confidential or privileged information 
     shared by financial institutions.
       ``(h) Retaliation Prohibited.--A Federal financial 
     institutions regulatory agency may not--
       ``(1) retaliate against a financial institution, including 
     service providers, or any institution-affiliated party (as 
     defined under section 3 of the Federal Deposit Insurance 
     Act), for exercising appellate rights under this section; or
       ``(2) delay or deny any agency action that would benefit a 
     financial institution or any institution-affiliated party on 
     the basis that an appeal under this section is pending under 
     this section.
       ``(i) Rule of Construction.--Nothing in this section may be 
     construed--
       ``(1) to affect the right of a Federal financial 
     institutions regulatory agency to take enforcement or other 
     supervisory actions related to a material supervisory 
     determination under review under this section; or
       ``(2) to prohibit the review under this section of a 
     material supervisory determination with respect to which 
     there is an ongoing enforcement or other supervisory 
     action.''.

     SEC. 6. ADDITIONAL AMENDMENTS.

       (a) Riegle Community Development and Regulatory Improvement 
     Act of 1994.--Section 309 of the Riegle Community Development 
     and Regulatory Improvement Act of 1994 (12 U.S.C. 4806) is 
     amended--
       (1) in subsection (a), by inserting after ``appropriate 
     Federal banking agency'' the following: ``, the Bureau of 
     Consumer Financial Protection,'';
       (2) in subsection (b)--
       (A) in paragraph (2), by striking ``the appellant from 
     retaliation by agency examiners'' and inserting ``the insured 
     depository institution or insured credit union from 
     retaliation by the agencies referred to in subsection (a)''; 
     and
       (B) by adding at the end the following flush-left text:

     ``For purposes of this subsection and subsection (e), 
     retaliation includes delaying consideration of, or 
     withholding approval of, any request, notice, or application 
     that otherwise would have been approved, but for the exercise 
     of the institution's or credit union's rights under this 
     section.'';
       (3) in subsection (e)(2)--
       (A) in subparagraph (B), by striking ``and'' at the end;
       (B) in subparagraph (C), by striking the period and 
     inserting ``; and''; and
       (C) by adding at the end the following:
       ``(D) ensure that appropriate safeguards exist for 
     protecting the insured depository institution or insured 
     credit union from retaliation by any agency referred to in 
     subsection (a) for exercising its rights under this 
     subsection.''; and
       (4) in subsection (f)(1)(A)--
       (A) in clause (ii), by striking ``and'' at the end;
       (B) in clause (iii), by striking ``and'' at the end; and
       (C) by adding at the end the following:
       ``(iv) any issue specifically listed in an exam report as a 
     matter requiring attention by the institution's management or 
     board of directors; and
       ``(v) any suspension or removal of an institution's status 
     as eligible for expedited processing of applications, 
     requests, notices, or filings on the grounds of a supervisory 
     or compliance concern, regardless of whether that concern has 
     been cited as a basis for another material supervisory 
     determination or matter requiring attention in an examination 
     report, provided that the conduct at issue did not involve 
     violation of any criminal law; and''.
       (b) Federal Credit Union Act.--Section 205(j) of the 
     Federal Credit Union Act (12 U.S.C. 1785(j)) is amended by 
     inserting ``the Bureau of Consumer Financial Protection,'' 
     before ``the Administration'' each place such term appears.
       (c) Federal Financial Institutions Examination Council Act 
     of 1978.--The Federal Financial Institutions Examination 
     Council Act of 1978 (12 U.S.C. 3301 et seq.) is amended--
       (1) in section 1003, by amending paragraph (1) to read as 
     follows:
       ``(1) the term `Federal financial institutions regulatory 
     agencies'--
       ``(A) means the Office of the Comptroller of the Currency, 
     the Board of Governors of the Federal Reserve System, the 
     Federal Deposit Insurance Corporation, and the National 
     Credit Union Administration; and
       ``(B) for purposes of sections 1012, 1013, and 1014, 
     includes the Bureau of Consumer Financial Protection;''; and
       (2) in section 1005, by striking ``One-fifth'' and 
     inserting ``One-fourth''.

     SEC. 7. REDUCTION OF SURPLUS FUNDS OF FEDERAL RESERVE BANKS.

       (a) In General.--Section 7(a)(3)(A) of the Federal Reserve 
     Act (12 U.S.C. 289(a)(3)(A)) is amended by striking 
     ``$7,500,000,000'' and inserting ``$7,324,285,000''.
       (b) Effective Date.--Subsection (a) shall take effect on 
     June 1, 2018.

  The SPEAKER pro tempore. The bill, as amended, shall be debatable for 
1 hour equally divided and controlled by the chair and ranking minority 
member of the Committee on Financial Services.
  After 1 hour of debate, it shall be in order to consider the further 
amendment printed in part B of House Report 115-595, if offered by the 
Member designated in the report, which shall be considered read, shall 
be separately debatable for the time specified in the report equally 
divided and controlled by the proponent and an opponent, and

[[Page H1626]]

shall not be subject to a demand for a division of the question.
  The gentleman from Texas (Mr. Hensarling) and the gentleman from 
Missouri (Mr. Cleaver) each will control 30 minutes.
  The Chair recognizes the gentleman from Texas.


                             General Leave

  Mr. HENSARLING. Madam Speaker, I ask unanimous consent that all 
Members may have 5 legislative days within which to revise and extend 
their remarks and include extraneous material on the bill under 
consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Texas?
  There was no objection.
  Mr. HENSARLING. Madam Speaker, I yield myself such time as I may 
consume.
  Madam Speaker, I rise today in very strong support of H.R. 4545, the 
Financial Institutions Examination Fairness and Reform Act.
  It is a strongly bipartisan bill, having come out of our committee by 
a vote of 50-10. It is authored by the gentleman from Colorado (Mr. 
Tipton), who serves as the vice chairman of our Subcommittee on 
Oversight and Investigations and is, indeed, one of the leaders in the 
House in bringing regulatory relief to our community financial 
institutions. I want to thank him for his leadership on this very, very 
important issue.
  H.R. 4545 creates transparency and accountability among regulators by 
improving the timeliness of examinations, while also creating a new 
more independent examination appeals process.

                              {time}  1315

  Madam Speaker, this is about, again, transparency. It is about due 
process. The Office of Independent Examination Review created under 
this bill will ensure accountability and fairness for financial 
institutions during their supervisory examinations. It does so by 
providing the right for these institutions to obtain an independent 
review of a material supervisory determination contained in a final 
examination report.
  The creation of this independent review process is particularly 
important for our Nation's community banks and credit unions that will 
now be able to appeal their examination decisions without fear of 
reprisal from their regulator.
  By reforming the process for examining financial institutions to 
ensure it is fair and consistent, Congress will indeed enhance the 
safety and soundness of the financial system overall while ensuring 
Main Street businesses can access the liquidity and capital resources 
they need to grow and create jobs. Again, Madam Speaker, this is why 
this is so important. Ultimately, this is about ensuring a free flow of 
credit to Main Street businesses and families.
  Many of our community financial institutions have felt a very, very 
heavy hand of burdensome Federal regulations that were intended--or so 
we were told--for the largest and most complex institutions; and 
regulators, unfortunately, seem to ignore congressional directive and 
apply each one of these standards to our smallest institutions. Thus, 
yesterday, Madam Speaker, we voted on the TAILOR Act, also authored by 
the gentleman from Colorado, that would also help ensure these 
regulations are tailored to the size and complexity of the institution.
  Without having due process and fairness in this exam review, the 
result has been catastrophic. This regulatory burden, of which this is 
a part, has been resulting in the closing or merger of one community 
bank or credit union per day, on average. And again, they are not being 
lost to natural causes.
  Our community financial institutions serve as the backbone of our 
American economy, and we simply cannot afford to lose them. As chairman 
of the Financial Services Committee, in my sixth year, my colleagues on 
both sides of the aisle are all too familiar with this problem. I hear 
from credit unions and community banks every day.
  I heard from West Community Credit Union in Missouri, who wrote: 
``This one-size-fits-all approach is simpleminded and has real 
consequences. We are beginning to make changes that will negatively 
impact our ability to continue to serve members in meeting their home 
equity lending needs.''
  In fact, Madam Speaker, we know that a number of banks and credit 
unions have had to leave mortgage lending because of the regulatory 
burden.
  Then there is County-City Credit Union in Wisconsin, who said: 
``Small credit unions are dropping every day. Unless we get immediate 
relief, there won't be any left. That would be tragic for our members 
and the very fabric of our country. Please help us, and help us right 
now.''
  I have good news. Help is on the way if we can get a good, solid vote 
this afternoon.
  The CEO of Commonwealth National Bank in Tennessee wrote: ``The fact 
remains that there are fewer community banks today than there were 
several years ago, a trend that will continue until rational 
changes''--for example, like the ones we are speaking of today, Madam 
Speaker--``are made that will provide some relief to America's hometown 
banks.''
  Again, we are hearing this plea every single day. So there is good 
reason why H.R. 4545 was reported by this committee with a strong 
bipartisan vote, 50-10, including a majority support of the Democrats 
on the committee.
  Again, the bill is strongly bipartisan, it is practical, and it is 
necessary. H.R. 4545 will allow financial institutions, again, to have 
supervisory determinations reviewed by a newly established independent 
examination review board. This will allow for uniformity among 
regulatory agencies, again, while making the overall exam process more 
fair and more efficient.
  The bill does not prevent a regulatory agency from conducting 
examinations or imposing restrictions on financial exams, but, again, 
it will restore fairness, due process, and accountability for the sake 
of our community banks and credit unions; and, more importantly, for 
the sake of those who still have the American Dream of either buying 
their own home, starting their own business, or sending that first kid 
to college, it is imperative that we enact H.R. 4545.
  Madam Speaker, I reserve the balance of my time.
  Mr. CLEAVER. Madam Speaker, I yield myself such time as I may 
consume.
  Madam Speaker, I rise in opposition to H.R. 4545.
  Today we are considering yet another measure that would weaken our 
system of financial regulation and bog down regulators in their 
important work. It would ultimately take us right back to some of the 
problems that led to the largest financial crisis since the Great 
Depression. The bill puts financial institutions' profits before the 
protection of consumers and the best interests of the American public.
  I rise, Madam Speaker, to say to Members of both sides of the aisle 
that we must remember the past as we create policies. I was here during 
that entire period, and it created a very, very heavy darkness over 
this entire country.
  In the years preceding the financial crisis, the Federal Reserve 
failed to write rules stopping predatory, risky mortgage loans. The OCC 
and OTS preempted State regulators from reining in mortgage abuses. The 
Federal Reserve Bank of New York and other regulators failed to stem 
excesses at large companies and did not downgrade troubled companies 
until it was too late. Legislation such as H.R. 4545 sets the stage to 
return us to an ineffective regulatory system.
  Republicans have made it a habit to falsely claim that their 
legislation is designed to benefit small community banks and credit 
unions. There are some things that could be changed to improve Dodd-
Frank and to provide responsible relief for small community 
institutions, which I believe we all recognize did not cause the 
financial crisis.

  I have said in our committee and I will say openly in any other 
place, including on the floor here, that there are some things we can 
repair in Dodd-Frank. But what this bill would do is give all regulated 
financial institutions an additional way to appeal and, thereby, 
postpone material supervisory determinations of their prudential 
regulator and of the Consumer Financial Protection Bureau.

[[Page H1627]]

  In other words, messy megabanks and other big financial firms could 
appeal and delay adverse determinations such as a downgrade of a bank's 
credit rating for capital asset quality management, earnings, 
liquidity, and sensitivity to the market risk. It would also enable 
them to appeal significant deficiencies of their anti-money laundering 
programs, findings related to the violations of various rules, or a 
downgrade of their Community Reinvestment Act ratings.
  Let's think about this for just a minute. Some banks would be 
allowed, under this bill, to appeal the OCC's historic and well-
deserved double downgrade of its CR rating. Under this bill, Wells 
Fargo, for example, would be allowed to unleash its army of lawyers to 
not only fight against the rating, but to tie the OCC up in 
proceedings. We all know that when the banks who spend millions on 
legal teams each year deploy those resources, they deploy them to win; 
and if they win, then American consumers lose.
  But let's focus on CRA. CRA was intended to ensure that institutions 
were making loans and providing services in the lower-income and 
moderate-income neighborhoods in which they were located to address the 
problems of redlining.
  As highlighted in the recent report by the Center for Investigative 
Reporting, redlining is not just some relic of the past. Sadly, 
painfully, and embarrassingly, redlining appears to be still very much 
an ongoing, troubling problem that continues to harm many minority 
mortgage loan borrowers in cities all across the United States of 
America.
  This bill will make redlining worse, and that will happen because, 
instead of improving their ratings and trying to end discriminatory 
lending practices, bank executives will simply challenge these rates 
and bully their own regulators into submission.
  Now, this may be unintentional, as I would presume to believe, but 
this bill ignores the fact that prudential regulators and the Consumer 
Bureau each already have an agency ombudsman and an intra-agency formal 
review and appeals process. What's more, messy megabanks already have 
existing avenues to bring a court challenge to any form of regulatory 
enforcement act.
  Thus, what this bill would actually do is create unprecedented 
barriers to the effective, prudential, and consumer protection 
supervision of the messy megabanks. It will give messy megabanks and 
predatory lenders, including payday lenders, an additional way to 
resist corrective actions to avoid violations of law or safety and 
soundness risk. As a result, the bill would allow these financial 
institutions to bog down agencies with frivolous appeals.
  In a letter opposing H.R. 4545, the National Consumer Law Center 
wrote that the effective bill ``would be most pronounced at the largest 
banks who could appeal dozens or hundreds of material findings from 
every examination creating enormous roadblocks to supervision. The bank 
supervision process has been the first line of regulatory defense 
against threats to bank safety and soundness for a century or more. 
H.R. 4545 creates unprecedented roadblocks to the effectiveness of bank 
supervisory determinations and could be devastating to effective 
regulatory oversight in areas ranging from basic prudential oversight 
to key consumer protections that make our financial markets fairer.''
  In addition, the nonpartisan Congressional Budget Office found that 
H.R. 4545 would increase the deficit by hundreds of millions of 
dollars--by hundreds of millions of dollars. It would increase by 
hundreds of millions of dollars. Hundreds of millions of dollars it 
would increase. Millions of dollars would be increased because banks 
would be more likely to fail and need government assistance.
  In sum, H.R. 4545 would weaken our Nation's system of financial 
regulation, and, in so doing, it would recklessly set the stage for a 
return to the captive, hamstrung regulatory system that existed in the 
years before the 2008 financial crisis that enabled the risky profit-
fueled activities of large, complex, messy megabanks and other titans 
on Wall Street to go unchecked. I therefore urge my colleagues to 
oppose H.R. 4545.
  Madam Speaker, I reserve the balance of my time.
  Mr. HENSARLING. Madam Speaker, I yield myself 30 seconds just to say 
to my friend from Missouri, as he recounts his parade of horribles, 
that this bill was supported by a majority of Democrats on the 
committee, including Mr. Crist of Florida, Democrat; Mr. Delaney of 
Maryland, Democrat; Mr. Foster of Illinois, Democrat; Mr. Gonzalez of 
Texas, Democrat; Mr. Gottheimer of New Jersey, Democrat; Mr. Heck of 
Washington, Democrat; and Mr. Himes of Connecticut, Democrat.
  I think my 30 seconds is winding down, but perhaps I can share the 
rest of the Democratic Members who supported this excellent piece of 
legislation.
  Mr. Speaker, I yield 5 minutes to the gentleman from Colorado (Mr. 
Tipton), who is back with us again today. He is the vice chairman of 
the Financial Services Subcommittee on Oversight and Investigations and 
is the author of H.R. 4545.
  Mr. TIPTON. Mr. Speaker, I appreciate the opportunity today to be 
able to advance an important piece of bipartisan legislation. The 
Financial Institutions Examination Fairness and Reform Act seeks to 
bring fairness to the Federal financial regulators' examination appeals 
process by instituting a uniform framework free from examination 
retaliation.
  Our community banks and credit unions currently have no independent 
recourse in the appeals process of examination decisions. These 
institutions often lack the experience, capacity, and resources needed 
to effectively resolve challenges to Federal financial regulators' 
examination determinations as each regulator has its own different 
rules and standards for the appeals process.
  Under the current examination appeals framework, appeals of material 
supervisory determinations, which are decisions of significant 
consequence that can have serious impact on the financial institution's 
future, run through the agency that handed down the decision in the 
first place.

                              {time}  1330

  Mr. Speaker, that is like asking an arresting police officer to also 
be the judge and the jury when a case goes to trial.
  Put simply, this legislation will move away from that framework and 
establish an independent office of review to address appeals of serious 
consequence, and harmonize and consolidate the appeals process across 
the various Federal regulators so that the review process is fair and 
predictable.
  One banker in Colorado put it to me this way: ``The Dodd-Frank Act 
has added complexity and uncertainty to the entire exam process and to 
the bank's ability to serve its customers confidently and in full 
compliance of regulations.''
  He continues: ``For instance, overlap between the OCC and CFPB is an 
ongoing issue. The OCC lost regulatory oversight with the Dodd-Frank 
Act and the foundation of the CFPB, especially in the fair lending 
world. When the CFPB made it clear they were not going to examine the 
banks over $10 billion on fair lending the way that the OCC had 
historically done it, the OCC started expanding the way that they 
assessed a bank's Compliance Management Program to add questions about 
fair lending, including transaction sampling and testing. It creates a 
very burdensome environment as well as duplication and the risk of 
double jeopardy.''
  Mr. Speaker, an examination environment that runs the risk of 
duplication and double jeopardy between agencies isn't tenable and puts 
our community institutions at risk of being examined into extinction.
  This environment is further complicated by the reality that, 
currently, institutions that want to appeal double jeopardy examination 
results would have to appeal through two regulators who likely aren't 
communicating with one another about the other's exam determinations.
  The Examination Fairness bill before the House today would solve this 
problem by establishing an Office of Independent Examination Review, 
which would function as a consolidated, sober judge of the examination 
appeals process. This newly created office under the Federal Financial 
Institutions Examination Council would provide a community bank or 
credit union an avenue

[[Page H1628]]

for independent recourse to appeal a material supervisory determination 
where fairness, transparency, and timeliness are paramount. Because 
this new review process only applies to material supervisory 
determinations, the new process is limited in scope and reserved only 
for the most serious appeals.
  This legislation is also careful not to constrain the power of the 
regulators to pursue enforcement actions or to prevent them from 
issuing a further material supervisory determination. In fact, 
enforcement actions resulting from a determination would continue to be 
enforced under this new appeals process until the independent office 
either agrees with the finding of the regulator or overturns a 
determination of the regulator.
  Mr. Speaker, by creating consistency; instituting timeline 
expectations of examinations and appeals; increasing transparency; and 
adding independent, sober review of appeals to the rights of the 
financial institutions, H.R. 4545 will go a long way to usher in a new 
environment of fairness in the examination appeals process for small 
banks and credit unions. Giving these institutions independent recourse 
in the appeals process will create greater certainty that they won't 
have to reduce their financial service product offerings because of an 
unfair or untimely review.
  Mr. Speaker, that translates to greater assurances for communities 
across the country that their small banks and credit unions will be 
able to provide a mortgage for their home, a loan for their car, and 
capital for their small businesses to be able to grow.
  This measure passed out of the Financial Services Committee with 
strong bipartisan support, with a majority of our Democrat colleagues 
joining with us to be able to support exam fairness. I would like to 
thank the gentlewoman from New York (Mrs. Carolyn B. Maloney), for her 
support of this measure's consideration here today.
  Mr. CLEAVER. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, the inimitable chair of our committee is absolutely 
right: there are Democrats. This is a bipartisan piece of legislation. 
But it proves what I was trying to say earlier, and that is that I and 
many other people believe that we need to make some changes to Dodd-
Frank. This is just not one of them.
  Mr. Speaker, I reserve the balance of my time.
  Mr. HENSARLING. Mr. Speaker, I yield 3 minutes to the gentleman from 
Missouri (Mr. Luetkemeyer), the chairman of the Financial Institutions 
and Consumer Credit Subcommittee.
  Mr. LUETKEMEYER. Mr. Speaker, I thank Chairman Hensarling for his 
tireless work in bringing this and so many other commonsense bills to 
the floor. I also want to thank the gentleman from Colorado (Mr. 
Tipton) for his commitment to this issue.
  The lack of consistency and quality in the bank examination process 
has created serious problems for financial institutions and their 
customers. Mr. Tipton's legislation aims to remedy many of the issues 
we have heard about from the banks and credit unions in our 
congressional districts.
  H.R. 4545 will allow financial institutions to have supervisory 
determinations reviewed by a newly established independent examination 
review board. This will create uniformity among regulatory agencies, 
while making the overall exam process fair and efficient.
  The legislation includes several other key reforms, such as 
imposition of a reasonable time limit on examiners to provide exam 
results to institutions. It may seem like a simple request in the bill, 
a simple provision, but, today, institutions may wait as much as a year 
or more--in some cases, several years--to get the results of a single 
exam.
  How can you be expected to comply with regulations if the regulators 
don't get back to you in a timely fashion with their feedback?
  I myself spent several years as a bank examiner. The relationship 
between banker and examiner was a collegial one. Examiners would work 
with bankers to make sure they understood their rules and address the 
issues that manifested themselves during the course of the examination. 
If an institution failed to fix those issues, it then faced appropriate 
repercussions.

  Today's exam environment is completely different. Financial 
regulators seem to play a constant game of ``gotcha.'' The only 
recourse for a financial institution is to turn to an appeals process 
that, quite frankly, has a predetermined outcome.
  Mr. Speaker, something has to change.
  To be clear, this bill does not prevent regulatory agencies from 
conducting exams or imposing restrictions on financial institutions. 
What it does is restore order to the exam process, which, for far too 
long, has been politicized and abused.
  This is an incredibly important measure and one that I hope will 
receive support from all my colleagues.
  Mr. Speaker, I thank the gentleman from Colorado for his work.
  Mr. CLEAVER. Mr. Speaker, I reserve the balance of my time.
  Mr. HENSARLING. Mr. Speaker, I yield 3 minutes to the gentleman from 
North Carolina (Mr. Pittenger), who is the vice chairman of the 
Financial Services Subcommittee on Terrorism and Illicit Finance.
  Mr. PITTENGER. Mr. Speaker, I would like to convey my deep 
appreciation to my colleague on the Financial Services Committee, Mr. 
Tipton, for his efforts to improve and reform the examination process 
for our Nation's financial institutions.
  H.R. 4545 is designed to address enduring concerns about the lack of 
consistency and quality in the bank examination process. The current 
exam process can be both opaque and secretive. Coupling this with 
overburdensome regulations and increased compliance costs have forced 
many community banks and credit unions to close up shop or reduce their 
ability to provide for consumers.
  Look no further than my State, North Carolina, which has lost about 
50 percent of its banks since the financial crisis. In my own city of 
Charlotte, a decade ago, we had six community banks. Today, we only 
have one because of the burdensome and costly compliance requirements.
  Mr. Tipton's legislation creates a fair and impartial process for 
financial institutions to appeal their examinations, which gives the 
necessary clarity for banks and credit unions to provide services to 
their customers, leading to a job creation and economic prosperity 
environment.
  That is why I want to thank the gentleman from Colorado for working 
on this bipartisan piece of legislation. It is long past time that we 
provide commonsense reforms in a transparent approach regarding 
regulators' decisionmaking during the examination process.
  Mr. CLEAVER. Mr. Speaker, I reserve the balance of my time.
  Mr. HENSARLING. Mr. Speaker, I yield 3 minutes to the gentleman from 
Pennsylvania (Mr. Rothfus), the vice chairman of the Financial Service 
Subcommittee on Financial Institutions and Consumer Credit.
  Mr. ROTHFUS. Mr. Speaker, I thank the chairman for yielding.
  Mr. Speaker, I rise in support of the Financial Institutions 
Examination Fairness and Reform Act.
  As the vice chairman of the Financial Institutions and Consumer 
Credit Subcommittee, and as a longtime advocate for examination and 
review reforms, I commend my colleague, Representative Tipton, for his 
hard work on this issue.
  As we all know, our financial regulatory agencies are not without 
their flaws. From time to time, examiners offer decisions that are 
misguided, and these decisions deserve to be challenged. Managers of 
financial institutions that believe that the decisions passed down by 
their examiners are wrong deserve a chance to challenge those decisions 
at an independent forum and, if necessary, in the courts. We are all 
better served by a financial supervisory structure that subjects 
decisions to the scrutiny of further review.
  I know community bankers in western Pennsylvania who have struggled 
with their examiners for years to get flawed determinations changed. In 
many cases, these individuals were doing the right thing for their 
companies and their communities. Without the benefit of a clear 
timeline, this process has been allowed to drag on.
  Without a truly independent review process and protection against 
retaliation, these men and women working in

[[Page H1629]]

our community financial institutions understand that they are facing an 
uphill battle. The current system is not independent and it is not 
sufficiently transparent. This is unfair. It is bad for our community 
financial institutions and it is detrimental to the integrity of our 
regulatory system.
  I again urge my colleagues to support Representative Tipton's work.
  Mr. CLEAVER. Mr. Speaker, I yield the balance of my time to the 
gentlewoman from California (Ms. Maxine Waters), and I ask unanimous 
consent that control she may control that time.
  The SPEAKER pro tempore (Mr. McClintock). Is there objection to the 
request of the gentleman from Missouri?
  There was no objection.
  Ms. MAXINE WATERS of California. Mr. Speaker, I reserve the balance 
of my time.
  Mr. HENSARLING. Mr. Speaker, I yield 2 minutes to the gentleman from 
Tennessee (Mr. Kustoff), a hardworking member of the Financial Services 
Committee.
  Mr. KUSTOFF of Tennessee. Mr. Speaker, I rise today in support of the 
Financial Institutions Examination Fairness and Reform Act. I also want 
to thank Representative Tipton for bringing this fine legislation.
  In the Financial Services Committee, we often focus on relieving the 
regulatory burdens our smaller financial institutions face. While 
larger banks have the bandwidth, if you will, to comply with various 
regulations, our smaller financial institutions have their hands tied 
with onerous regulations and high compliance costs. Too often, this 
strains the ability for our smaller banks and credit unions to loan 
money to people who rely on them for capital.

  The legislation that we are discussing today creates more 
transparency and certainty for community banks and credit unions 
undergoing each regulators' examination process. Currently, each of the 
four regulators has its own appeals process. As we know, each regulator 
has their own rules about what decisions can or cannot be repealed.
  In many instances, this exam process can take months and is conducted 
secretively, often leaving the institution in the dark about the 
possible violations. If an unfavorable determination results from the 
exam, the financial institution is then forced to limit its ability to 
open new branches or from offering certain financial products.
  Folks in every community across the country rely on these financial 
institutions to access credit, grow a business, purchase a new car, or 
pay for an unexpected expense. This important legislation restores some 
of the transparency to the examination process and prevents regulators 
from being the cop, the judge, and the jury.
  In addition, this legislation will restore accountability on the part 
of the regulators to review their own decisions, and to do so in a 
timely fashion to limit the impact to our community financial 
institutions.
  As we all can agree, our community banks and credit unions are best 
equipped to work with communities in which they serve.
  The SPEAKER pro tempore. The time of the gentleman has expired.
  Mr. HENSARLING. Mr. Speaker, I yield an additional 30 seconds to the 
gentleman.
  Mr. KUSTOFF of Tennessee. This legislation provides a system of 
checks and balances by establishing clear standards to ensure the 
consistency and transparency of all examinations.
  I want to thank Chairman Hensarling and the Financial Services 
Committee for their hard work. I urge all of my colleagues to support 
this legislation.

                              {time}  1345

  Ms. MAXINE WATERS of California. Mr. Speaker, I yield myself such 
time as I may consume.
  This is a very important bill that I am asking the Members of 
Congress to vote ``no'' on because we don't want to empower the 
megabanks and huge conglomerates to be able to skirt adverse 
supervisory decisions about regulators.
  The bill would give all financial institutions, regardless of their 
size, an additional method to appeal, thereby significantly delaying 
adverse determinations by creating a new independent review office to 
conduct de novo reviews without concern for the institution's safety 
and soundness or the protection of consumers.
  This bill goes far beyond relief for community banks and credit 
unions by enabling megabanks and nonbanks, like payday lenders and 
Equifax, to pursue limitless challenges to the agency's actions in 
court.
  If you take a look at the examples that we have prepared for you, 
take a look at Wells Fargo. Wells Fargo has been at the center of 
attention in this country for the fraudulent accounts that it 
established using their customers' accounts and information to create 
more accounts without informing their customers; and then they had the 
illegal student loan servicing practices that we have all been so 
concerned about; and even after the fraudulent accounts were exposed 
and a fine was made because of the harm that they had caused to their 
customers, we then found that they had inappropriate force-placed 
insurance, which means that people who were already paying for their 
insurance were forced to pay again because the bank basically forced 
them to have additional insurance.
  And then there is J.P. Morgan with illegal credit card practices and 
discriminatory lending, sale of bad credit card debt, and illegal robo-
signing.
  And Citi with deficient mortgage servicing and foreclosure processing 
practices; inappropriate fees, marketing, billing, administration of 
add-on products; and foreclosure abuses.
  Bank of America, also mortgage abuses, deficient mortgage servicing 
and foreclosure processing practices, credit monitoring abuses, 
deceptive marketing for add-on products, violations of the 
Servicemembers Civil Relief Act.
  Now, we find that these banks have determined--they act in ways that 
we know that fighting is just the cost of doing business. It is a slap 
on the wrist. And they are going to continue to be able to get away 
with this. And if they are saying that the bank examiners who come in 
and find these adverse conditions somehow will be ignored and they can 
literally get around them, then we are going to add to the problems of 
our consumers in this country.
  Mr. Speaker, I am certainly asking for a ``no'' vote on this bill, 
and I reserve the balance of my time.
  Mr. HENSARLING. Mr. Speaker, I yield myself 2 minutes to say that I 
just find some of the comments of the ranking member curious.
  I know if she continues this attack on the so-called Wall Street 
megabanks, I just continue to be so curious why she supports bailing 
them out? She voted against the Financial CHOICE Act that would have 
ended bailouts to these megabanks. And so she supports a bailout fund 
in Dodd-Frank to continue to bail out these banks.
  Second of all, if she continues to attack them, I guess I am curious 
also why she supports the Federal Reserve's program to pay interest on 
excess reserves. She supports taking taxpayer money to pay the so-
called Wall Street megabanks not to loan money to Main Street, 
something that I have opposed as have many other Republicans on this 
side of the aisle.
  And then to make matters worse, Mr. Speaker, on this interest on 
excess reserves, these banks are getting almost 10 to 15 times what our 
constituents are getting on their savings accounts.
  In many cases, it is the difference between 0.07 percent, versus 1.5 
percent. And so I understand, again, she attacks them, but then I am 
just curious, why does she find so many ways to support them?
  So personally, I think in this economy, there is a need for community 
banks and credit unions. There is a need for regional banks, and there 
is a need for global banks as well. What we want is accountability. We 
want less Federal control, and what we want is more private capital. We 
want to ensure that there are never more taxpayer bailouts.
  And again, as I said earlier, as this so-called parade of horribles 
was brought to the attention of the House, why is it that a majority of 
Democrats on her committee support this legislation? Sixteen of them 
support the legislation.
  Mr. Speaker, I reserve the balance of my time.

[[Page H1630]]

  

  Ms. MAXINE WATERS of California. I yield myself such time as I may 
consume.
  Mr. Speaker, I always have these lively debates with my chairman, and 
he never fails to point out that I voted for the bailout. And, of 
course, oftentimes when he comes with one of these deregulation bills, 
he talks about bipartisan and how he had Democrats. Well, I want you to 
know the bailout was a bipartisan thing. It was appointed by both 
Democrats and Republicans at a time when we were in great difficulty in 
this country.
  It was the Bush bailout, and it was Mr. Paulson, appointed by Mr. 
Bush, who was the Secretary who led it and gave us the advice and had 
us participate in saving our economy based on the information that he 
had uncovered about the risk that was now proposed for our country.
  So I am not for bailing out big banks at all. We had an emergency 
situation in this country where, again, it was the Bush bailout that we 
had to deal with the fact that we were in great danger. But let me just 
also say this: we have something now that we put into Dodd-Frank reform 
called the Orderly Liquidation Authority scenario that we are able to 
look at banks, and, because of the stress testing that they have gone 
through, if there is a need for an orderly resolution because there are 
problems with the bank, we cannot only recommend breaking off parts of 
the bank, but reordering parts of the bank and doing what is necessary 
to ensure that the bank does not get into a situation where it fails 
and triggers the failures of others in our economy.

  So it is the Orderly Liquidation Authority that I am referring to, 
and I do not support bailing out big banks. This is one thing that I 
join with my chairman on. We both agree that we should not be bailing 
out these big banks. And, of course, that is what Dodd-Frank is helping 
us to avoid.
  Mr. Speaker, I reserve the balance of my time.
  Mr. HENSARLING. Mr. Speaker, I am very pleased now to yield 3 minutes 
to the gentleman from Wisconsin (Mr. Duffy), the chairman of the 
Financial Services Committee Subcommittee on Housing and Insurance.
  Mr. DUFFY. Mr. Speaker, I thank the chairman for yielding.
  Mr. Speaker, I would just note that the Orderly Liquidation Authority 
is an authority to bail out big banks, consistent with the bailout that 
the ranking member voted for in, I believe, 2008, that the chairman, I 
believe, voted against.
  When we talk about those who use rhetoric to say they don't support 
big banks, but then actually vote for them, I think that is a hard note 
to take.
  But I rise today to support H.R. 4545, the Financial Institutions 
Examination Fairness and Reform Act, a bipartisan measure introduced by 
Mr. Tipton.
  This bill would amend the Federal Financial Institutions Examination 
Council Act of 1978, a long time ago, by updating the definition of 
financial institutions, establishing new requirements for the final 
examination report process, and creating an office of independent 
examination review, giving some independence here, some common sense.
  These updates are critical because, in 1994, Congress directed 
Federal regulators to establish an independent intra-agency appellate 
process for institutions to seek the review of examination ratings, 
adequacy of loan loss reserve, and clarifications on loans.
  I agree that these entities should be reviewed to ensure that they 
are financially sound. We want to make sure that we prevent failure so 
we don't have folks across the aisle voting for bailouts. However, we 
are hearing from our community financial institutions, the ones that 
serve most of my district in Wisconsin, that the avenues needed to 
appeal these determinations are limited. The process is secretive, and 
the regulators are overempowered.
  The intra-agency review process has also been criticized as not being 
independent because the regulatory determinations are reviewed, not by 
a third party, but by the employees of the same regulator handing down 
the verdict. So this is the judge, the jury, and the executioner.
  I was a prosecutor, and when I presented a case to a jury and they 
found someone guilty, I didn't make the defendant appeal the verdict to 
the same jury that found him guilty. They have got to go to a third-
party appellate process, independent reviewers. That is the way the 
American system works and should work in this scenario as well.
  Our community bankers explained that they feel victimized. They feel 
retribution for challenging the outcomes of these exams, and that is a 
bad thing. Add to the fear the fact that these examinations lack 
transparency, and now we have real problems to contend with which is 
why the solution is so bipartisan. The chairman mentioned 16 Democrats 
on the committee voted for this commonsense piece of legislation.
  That is why the bill is so important. It will embolden our community 
banks by creating an independent auditor to ensure fairness and 
transparency.
  The SPEAKER pro tempore. The time of the gentleman has expired.
  Mr. HENSARLING. Mr. Speaker, I yield an additional 30 seconds to the 
gentleman from Wisconsin.
  Mr. DUFFY. Mr. Speaker, this bill ensures that there is an open forum 
for these institutions to discuss the examination procedures, 
practices, and policies without fear of reprisals. It gives them a 
little bit of freedom.
  Importantly, the office would also review regulators' procedures to 
make sure that their written examination policies are being followed 
and adhered to.
  Lastly, the bill would provide a right to a hearing upon appeal. The 
decision as to whether the appeal is heard on the record will be left 
to the petitioner. Again, you are getting due process. We want due 
process. That is something we all fight for. No one disagrees on that. 
Why can't we offer that to our small community banks and credit unions 
that oftentimes feel victimized? This is a bipartisan bill.
  This is common sense, and I would encourage my good friend, the 
ranking member--who I like so much--to join us and let's get something 
done for small community banks.
  Ms. MAXINE WATERS of California. Mr. Speaker, I yield myself such 
time as I may consume.
  Mr. Speaker, I appreciate the offer from my good friend to join him, 
but I don't think I will be doing that today.
  Mr. Speaker, I include in the Record organizations that have sent us 
information in opposition to this bill. It includes the National 
Consumer Law Center, AFSCME, the Center for American Progress, and 
Americans for Financial Reform.

                                 National Consumer Law Center,

                                    Washington, DC, March 8, 2017.
     Re Oppose S. Amdt. 2140 (Moran), HR 4545, The Financial 
         Institutions Examination Fairness Act; creates roadblocks 
         to bank supervision for safety and soundness, consumer 
         protection.

     Senator,
     U.S. Senate, Washington, DC.
       On behalf of our low income clients, I urge you to oppose 
     Senate Amendment 2140 to S. 2155, which incorporates HR 4545 
     (Tipton), The Financial Institutions Examination Fairness 
     Act. The bill would create unprecedented barriers to 
     effective prudential and consumer protection supervision of 
     banks, allowing banks to resist corrective actions to address 
     law violations or safety and soundness risks, bogging down 
     agencies with frivolous appeals.
       HR 4545 would grant regulated banks the right to appeal any 
     supervisory determination made by any prudential banking 
     agency or by the Consumer Financial Protection Bureau (CFPB) 
     to a new ``Office of Independent Examination Review'' 
     established in the Federal Financial Institutions 
     Examinations Council (FFIEC). Upon appeal by a supervised 
     bank, this new office would be required to undertake a 
     repetitive de novo review of the agency's supervisory 
     decision. No deference to the initial examination findings or 
     the agency's judgment would be required in this review.
       This new process is duplicative to appeals processes and 
     ombudsmen already present. The CFPB, FDIC, OCC, Federal 
     Reserve, and National Credit Union Administration each 
     already have an agency ombudsman and an intra-agency formal 
     review and appeals process. In addition, banks may bring a 
     court challenge to any formal regulatory enforcement action.
       HR 4545 would enormously increase the ability of banks to 
     resist supervisory decisions. This effect would be most 
     pronounced at the largest banks, who could appeal dozens or 
     hundreds of material findings from every examination, 
     creating enormous roadblocks to supervision. The bank 
     supervision process has been the first line of regulatory 
     defense against threats to bank safety and soundness for a 
     century or more. HR 4545 creates unprecedented roadblocks to 
     the effectiveness of bank supervisory determinations and 
     could be devastating to effective regulatory oversight in 
     areas ranging from basic

[[Page H1631]]

     prudential oversight to key consumer protections that make 
     our financial markets fairer.
       I urge you to oppose HR 4545 and any amendment that 
     incorporates the bill.
           Yours very truly,
                                               Lauren K. Saunders,
     Associate Director.
                                  ____



                                                       AFSCME,

                                   Washington, DC, March 13, 2018.
     House of Representatives,
     Washington, DC.
       Dear Representative: On behalf of the 1.6 million members 
     of the American Federation of State, County and Municipal 
     Employees (AFSCME), I urge you to oppose the Financial 
     Institutions Examination Fairness and Reform Act (H.R. 4545), 
     which would undermine the federal government's enforcement of 
     bank regulations and related systemic risk protections by 
     granting every bank--of any size--a new right to appeal and 
     postpone existing banking regulators' adverse supervisory 
     determinations. Now is not the time to undermine these 
     protections.
       AFSCME strongly opposes H.R. 4545 because it would 
     undermine bank regulators' existing authority and related 
     systemic safeguards that protect our economy from risky 
     practices of banks. This would impose added costs and risks 
     on working families and consumers. Specifically, H.R. 4545 
     would grant regulated banks the right to appeal a prudential 
     banking agency's material supervisory determination. H.R. 
     4545 installs the new appeals process in a not yet created 
     Office of Independent Examination Review (OIER) located 
     within the Federal Financial Institutions Examinations 
     Council (FFIEC) and would require OIER to initiate a de novo 
     review of the appealed supervisory decision with zero 
     deference to the regulators' prior pre-appeal review, 
     findings, or determinations. By creating a de novo appeals 
     process, H.R. 4545 further incentivizes banks to challenge 
     every supervisory decision and allows banks to more easily 
     circumvent and delay penalties. Furthermore, H.R. 4545 also 
     would grant these appeal rights to any nonbank under 
     supervisory authority of the Consumer Financial Protection 
     Bureau (CFPB) and require OIER de novo review.
       Unlike the current process with existing prudential 
     regulators, OIER would not be responsible for our banking 
     system's safety and soundness, and thus OIER's decision-
     making would be narrower in purpose and thereby increase risk 
     to America's economy. We do not need H.R. 4545's appeals 
     process because a formal review and appeals process along 
     with ombudsmen already exist at affected banking agencies, 
     such as CFPB, FDIC, the Federal Reserve, National Credit 
     Union Administration, and OCC. Furthermore, banks already can 
     bring a court challenge to any formal regulatory enforcement 
     action.
       H.R. 4545's scope is huge and not merely limited to small, 
     community depository banks. At committee mark-up, an 
     amendment to narrow H.R. 4545's scope to community financial 
     institutions below $10 billion in assets was rejected 
     clarifying the intent that H.R. 4545 would benefit enormous 
     banks, including Wells Fargo. The tax bill enacted just 
     months ago in December 2017 grants many of these same large 
     banks tens of billions of dollars in new tax breaks. 
     Moreover, many are already earning record profits.
       We are nearing the 10th anniversary of the 2008 financial 
     crisis, which triggered U.S. and global recessions, America's 
     multiyear underwater mortgage crises, and bankruptcies for 
     many companies that nearly sank the U.S. economy. The 
     subsequent Dodd-Frank financial reform protections added 
     essential safeguards that stabilized our economy. We should 
     not weaken these protections. Rather than rolling back Dodd-
     Frank protections, we should improve protections for working 
     families from the abuses of large banks like Wells Fargo, and 
     take steps to penalize large data companies like Equifax for 
     breaches of its consumer data.
       AFSCME opposes this harmful risky bill because it increases 
     the likelihood that banks, both large and small, will 
     continue harming working families and consumers and trigger 
     new systemic economic problems. AFSCME urges you to vote 
     against H.R. 4545.
           Sincerely,
                                                       Scott Frey,
     Director of Federal Government Affairs.
                                  ____



                                 Center for American Progress,

                                   Washington, DC, March 12, 2018.
     Hon. Paul Ryan,
     Speaker, House of Representatives,
     Washington, DC.
     Hon. Nancy Pelosi,
     Democratic Leader, House of Representatives,
     Washington, DC.
       Dear Speaker Ryan and Leader Pelosi: The Center for 
     American Progress (``CAP'') is writing today to express 
     opposition to the following bills impacting the regulation of 
     financial institutions: H.R. 4293, the Stress Test 
     Improvement Act of 2017; H.R. 4545, the Financial 
     Institutions Examination Fairness and Reform Act; H.R. 4566, 
     the Alleviating Stress Test Burdens to Help Investors Act; 
     H.R. 1116, the TAILOR Act of 2017; and H.R. 4061, the 
     Financial Stability Oversight Council Improvement Act of 
     2017. These bills may be considered on the floor of the House 
     of Representatives in the near-term, so we welcome the chance 
     to share our concerns regarding this series of bills with you 
     and your Members.
       H.R. 4293, the Stress Test Improvement Act of 2017, would 
     require the Federal Reserve Board to open up its Dodd-Frank 
     Act Stress Testing (DFAST) and Comprehensive Capital Analysis 
     and Review (CCAR) scenarios, methodologies, loss models, and 
     other information to public notice and comment prior to 
     conducting the stress tests. This is a similar policy 
     proposal to what was included in Treasury Secretary Steve 
     Mnuchin's banking report released in June 2017. H.R. 4293 
     would also limit the frequency of the CCAR process to no more 
     than once every two years and would prohibit the Fed from 
     objecting to a firm's capital plan when a firm fails the 
     qualitative portion of CCAR.
       These proposed changes to the Fed's stress testing 
     framework would severely undermine the effectiveness of the 
     stress tests. Stress testing is arguably the most important 
     new prudential tool implemented by the Fed following the 
     2007-2008 financial crisis. The annual stress tests help 
     ensure that banks fund themselves with enough capital to 
     withstand losses from a severe negative shock and economic 
     downturn, while continuing to provide the credit and 
     financial services the real economy needs to grow 
     sustainably. H.R. 4293's requirement that the Fed open DFAST 
     and CCAR to public notice and comment would essentially give 
     the tests to the banks in advance.
       If a bank knows what the stress testing scenarios are and 
     has the Fed's loss models, it can tailor its balance sheet to 
     limit its projected losses--and in turn limit its required 
     capital buffer. Opening up the stress tests to this type of 
     gaming and window dressing would be a dangerous deviation 
     from post-crisis best practices. It runs counter to the 
     purpose of stress testing, which is to mimic a financial 
     shock--inherently a surprise that the bank doesn't get a 
     chance to comment on or influence in advance. Moreover, this 
     change could lead to an increase in the correlation of bank 
     balance sheets across the banking sector, making the 
     financial system in general more vulnerable to certain 
     shocks.
       H.R. 4293's requirements that CCAR be conducted no more 
     often than once every two years and that the Fed cannot 
     object to a bank's capital plan if the bank fails the 
     qualitative portion of CCAR are also deeply misguided. A lot 
     can change in two years. Risks can build up and capital 
     positions can deteriorate quickly. CCAR must remain a 
     rigorous, forward looking, and annual exercise. The 
     qualitative element of CCAR, which applies to banks with over 
     $250 billion in assets or $10 billion in foreign exposure, is 
     also crucial for improving and maintaining robust capital 
     planning processes and procedures at the largest banks in the 
     country. Taking the teeth out of the qualitative portion of 
     CCAR would take a tool away from the Fed and have a negative 
     impact on the risk management capacity at these massive, 
     complex institutions.
       H.R. 4545, the Financial Institutions Examination Fairness 
     and Reform Act, would give financial institutions the 
     authority to appeal any material examination decision 
     rendered by the federal banking regulators or Consumer 
     Financial Protection Bureau (CFPB) to the Office of 
     Independent Examination Review--a new office created by the 
     bill. Financial regulators already have internal appeals 
     processes in place through their respective Ombudsman offices 
     and financial institutions can pursue legal remedy for flawed 
     examination decisions through the judicial system. This new 
     office and review process is simply an additional hurdle for 
     regulators to contend with when supervising financial 
     institutions and an additional point at which institutions 
     can slow down or avoid punishments. H.R. 4545 would undermine 
     the examinations process at a time when supervisory authority 
     and penalties for financial sector malfeasance should be 
     strengthened.
       H.R. 4566, the Alleviating Stress Test Burdens to Help 
     Investors Act, would repeal the Federal Reserve Board's 
     discretionary authority to subject nonbank financial 
     companies, that have not been designated by the Financial 
     Stability Oversight Council as systemically important, to 
     annual stress testing. The bill would also repeal the Dodd-
     Frank Act requirement that a federal primary regulator 
     subject nonbank financial companies with more than $10 
     billion in assets to company-run stress testing. The 2007-
     2008 financial crisis made it clear that substantial risk can 
     build up outside of the traditional banking sector. The 
     failure or near-failure at nonbank financial companies like 
     AIG, Bear Stearns, Merrill Lynch, and Lehman Brothers helped 
     bring the global economy to the brink of collapse. Workers, 
     homeowners, and savers all felt the immense economic pain 
     from that unchecked risk in the financial sector.
       Eliminating the Federal Reserve Board's authority to 
     require stress testing at certain nonbank financial companies 
     would needlessly prevent the Fed from acting when necessary. 
     The ability to test a nonbank financial firm's balance sheet 
     to ensure it has enough capital to withstand a financial 
     shock and economic downturn, while continuing to provide the 
     financial services the real economy depends on, is a 
     necessary authority. The same can be said about the company-
     run stress testing that a primary federal regulator will no 
     longer be required to implement if H.R. 4566 is enacted.
       H.R. 1116, the TAILOR Act of 2017, places new requirements 
     on federal financial regulators to further ``tailor'' their 
     respective rules to the riskiness and business models of 
     financial institutions. While a laudable goal,

[[Page H1632]]

     this bill ignores the existing tailoring of regulation by 
     institution type and size. The intent of this bill is to 
     force regulators to minimize regulatory costs without due 
     concern for the significant societal benefits of strong 
     financial regulations. The bill would also give big banks, 
     and small banks alike, ample footing to constantly object to 
     regulations in court--delaying the implementation of 
     important rules on the back-end, or putting pressure on 
     regulators to not even undertake rulemakings on the front-
     end. Moreover, by mandating a seven-year lookback period 
     under which regulators would be required to reconsider 
     existing rules, the bill completely undermines the 
     regulations enacted under the Dodd-Frank Act, the Credit CARD 
     Act, and other laws.
       Separately, CAP sent a detailed letter on H.R. 4061 to you 
     and your Members outlining our strong opposition to the 
     bill--which would render the Financial Stability Oversight 
     Council's authority to designate nonbank financial companies 
     as systemically important, nearly useless.
       For these reasons, CAP recommends that Members vote ``NO'' 
     when these bills are considered on the floor.
           Sincerely,

                                               Gregg Gelzinis,

                              Research Associate, Economic Policy,
     Center for American Progress.
                                  ____



                               Americans for Financial Reform,

                                   Washington, DC, March 12, 2018.
       Dear Representative: On behalf of Americans for Financial 
     Reform, we are writing to urge you to vote in opposition to 
     H.R. 4545, the ``Financial Institutions Examination Fairness 
     and Reform Act,'' which is being considered on the House 
     floor this week. ``Examination fairness'' may sound 
     innocuous, but make no mistake--this legislation would put 
     unprecedented new limits on the powers of bank examiners. The 
     impact of this legislation in weakening bank supervision 
     would be especially great at the nation's largest banks. Its 
     effect would be to substantially increase the risk of 
     systemic problems, and of unfair and predatory treatment of 
     consumers.
       H.R. 4545 would grant banks the right to appeal any 
     supervisory determination made by any bank regulatory agency, 
     including the Consumer Financial Protection Bureau (CFPB), to 
     a new ``Office of Independent Examination Review'' that is 
     outside of any regulatory agency. Upon appeal by a supervised 
     bank, this new office would be required to undertake a de 
     novo review of the agency's supervisory decision. No 
     deference to the initial examination findings or the 
     supervisory agency's judgment would be required in this 
     review.
       This new appeals process is an addition to formal appeals 
     processes and ombudsmen already present at the banking 
     agencies. The agencies affected by this legislation--
     including the CFPB, FDIC, OCC, Federal Reserve, and National 
     Credit Union Administration--each already have an agency 
     ombudsman and an intra-agency formal review and appeals 
     process. In addition, banks are already free to bring a court 
     challenge to any formal regulatory enforcement action.
       By layering an entirely new appeals process on top of 
     existing processes, this bill would greatly increase the 
     ability of banks to resist supervisory oversight and ignore 
     or delay changes called for by supervisors. The impact would 
     be most pronounced at the largest banks, which can receive 
     dozens or hundreds of material findings from every 
     examination. The ability to appeal every one of those 
     material supervisory findings, or just to threaten to appeal 
     them, would create an enormous new barrier to effective 
     supervision of big banks.
       The bank examination process has been the first line of 
     regulatory defense against threats to bank safety and 
     soundness since at least the 1930s. The ``Examination 
     Fairness Act'' would create unprecedented new barriers to the 
     effectiveness of bank examiners by empowering banks to delay, 
     resist, or overturn their decisions. In a practical sense, 
     this would make bank regulation even weaker than it was 
     before the 2008 crisis. It would be harmful to effective 
     regulatory oversight in areas ranging from basic safety and 
     soundness supervision to enforcement of key consumer 
     protections that make our financial markets fairer.
       The ``Examination Fairness Act'' thus goes beyond 
     overturning post-financial crisis regulations to make bank 
     oversight even weaker than it was prior to 2008. As we reach 
     the 10th anniversary of the greatest economic and financial 
     crisis since 1929, it should be obvious that this is 
     completely the wrong direction for Congress to take. Since 
     the crisis, fresh scandals like those at Wells Fargo have 
     continued to remind us that we need effective supervision to 
     prevent pervasive and harmful abuse of consumers.
       We urge you to vote against H.R. 4545.
       Thank you for your attention to this matter.
           Sincerely,
                                   Americans for Financial Reform.

  Ms. MAXINE WATERS of California. Mr. Speaker, let me just read one of 
the paragraphs from the Center for American Progress that I think is so 
profound.
  ``The Financial Institutions Examination Fairness and Reform Act, 
would give financial institutions the authority to appeal any material 
examination decision rendered by the Federal banking regulators or 
Consumer Financial Protection Bureau, CFPB, to the Office of 
Independent Examination Review--a new office created by the bill. 
Financial regulators already have internal appeals processes in place 
through their respective ombudsman offices and financial institutions 
can pursue legal remedy for flawed examination decisions through the 
judicial system.
  ``This new office and review process is simply an additional hurdle 
for regulators to contend with when supervising financial institutions 
and an additional point at which institutions can slow down or avoid 
punishments. H.R. 4545 would undermine the examinations process at a 
time when supervisory authority and penalties for financial sector 
malfeasance should be strengthened.''
  In addition to that, there is another paragraph in the letter from 
Americans for Financial Reform that I think is extremely important in 
explaining why this bill should be opposed.
  It says: ``By layering an entirely new appeals process on top of 
existing processes, this bill would greatly increase the ability of 
banks to resist supervisory oversight and ignore or delay changes 
called for by supervisors. The impact would be most pronounced at the 
largest banks, which can receive dozens or hundreds of material 
findings from every examination. The ability to appeal every one of 
those material supervisory findings, or just to threaten to appeal 
them, would create an enormous new barrier to effective supervision of 
big banks.''
  In essence, Mr. Speaker, what we are saying is, we have our bank 
examiners who are going in and looking for ways to strengthen the banks 
and hoping that they will not find these adverse conditions, but, if 
they do, they have a responsibility to the consumers to try and get 
them corrected or to try and get changes made.

                              {time}  1400

  This bill says, despite adverse conditions that are discovered, we 
don't want to have to comply; we don't want to have to change; we don't 
want to have to correct. We want to fight you. We want to use our vast 
resources to say your examiners didn't know what they were doing.
  They are not so much concerned about the consumers; rather, they are 
more concerned about just being a part of the bureaucracy.
  It doesn't make good sense what they are saying about the examiners 
and why they are not important.
  Mr. Speaker, I reserve the balance of my time.
  Mr. HENSARLING. Mr. Speaker, I yield 3 minutes to the gentleman from 
Oklahoma (Mr. Lucas), a senior member of the Financial Services 
Committee and the former chairman of the House Agriculture Committee.
  Mr. LUCAS. Mr. Speaker, I am pleased to be here for the second time 
in as many days to discuss a bill from Mr. Tipton, my friend and our 
colleague from Colorado. I commend his dedication to find ways to bring 
more credit options to more Americans. This bill is no exception to 
that, and I thank him for sponsoring it.
  This Nation is founded on the idea that those who enforce the law are 
not those who ultimately judge those laws.
  This idea of due process is something all Americans respect and we 
enjoy, but in the case of financial institutions, there has been a 
noted lack of such process during appeals. If a bank or credit union 
today is assessed a postinspection penalty that they feel is based on 
inaccurate or incomplete information, the only recourse is back to the 
regulator that performed the inspection in the first place. Such an 
argument turns the concept of proper process upside down.
  At the very least, I think we would all agree with a number of my 
colleagues who have noted that the judge, the jury, and the executioner 
should be separate. There has to be a better way.
  This bill provides that better way by giving these institutions a new 
recourse so they can be assured of fair treatment. We all know this 
could be an expensive and time-consuming process for a bank or credit 
union, which is all the more reason to provide fair treatment. Smaller 
banks and credit unions that go through this appeal process are 
possibly running the risk of losing an appeal that will severely limit 
their ability to offer credit.

[[Page H1633]]

  For that reason, a newer, fairer process will help all Americans by 
increasing access to credit. I am not pulling that idea out of thin 
air. The National Bankers Association, which represents minority 
bankers, supports the legislation. That should tell us how this bill 
will benefit every American who relies on the financial services and on 
credit.
  Finally, Mr. Tipton's bill does not change the fact that some banks 
and credit unions will lose their appeals. No one is saying that bad 
actors should go unpunished. The point of the bill, however, is to make 
that process as fair as possible. By consolidating the appeals process 
into one office that is separate from the four main banking regulators, 
that fairness can be achieved.
  Again, Mr. Speaker, this bill not only supports the concept of due 
process, but it will also expand credit opportunities for all 
Americans.
  I again commend the bill and the author, and I urge my colleagues to 
vote in favor.
  Ms. MAXINE WATERS of California. Mr. Speaker, may I inquire as to how 
much time I have left.
  The SPEAKER pro tempore. The gentlewoman has 13 minutes remaining.
  Ms. MAXINE WATERS of California. Mr. Speaker, I yield myself the 
balance of my time.
  Mr. Speaker, H.R. 4545 is yet another harmful bill that would help 
out Wall Street and predatory lenders. It has become a theme for the 
majority to claim that their legislation is meant to provide relief for 
small community banks, when, in fact, the legislation plainly benefits 
the Nation's largest banks, including abusive megabanks like Wells 
Fargo and even payday lenders. This bill is yet another example.
  The bill would allow any bank as well as any nonbank supervised by 
the Consumer Financial Protection Bureau to appeal negative supervisory 
determinations made by regulators in the examination process.
  H.R. 4545 makes it more likely that bad actors, including predatory 
megabanks like Wells Fargo, would avoid or delay accountability when 
they break Federal law. It takes our system of financial regulation in 
exactly the wrong direction.
  Megabanks like Wells Fargo already treat the fines they are required 
to pay for violations of the law as simply the cost of doing business. 
They don't need more escape routes to avoid accountability for their 
wrongdoing.
  I have made it clear many times that abusive megabanks with egregious 
patterns of harming consumers should face steep penalties from 
regulators. Last year I introduced H.R. 3937, the Megabank 
Accountability and Consequences Act, which would require the Federal 
prudential banking regulators to fully utilize existing authorities, 
such as the ability to shut down a megabank and ban culpable executives 
and directors from working in the banking industry.
  To get tough on megabanks that repeatedly engage in practices that 
harm consumers, Congress should be focused on measures that strengthen 
consumer protections, provide tailored, responsible relief for 
community banks, and ensure that abusive megabanks are held 
accountable. This bill, which would help megabanks and predatory 
lenders get off the hook when they break the law, should be rejected.
  Mr. Speaker, I yield back the balance of my time.
  Mr. HENSARLING. Mr. Speaker, I yield myself the balance of my time.
  Mr. Speaker, again, this is a very commonsense bill, which is one of 
the reasons it is strongly bipartisan. I am sorry that the ranking 
member has not chosen to be part of that bipartisanship, but over half 
of the committee Democrats on our committee support it. Why? Because 
they understand that it is part of our American DNA to have due 
process.

  When we continue to lose a credit union or a community bank every day 
in America, on average, with their loss, we are losing home ownership 
opportunities, opportunities to grow businesses.
  Because of that regulatory burden, these exams can mean the 
difference between a credit union being open and not being open. They 
can mean the difference between a community bank being open or not 
open. Thus, it means the difference in our constituents getting homes 
and small business loans and auto loans.
  This is common sense. It simply says you ought to be able to appeal 
an exam, have a third party take a look at it.
  Everybody deserves due process in America, including our community 
banks and credit unions, so that is why it is so important that we 
enact H.R. 4545. It came out of our committee with a huge bipartisan 
vote. Let's make sure credit continues to flow throughout America.
  Mr. Speaker, I urge all of my colleagues to support H.R. 4545, and I 
yield back the balance of my time.
  The SPEAKER pro tempore. All time for debate on the bill has expired.


       Amendment No. 1 Offered by Ms. Maxine Waters of California

  The SPEAKER pro tempore. It is now in order to consider amendment No. 
1 printed in part B of House Report 115-595.
  Ms. MAXINE WATERS of California. Mr. Speaker, I have an amendment at 
the desk made in order under the rule.
  The SPEAKER pro tempore. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amend section 2 to read as follows:

     SEC. 2. AMENDMENT TO DEFINITIONS.

       Section 1003 of the Federal Financial Institutions 
     Examination Council Act of 1978 (12 U.S.C. 3302) is amended--
       (1) by redesignating paragraphs (2) and (3) as paragraphs 
     (3) and (4), respectively; and
       (2) by inserting after paragraph (2) the following
       ``(2) the term `community financial institution' means a 
     financial institution with total consolidated assets of 
     $10,000,000,000 or less;''.
       Strike ``financial institution'' each place such term 
     appears and insert ``community financial institution''.
       Page 6, line 5, strike ``financial institutions'' and 
     insert ``community financial institutions''.
       Page 6, line 12, strike ``financial institutions'' and 
     insert ``community financial institutions''.
       Page 8, line 3, strike ``financial institutions'' and 
     insert ``community financial institutions''.
       Page 9, line 14, strike ``financial institution's'' and 
     insert ``community financial institution's''.
       Page 12, beginning on line 4, strike ``financial 
     institutions'' and insert ``community financial 
     institutions''.
       Page 12, line 6, strike ``financial institutions'' and 
     insert ``community financial institutions''.
       Page 15, beginning on line 21, strike ``-- (A)''.
       Page 16, line 2, insert a period and a quotation mark 
     before the semicolon.
       Page 16, strike lines 3 through 5.

  The SPEAKER pro tempore. Pursuant to House Resolution 773, the 
gentlewoman from California (Ms. Maxine Waters) and a Member opposed 
each will control 5 minutes.
  The Chair recognizes the gentlewoman from California.
  Ms. MAXINE WATERS of California. Mr. Speaker, my amendment is fairly 
straightforward. It would limit the applicability of the exam reforms 
under H.R. 4545 to only depository institutions with assets less than 
$10 billion.
  I have only heard about community banks and credit unions with 
respect to concerns regarding their exam process and the ability to 
enhance the opportunity to appeal exam findings. As Ms. Maloney made 
clear, when the committee marked up this bill, the sole purpose of the 
bill was to help community banks and credit unions, so my amendment 
seeks to narrow the scope of the bill's relief to these small firms.
  Congress used a similar $10 billion asset threshold in Dodd-Frank to 
exempt small banks and credit unions from the Consumer Bureau's 
supervision, so applying a similar threshold for the purpose of 
appealing bank supervisory findings makes sense.
  Today, 98 percent of all banks and 99.8 percent of all credit unions 
have less than $10 billion in assets. While I am in favor of sensible 
relief for smaller financial institutions, I believe that the 2007-2009 
financial crisis showed the dangers of weak oversight of these big 
banks, including a $30 billion bank like IndyMac. The bank's costly 
failure was the fourth largest in the history of the United States and 
contributed to the most damaging financial crisis in generations.
  As the largest firms pose the greatest risk to the country's economy 
and the safety and soundness of our financial system, it is only 
prudent to apply a stringent supervisory approach for the largest 
institutions. In fact, the GAO issued a report last year criticizing 
the

[[Page H1634]]

Federal Reserve's large bank supervision program, underscoring there is 
more work that must be done.
  I have been pushing bank regulators to deploy the full suite of their 
enforcement tools against megabanks like Wells Fargo that repeatedly 
and carelessly break the law and harm millions of consumers. That is 
why I introduced, again, H.R. 3937, the Megabank Accountability and 
Consequences Act.
  So, no, I do not think it is appropriate to let megabanks like Wells 
Fargo hijack what should be regulatory relief for community banks so 
that they can challenge their exams. Nonbanks regulated by the Consumer 
Bureau, like Equifax or payday lenders, do not need this kind of 
regulatory relief either.
  My amendment narrows the scope of the bill on what should garner 
broad bipartisan support: sensible relief for the community banks and 
credit unions that need it.
  Mr. Speaker, I would urge my colleagues who truly want to help 
community banks and credit unions rather than Wall Street megabanks to 
support my amendment.
  Mr. Speaker, I yield back the balance of my time.
  Mr. HENSARLING. Mr. Speaker, I rise in opposition to the amendment.
  The SPEAKER pro tempore. The gentleman from Texas is recognized for 5 
minutes.
  Mr. HENSARLING. Mr. Speaker, again, what we are talking about here is 
fundamental due process: due process for every American, due process 
for every institution regardless of its size, regardless of its 
geography. This is about due process.
  As Justice Oliver Wendell Holmes wrote: ``Whatever disagreement there 
may be as to the scope of the phrase `due process of law,' there can be 
no doubt that it embraces the fundamental conception of a fair trial, 
with opportunity to be heard.'' He is one of the most famous jurists in 
all of American history.
  We are trying to ensure, again, that a bank examiner or a credit 
union examiner is not tantamount to judge, jury, prosecutor, cop on the 
beat, and executioner all rolled into one. There is no due process if 
your only practical appeal is to the person who rendered the judgment 
in the first place.
  So, number one, it is important that all Americans, all institutions 
receive due process, which is perhaps why even over half of the 
Democrats on the Financial Services Committee chose to support H.R. 
4545.
  The ranking member's amendment would set a threshold here, but her 
threshold, as she talks about these so-called megabanks, at $10 
billion, that is one-half of 1 percent of the size of J.P. Morgan.
  So, Mr. Speaker, I don't believe in too-big-to-fail banks. I know my 
friends on the other side of the aisle do. That is why they voted for 
the bailout fund to support these too-big-to-fail financial 
institutions with taxpayer funds.
  I don't believe in too-big-to-fail institutions, but if I did, Mr. 
Speaker, if I did, it would be limited to maybe eight or nine banks in 
America. It certainly wouldn't be applicable to any community bank, 
credit union, or regional bank.
  We have to remember, regardless of the size of the bank, it is their 
capital that is helping to capitalize our businesses.

                              {time}  1415

  I am from Dallas, Texas. One of our major employers is American 
Airlines. I wish they could do business with First State Bank of 
Athens, but I suspect they do not. And so sometimes, yes, global banks 
are necessary to our economy, regional banks are necessary to our 
economy, community banks and credit unions are necessary to our 
economy. They are suffering under the sheer weight, load, volume, 
complexity, and expense of the regulatory burden, which the examination 
process is part of it.
  Let's give them due process. Let's give them fairness and ensure that 
credit can flow to every small business, every household that is worthy 
in America. Let's reject the ranking member's amendment, and let's 
support the underlying bill, H.R. 4545.
  Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore (Mr. Rodney Davis of Illinois). Pursuant to 
the rule, the previous question is ordered on the bill, as amended, and 
on the amendment offered by the gentlewoman from California (Ms. Maxine 
Waters).
  The question is on the amendment offered by the gentlewoman from 
California (Ms. Maxine Waters).
  The question was taken; and the Speaker pro tempore announced that 
the noes appeared to have it.
  Ms. MAXINE WATERS of California. Mr. Speaker, on that I demand the 
yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further 
proceedings on this question will be postponed.

                          ____________________