[House Report 114-874]
[From the U.S. Government Publishing Office]


114th Congress     }                                           {  Report
                        HOUSE OF REPRESENTATIVES
 2d Session        }                                           {  114-874

======================================================================



 
       FINANCIAL INSTITUTIONS EXAMINATION FAIRNESS AND REFORM ACT

                                _______
                                

 December 12, 2016.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

       Mr. Hensarling, from the Committee on Financial Services, 
                        submitted the following

                              R E P O R T

                        [To accompany H.R. 1941]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Financial Services, to whom was referred 
the bill (H.R. 1941) to improve the examination of depository 
institutions, and for other purposes, having considered the 
same, report favorably thereon without amendment and recommend 
that the bill do pass.

                          Purpose and Summary

    H.R. 1941 amends the Federal Financial Institutions 
Examination Council Act of 1978 to establish deadlines within 
which regulatory agencies must hold exit interviews and issue 
final examination reports to financial institutions. The bill 
would also provide supervised financial institutions the right 
to have material supervisory determinations reviewed by a newly 
created Independent Examination Review Director within the 
Federal Financial Institutions Examination Council (FFIEC).

                  Background and Need for Legislation

    Section 309 of the Riegle Community Development and 
Regulatory Improvement Act of 1994 directed the federal 
regulators of financial institutions to establish an 
``independent intra-agency appellate process'' by which an 
institution could seek review of certain regulatory 
determinations, including (1) examination ratings, (2) adequacy 
of loan loss reserves, and (3) classifications of loans 
significant to the institution. Collectively, these 
determinations are known as ``material supervisory 
determinations.'' Each federal regulator has instituted its own 
unique process for appeals of material supervisory 
determinations.
    The Committee has heard testimony that the intra-agency 
review for appealing material supervisory determinations 
provides financial institutions with limited opportunities to 
challenge, that the appeals process is not impartial, and that 
appealing or opposing exam findings incurs retaliation from 
regulators.
    In testimony before the committee on June 11, 2015, 
Mercatus Center Senior Research Fellow Hester Peirce stated:

          A robust, objective process for raising concerns 
        about low-quality exams is one way to increase exam 
        quality. H.R. 1941 would establish a new interagency 
        mechanism for examination oversight, including a new 
        appeals process.

An intra-agency appeals process already exists at some 
financial regulators, but examination concerns remain. In the 
words of University of Alabama School of Law professor Julie 
Hill, who extensively researched the appeals processes of four 
financial regulators, the appeals process is ``a dysfunctional 
and seldom used system.'' The existing appeals mechanisms do 
not provide an effective check on bank examiners. As Professor 
Hill notes, both financial institutions and regulators have an 
interest in a good examination process:

          ``Pursuing unnecessary enforcement actions diverts 
        regulatory attention from pressing problems. If a 
        financial institution expends significant time and 
        effort addressing an erroneous determination, it may 
        prevent the institution from addressing other important 
        matters. Moreover, allowing erroneous [Material 
        Supervisory Determinations] to persist undermines the 
        credibility of the supervisory process.''

Professor Hill's finding that appeals are rare is consistent 
with the strong incentives for financial institutions to defer 
to the regulators that exercise continuing power over their 
businesses. Even with anti-retaliation measures in place, it is 
very difficult to second-guess a regulator. Financial 
institutions would be more likely to avail themselves of an 
external, third-party appeals process such as the one set forth 
in H.R. 1941. Clarifying the interaction between the intra-
agency and interagency appeals process would help to ensure 
that the new process has its desired effect.

                                Hearings

    The Committee on Financial Services' Subcommittee on 
Financial Institutions held a hearing examining matters 
relating to H.R. 1941 on June 11, 2015.

                        Committee Consideration

    The Committee on Financial Services met in open session on 
July 28, 2015 and July 29, 2015 and considered the bill. An 
amendment offered by Ms. Maloney was withdrawn. The Committee 
ordered H.R. 1941 to be reported favorably to the House without 
amendment by a recorded vote of 45 yeas to 13 nays (recorded 
vote no. FC-46), a quorum being present.

                            Committee Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the record votes 
on the motion to report legislation and amendments thereto. The 
sole recorded vote was on a motion by Chairman Hensarling to 
report the bill favorably to the House without amendment. The 
motion was agreed to by a recorded vote of 45 yeas to 13 nays 
(Record vote no. FC-46), a quorum being present.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                      Committee Oversight Findings

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the findings and recommendations of 
the Committee based on oversight activities under clause 
2(b)(1) of rule X of the Rules of the House of Representatives, 
are incorporated in the descriptive portions of this report.

                    Performance Goals and Objectives

    Pursuant to clause 3(c)(4) of rule XIII of the Rules of the 
House of Representatives, the Committee states that H.R. 1941 
will reduce regulatory burden and increase agency 
accountability by, among other things, establishing stricter 
deadlines and examination standards for agencies issuing final 
examination reports.

   New Budget Authority, Entitlement Authority, and Tax Expenditures

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee adopts as its 
own the estimate of new budget authority, entitlement 
authority, or tax expenditures or revenues contained in the 
cost estimate prepared by the Director of the Congressional 
Budget Office pursuant to section 402 of the Congressional 
Budget Act of 1974.

                        Committee Cost Estimate

    The Committee adopts as its own the cost estimate prepared 
by the Director of the Congressional Budget Office pursuant to 
section 402 of the Congressional Budget Act of 1974.

                 Congressional Budget Office Estimates

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate 
provided by the Congressional Budget Office pursuant to section 
402 of the Congressional Budget Act of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                 Washington, DC, February 11, 2016.
Hon. Jeb Hensarling,
Chairman, Committee on Financial Services,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 1941, the 
Financial Institutions Examination Fairness and Reform Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Kim Cawley 
and Sarah Puro.
            Sincerely,
                                                        Keith Hall.
    Enclosure.

H.R. 1941--Financial Institutions Examination Fairness and Reform Act

    Summary: H.R. 1941 would establish the Office of 
Independent Examination Review within the Federal Financial 
Institutions Examination Council (FFIEC). The council would 
investigate complaints from financial institutions about 
examinations, conduct regular reviews of the quality of 
examinations, and adjudicate appeals of determinations made as 
part of an examination. The bill also would prohibit financial 
regulators from classifying certain commercial loans as non-
performing and from requiring certain banks to raise more 
capital to cover the potential losses from those loans.
    CBO estimates that enacting H.R. 1941 would increase net 
direct spending by $192 million and reduce revenues by $40 
million over the 2016-2026 period; therefore, pay-as-you-go 
procedures apply. In total, CBO estimates that enacting H.R. 
1941 would increase budget deficits by $232 million over the 
2016-2026 period. Implementing H.R. 1941 would not affect 
spending subject to appropriation.
    CBO estimates that enacting the legislation would not 
increase net direct spending or on-budget deficits by more than 
$5 billion in any of the four consecutive 10-year periods 
beginning in 2027.
    H.R. 1941 contains no intergovernmental mandates as defined 
in the Unfunded Mandates Reform Act (UMRA).
    H.R. 1941 could increase the cost of an existing mandate on 
private entities required to pay fees. Based on information 
from the affected agencies, CBO estimates that the incremental 
cost of the mandate would fall well below the annual threshold 
for private-sector mandates established in UMRA ($154 million 
in 2016, adjusted annually for inflation).
    Estimated cost to the Federal Government: The estimated 
budgetary effects of H.R. 1941 are shown in the following 
table. The costs of this legislation fall within budget 
function 370 (commerce and housing credit).

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                    By fiscal year, in millions of dollars--
                                                      --------------------------------------------------------------------------------------------------
                                                        2016   2017   2018   2019   2020   2021   2022   2023   2024   2025   2026  2016-2021  2016-2026
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               CHANGES IN DIRECT SPENDING
 
Office Of Independent Examination Review:
    Estimated Budget Authority.......................      0      4     10     11      9      9      9     10     10     10     10        43         92
    1Estimated Outlays...............................      0      4     10     11      9      9      9     10     10     10     10        43         92
Other Administrative Costs:
    Estimated Budget Authority.......................      0      1      1      1      1      1      1      1      1      1      1         5         10
    Estimated Outlays................................      0      1      1      1      1      1      1      1      1      1      1         5         10
Prohibitions on Regulatory Actions:
    Estimated Budget Authority.......................      0      2      5      8      9     10     10     11     11     12     12        34         90
    Estimated Outlays................................      0      2      5      8      9     10     10     11     11     12     12        34         90
    Total Changes:
        Estimated Budget Authority...................      0      7     16     20     19     20     20     22     22     23     23        82        192
        Estimated Outlays............................      0      7     16     20     19     20     20     22     22     23     23        82        192
 
                                                                 CHANGES IN REVENUES\a\
 
Estimated Revenues...................................      0     -1     -3     -4     -4     -4     -4     -5     -5     -5     -5       -16        -40
 
                                                                NET INCREASE IN DEFICITS
 
Increase in Deficits.................................      0      8     19     24     23     24     24     27     27     28     28        98        232
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\Negative numbers denote decreases in revenues.

    Basis of estimate: For this estimate, CBO assumes that the 
bill will be enacted near the end of fiscal year 2016 and that 
spending will follow historical patterns for similar regulatory 
activities.
    H.R. 1941 would establish a new office, the Office of 
Independent Examination Review, at FFIEC to investigate 
complaints from financial institutions related to examinations, 
to review examination standards to ensure consistency across 
the agencies, to adjudicate appeals of determinations made as 
part of an examination, and to conduct a continuing program of 
quality control and assurance.
    FFIEC was established to promote uniformity in supervision 
of financial institutions; generally, its operating costs are 
borne by four financial regulatory agencies--the Office of the 
Comptroller of the Currency (OCC), the Federal Deposit 
Insurance Corporation (FDIC), the National Credit Union 
Administration (NCUA), and the Federal Reserve System. Under 
H.R. 1941, a portion of the costs of the office also would be 
covered by the Consumer Financial Protection Bureau (CFPB).
    Three of those regulators--the OCC, the FDIC, and the 
NCUA--collect fees to offset operating costs. Because of lags 
between the time costs are incurred by some of the financial 
regulators and when additional fees would be imposed, not all 
additional costs resulting from the bill could be recovered 
within the next 10 years. Costs borne by the CFPB are recorded 
in the budget as direct spending because the agency has 
permanent authority to spend amounts transferred from the 
Federal Reserve System. Finally, costs incurred by the Federal 
Reserve System to implement the bill would reduce remittances 
to the Treasury (which are recorded as revenues) and would 
therefore affect the federal budget by reducing revenues.
    Currently, the FFIEC is supported by 15 staff who are 
employed by the regulatory agencies but assigned to the 
council.

Direct spending

    Office of Independent Examination Review. CBO expects that 
establishing the Office of Independent Examination Review would 
require a significant increase in the council's staff. Based on 
information from FFIEC, CBO estimates that an additional 50 
staff positions would be needed to meet the bill's requirements 
to investigate and resolve appeals and to review examination 
procedures. CBO expects that it would take several years to 
reach that new staffing level and that the costs would be 
spread evenly among the five regulatory agencies.
    Based on information from the affected agencies, CBO 
estimates that establishing the office would cost $202 million 
over the 2016-2026 period to supply the FFIEC with additional 
staff and to cover other operating expenses. That amount 
reflects some savings to the regulators because a portion of 
the complaints they receive under current law would be handled 
by FFIEC under the bill. We expect that 80 percent of the net 
cost, or $162 million, would be spread equally among four 
financial regulators--the FDIC, OCC, NCUA and CFPB--increasing 
gross direct spending by that amount.
    As noted above, three of those regulators collect fees to 
offset operating costs, but because there is a lag in the 
timing of collections, not all costs would be offset over the 
2016-2026 period. CBO estimates that over the ten-year period 
additional fees collected from financial institutions would 
total about $70 million. On net, CBO estimates that enacting 
H.R. 1941 would increase direct spending by $92 million over 
the 2016-2026 period.
    The remaining 20 percent would be charged to the Federal 
Reserve System; those effects are discussed below under the 
heading ``Revenues.''
    Other Administrative Costs. The bill also would establish 
deadlines for the federal banking regulators to complete 
examination reports. Based on information from those agencies, 
CBO estimates that they would need to hire additional staff to 
meet the deadlines established in the bill, at an estimated net 
cost of about $10 million over the 2016-2026 period.
    Prohibitions on Regulatory Action. The bill would prohibit 
financial regulators from classifying certain commercial loans 
as nonperforming and from requiring certain banks to raise more 
capital to cover the potential losses that could stem from 
those loans. CBO expects that those prohibitions would 
primarily affect loans for commercial real estate. For 
institutions with limited or moderate exposure to such loans 
that otherwise have diversified loan portfolios, such 
limitations would be unlikely to result in a bank failure where 
the federal government incurs any costs. However, some banks 
with holdings that are primarily concentrated in the commercial 
real estate sector could experience a reduction in their 
capital reserves, which would lead to a higher probability of a 
bank failure and would increase the probability of additional 
federal costs to resolve the liabilities of failed 
institutions.
    Based on a review of information contained in bank reports 
and on criteria established by federal financial regulations, 
CBO estimates about 450 federally insured financial 
institutions have portfolios that are concentrated in 
commercial real estate. The assets of those banks account for 
about 40 percent of all bank assets. Any significant downturn 
in the commercial real estate market could cause instability 
and losses for the portfolios of those institutions. CBO's 
baseline for deposit insurance programs includes the 
probability that some banks will fail in any given year. 
Although the likelihood of deterioration in the market for 
commercial real estate is uncertain, the prohibitions in H.R. 
1941 on regulation of commercial real estate loans would 
probably lead to a small increase in the number of banks that 
fail and require resolution through the FDIC's Deposit 
Insurance Fund (DIF).
    Based on the historical components of bank failures, CBO 
estimates that there would be about a 10 percent increase in 
failures for banks with portfolios that hold significant 
amounts of commercial real estate. Using CBO's baseline 
projections of losses from the DIF, we estimate that a 10 
percent increase in the rate of failure for those banks would 
cost about $90 million over the 2016-2026 period.

Revenues

    The Federal Reserve System remits its profits to the 
Treasury, and those payments are recorded as revenues in the 
federal budget. Increasing the costs of operating the Federal 
Reserve System reduces federal revenues. CBO estimates that the 
portion of the costs to establish the Office of Independent 
Examination Review that would be allocated to the Federal 
Reserve would average about $4 million per year; over the 2016-
2026 period, revenues would decline by $40 million.
    Pay-As-You-Go Considerations: The Statutory Pay-As-You-Go 
Act of 2010 establishes budget-reporting and enforcement 
procedures for legislation affecting direct spending or 
revenues. The net changes in outlays and revenues that are 
subject to those pay-as-you-go procedures are shown in the 
following table.

         CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR H.R. 1941, AS ORDERED REPORTED BY THE HOUSE COMMITTEE ON FINANCIAL SERVICES ON JULY 29, 2015
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                    By fiscal year, in millions of dollars--
                                                      --------------------------------------------------------------------------------------------------
                                                        2016   2017   2018   2019   2020   2021   2022   2023   2024   2025   2026  2016-2021  2016-2026
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               NET INCREASE IN THE DEFICIT
 
Statutory Pay-As-You-Go Impact.......................      0      8     19     24     23     24     24     27     27     28     28        98        232
Memorandum:
Changes in Outlays...................................      0      7     16     20     19     20     20     22     22     23     23        82        192
Changes in Revenues\a\...............................      0     -1     -3     -4     -4     -4     -4     -5     -5     -5     -5       -16        -40
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\Negative numbers denote decreases in revenues.

    Increase in long-term direct spending: CBO estimates that 
enacting the legislation would not increase net direct spending 
or on-budget deficits by more than $5 billion in any of the 
four consecutive 10-year periods beginning in 2027.
    Estimated impact on state, local, and tribal governments: 
H.R. 1941 contains no intergovernmental mandates as defined in 
UMRA and would impose no costs on state, local, or tribal 
governments.
    Estimated impact on the private sector: If financial 
regulators increase fees to offset some of the costs of 
implementing the new activities of the FFIEC, the bill would 
increase the cost of an existing mandate on private entities 
required to pay those fees. Based on information from the 
affected agencies, CBO estimates that the incremental cost of 
the mandate would amount to no more than about $25 million over 
the 2016-2021 period and would fall well below the annual 
threshold for private-sector mandates established in UMRA ($154 
million in 2016, adjusted annually for inflation).
    Previous CBO cost estimate: On July 29, 2015, CBO 
transmitted a cost estimate for S. 1484, the Financial 
Regulatory Improvement Act of 2015, as ordered reported by the 
Senate Committee on Banking, Housing, and Urban Affairs on June 
2, 2015. Section 104 of S. 1484 would establish the Office of 
Independent Examination Review. H.R. 1941 contains a provision 
that would direct the office to adjudicate appeals of 
determinations made as part of an examination; that provision 
is not included in Section 104 of S. 1484. CBO's estimate of 
the cost to establish the office in each bill reflects that 
difference.
    Estimate prepared by: Federal costs: Kim Cawley and Sarah 
Puro; Impact on state, local, and tribal governments: J'nell 
Blanco Suchy; Impact on the private sector: Logan Smith.
    Estimate approved by: H. Samuel Papenfuss, Deputy Assistant 
Director for Budget Analysis.

                       Federal Mandates Statement

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates reform 
Act.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                  Applicability to Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of the section 
102(b)(3) of the Congressional Accountability Act.

                         Earmark Identification

    H.R. 1941 does not contain any congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined in 
clause 9 of rule XXI.

                    Duplication of Federal Programs

    Pursuant to section 3(g) of H. Res. 5, 114th Cong. (2015), 
the Committee states that no provision of H.R. 1941 establishes 
or reauthorizes a program of the Federal Government known to be 
duplicative of another Federal program, a program that was 
included in any report from the Government Accountability 
Office to Congress pursuant to section 21 of Public Law 111-
139, or a program related to a program identified in the most 
recent Catalog of Federal Domestic Assistance.

                   Disclosure of Directed Rulemaking

    Pursuant to section 3(i) of H. Res. 5, 114th Cong. (2015), 
the Committee states that H.R. 1941 contains no directed 
rulemaking.

             Section-by-Section Analysis of the Legislation


Section 1. Short title

    This Section cites H.R. 141 as the ``Financial Institutions 
Examination Fairness and Reform Act''.

Section 2. Timeliness of examination reports

    This section amends the Federal Financial Institutions 
Examination Council Act of 1978 to require a federal financial 
institutions regulatory agency to make a final examination 
report to a financial institution within 60 days after the 
later of: (1) the exit interview for an examination of the 
institution, or (2) the provision of additional information by 
the institution relating to the examination.

Section 3. Examination standards

    The section prescribes examination standards for financial 
institutions that: prescribe requirements and prohibitions for 
the treatment of certain commercial loans, prohibit a federal 
financial institution regulatory agency from requiring a well-
capitalized financial institution to raise additional capital 
in lieu of certain actions prohibited with respect to such 
commercial loans, and require federal financial institutions 
regulatory agencies to develop and apply identical definitions 
and reporting requirements for non-accrual loans.

Section 4. Independent Examination Review Director

    This section establishes in the Federal Financial 
Institutions Examination Council (FFIEC) the Office of 
Independent Examination Review, headed by a Director appointed 
by the FFIEC, but independent from any member agency of the 
FFIEC.

Section 5. Right to independent review of material supervisory 
        determinations

    This section entitles a financial institution to appeal a 
material supervisory determination contained in a final report 
of examination; requires the Director to determine the merits 
of the appeal and grants a financial institution the right to 
petition for judicial review of the Director's decision. 
Lastly, this section prohibits a federal financial institutions 
regulatory agency from retaliating against a financial 
institution or delaying or denying any agency action that would 
be benefit a financial institution.

Section 6. Additional amendments

    This section amends the Riegle Community Development and 
Regulatory Improvement Act of 1994 to require the Consumer 
Financial Protection Bureau to establish an independent intra-
agency appellate process in connection with the regulatory 
appeals process, and safeguards to protect an insure depository 
institution or insured credit union from retaliation by any 
federal banking agency for exercising its rights.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, and existing law in which no 
change is proposed is shown in roman):

FEDERAL FINANCIAL INSTITUTIONS EXAMINATION COUNCIL ACT OF 1978

           *       *       *       *       *       *       *



TITLE X--FEDERAL FINANCIAL INSTITUTIONS EXAMINATION COUNCIL

           *       *       *       *       *       *       *



                              definitions

  Sec. 1003. As used in this title--
          [(1) the term ``Federal financial institutions 
        regulatory agencies'' means the Office of the 
        Comptroller of the Currency, the Board of Governors of 
        the Federal Reserve System, the Federal Deposit 
        Insurance Corporation, the Office of Thrift 
        Supervision, and the National Credit Union 
        Administration;]
          (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, 
                1014, and 1015, includes the Bureau of Consumer 
                Financial Protection;
          (2) the term ``Council'' means the Financial 
        Institutions Examination Council; and
          (3) the term ``financial institution'' 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;

           *       *       *       *       *       *       *


                        expenses of the council

  Sec. 1005. [One-fifth] One-fourth of the costs and expenses 
of the Council, including the salaries of its employees, shall 
be paid by each of the Federal financial institutions 
regulatory agencies. Annual assessments for such share shall be 
levied by the Council based upon its projected budget for the 
year, and additional assessments may be made during the year if 
necessary.

           *       *       *       *       *       *       *


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. 1013. EXAMINATION STANDARDS.

  (a) In General.--In the examination of a financial 
institution--
          (1) a commercial loan shall not be placed in non-
        accrual status solely because the collateral for such 
        loan has deteriorated in value;
          (2) a modified or restructured commercial loan shall 
        be removed from non-accrual status if the borrower 
        demonstrates the ability to perform on such loan over a 
        maximum period of 6 months, except that with respect to 
        loans on a quarterly, semiannual, or longer repayment 
        schedule such period shall be a maximum of 3 
        consecutive repayment periods;
          (3) a new appraisal on a performing commercial loan 
        shall not be required unless an advance of new funds is 
        involved; and
          (4) in classifying a commercial loan in which there 
        has been deterioration in collateral value, the amount 
        to be classified shall be the portion of the deficiency 
        relating to the decline in collateral value and 
        repayment capacity of the borrower.
  (b) Well Capitalized Institutions.--The Federal financial 
institutions regulatory agencies may not require a financial 
institution that is well capitalized to raise additional 
capital in lieu of an action prohibited under subsection (a).
  (c) Consistent Loan Classifications.--The Federal financial 
institutions regulatory agencies shall develop and apply 
identical definitions and reporting requirements for non-
accrual loans.

SEC. 1014. 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) Staffing.--The Director is authorized to hire staff to 
support the activities of the Office.
  (d) 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) 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 1015; 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.
  (e) Confidentiality.--The Director shall keep confidential 
all meetings with, discussions with, and information provided 
by financial institutions.

SEC. 1015. 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) be deemed 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) 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 in the United States Court of 
Appeals for the District of Columbia Circuit or the Circuit in 
which the financial institution is located.
  (f) 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.
  (g) 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.
  (h) 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.
                              ----------                              


RIEGLE COMMUNITY DEVELOPMENT AND REGULATORY IMPROVEMENT ACT OF 1994

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TITLE III--PAPERWORK REDUCTION AND REGULATORY IMPROVEMENT

           *       *       *       *       *       *       *


SEC. 309. REGULATORY APPEALS PROCESS, OMBUDSMAN, AND ALTERNATIVE 
                    DISPUTE RESOLUTION.

  (a) In General.--Not later than 180 days after the date of 
enactment of this Act, each appropriate Federal banking agency, 
the Bureau of Consumer Financial Protection, and the National 
Credit Union Administration Board shall establish an 
independent intra-agency appellate process. The process shall 
be available to review material supervisory determinations made 
at insured depository institutions or at insured credit unions 
that the agency supervises.
  (b) Review Process.--In establishing the independent 
appellate process under subsection (a), each agency shall 
ensure that--
          (1) any appeal of a material supervisory 
        determination by an insured depository institution or 
        insured credit union is heard and decided 
        expeditiously; and
          (2) appropriate safeguards exist for protecting [the 
        appellant from retaliation by agency examiners] the 
        insured depository institution or insured credit union 
        from retaliation by the agencies referred to in 
        subsection (a) .
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.
  (c) Comment Period.--Not later than 90 days after the date of 
enactment of this Act, each appropriate Federal banking agency 
and the National Credit Union Administration Board shall 
provide public notice and opportunity for comment on proposed 
guidelines for the establishment of an appellate process under 
this section.
  (d) Agency Ombudsman.--
          (1) Establishment required.-- Not later than 180 days 
        after the date of enactment of this Act, each Federal 
        banking agency and the National Credit Union 
        Administration Board shall appoint an ombudsman.
          (2) Duties of ombudsman.-- The ombudsman appointed in 
        accordance with paragraph (1) for any agency shall--
                  (A) act as a liaison between the agency and 
                any affected person with respect to any problem 
                such party may have in dealing with the agency 
                resulting from the regulatory activities of the 
                agency; and
                  (B) assure that safeguards exist to encourage 
                complainants to come forward and preserve 
                confidentiality.
  (e) Alternative Dispute Resolution Pilot Program.--
          (1) In general.-- Not later than 18 months after the 
        date of enactment of this Act, each Federal banking 
        agency and the National Credit Union Administration 
        Board shall develop and implement a pilot program for 
        using alternative means of dispute resolution of issues 
        in controversy (hereafter in this section referred to 
        as the ``alternative dispute resolution program'') that 
        is consistent with the requirements of subchapter IV of 
        chapter 5 of title 5, United States Code, if the 
        parties to the dispute, including the agency, agree to 
        such proceeding.
          (2) Standards.-- An alternative dispute resolution 
        pilot program developed under paragraph (1) shall--
                  (A) be fair to all interested parties to a 
                dispute;
                  (B) resolve disputes expeditiously; [and]
                  (C) be less costly than traditional means of 
                dispute resolution, including litigation[.]; 
                and
                  (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.
          (3) Independent evaluation.-- Not later than 18 
        months after the date on which a pilot program is 
        implemented under paragraph (1), the Administrative 
        Conference of the United States shall submit to the 
        Congress a report containing--
                  (A) an evaluation of that pilot program;
                  (B) the extent to which the pilot programs 
                meet the standards established under paragraph 
                (2);
                  (C) the extent to which parties to disputes 
                were offered alternative means of dispute 
                resolution and the frequency with which the 
                parties, including the agencies, accepted or 
                declined to use such means; and
                  (D) any recommendations of the Conference to 
                improve the alternative dispute resolution 
                procedures of the Federal banking agencies and 
                the National Credit Union Administration Board.
          (4) Implementation of program.-- At any time after 
        completion of the evaluation under paragraph (3)(A), 
        any Federal banking agency and the National Credit 
        Union Administration Board may implement an alternative 
        dispute resolution program throughout the agency, 
        taking into account the results of that evaluation.
          (5) Coordination with existing agency adr programs.--
                  (A) Evaluation required.-- If any Federal 
                banking agency or the National Credit Union 
                Administration maintains an alternative dispute 
                resolution program as of the date of enactment 
                of this Act under any other provision of law, 
                the Administrative Conference of the United 
                States shall include such program in the 
                evaluation conducted under paragraph (3)(A).
                  (B) Multiple adr programs.-- No provision of 
                this section shall be construed as precluding 
                any Federal banking agency or the National 
                Credit Union Administration Board from 
                establishing more than 1 alternative means of 
                dispute resolution.
  (f) Definitions.--For purposes of this section, the following 
definitions shall apply:
          (1) Material supervisory determinations.-- The term 
        ``material supervisory determinations''--
                  (A) includes determinations relating to--
                          (i) examination ratings;
                          (ii) the adequacy of loan loss 
                        reserve provisions; [and]
                          (iii) loan classifications on loans 
                        that are significant to an institution; 
                        [and]
                          (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) does not include a determination by a 
                Federal banking agency or the National Credit 
                Union Administration Board to appoint a 
                conservator or receiver for an insured 
                depository institution or a liquidating agent 
                for an insured credit union, as the case may 
                be, or a decision to take action pursuant to 
                section 38 of the Federal Deposit Insurance Act 
                or section 212 of the Federal Credit Union Act, 
                as appropriate.
          (2) Independent appellate process.-- The term 
        ``independent appellate process'' means a review by an 
        agency official who does not directly or indirectly 
        report to the agency official who made the material 
        supervisory determination under review.
          (3) Alternative means of dispute resolution.-- The 
        term ``alternative means of dispute resolution'' has 
        the meaning given to such term in section 571 of title 
        5, United States Code.
          (4) Issues in controversy.-- The term ``issues in 
        controversy'' means--
                  (A) any final agency decision involving any 
                claim against an insured depository institution 
                or insured credit union for which the agency 
                has been appointed conservator or receiver or 
                for which a liquidating agent has been 
                appointed, as the case may be;
                  (B) any final action taken by an agency in 
                the agency's capacity as conservator or 
                receiver for an insured depository institution 
                or by the liquidating agent appointed for an 
                insured credit union; and
                  (C) any other issue for which the appropriate 
                Federal banking agency or the National Credit 
                Union Administration Board determines that 
                alternative means of dispute resolution would 
                be appropriate.
  (g) Effect on Other Authority.--Nothing in this section shall 
affect the authority of an appropriate Federal banking agency 
or the National Credit Union Administration Board to take 
enforcement or supervisory action.

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                              ----------                              


FEDERAL CREDIT UNION ACT

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TITLE II--SHARE INSURANCE

           *       *       *       *       *       *       *


              requirements governing insured credit unions

  Sec. 205. (a) Insurance Logo.--
          (1) Insured credit unions.--
                  (A) In general.-- Each insured credit union 
                shall display at each place of business 
                maintained by that credit union a sign or signs 
                relating to the insurance of the share accounts 
                of the institution, in accordance with 
                regulations to be prescribed by the Board.
                  (B) Statement to be included.-- Each sign 
                required under subparagraph (A) shall include a 
                statement that insured share accounts are 
                backed by the full faith and credit of the 
                United States Government.
          (2) Regulations.-- The Board shall prescribe 
        regulations to carry out this subsection, including 
        regulations governing the substance of signs required 
        by paragraph (1) and the manner of display or use of 
        such signs.
          (3) Penalties.-- For each day that an insured credit 
        union continues to violate this subsection or any 
        regulation issued under this subsection, it shall be 
        subject to a penalty of not more than $100, which the 
        Board may recover for its use.
  (b)(1) Except as provided in paragraph (2), no insured credit 
union shall, without the prior approval of the Board--
          (A) merge or consolidate with any noninsured credit 
        union or institution;
          (B) assume liability to pay any member accounts in, 
        or similar liabilities of, any noninsured credit union 
        or institution;
          (C) transfer assets to any noninsured credit union or 
        institution in consideration of the assumption of 
        liabilities for any portion of the member accounts in 
        such insured credit union; or
          (D) convert into a noninsured credit union or 
        institution.
          (2) Conversion of insured credit unions to mutual 
        savings banks.--
                  (A) In general.-- Notwithstanding paragraph 
                (1), an insured credit union may convert to a 
                mutual savings bank or savings association (if 
                the savings association is in mutual form), as 
                those terms are defined in section 3 of the 
                Federal Deposit Insurance Act, without the 
                prior approval of the Board, subject to the 
                requirements and procedures set forth in the 
                laws and regulations governing mutual savings 
                banks and savings associations.
                  (B) Conversion proposal.-- A proposal for a 
                conversion described in subparagraph (A) shall 
                first be approved, and a date set for a vote 
                thereon by the members (either at a meeting to 
                be held on that date or by written ballot to be 
                filed on or before that date), by a majority of 
                the directors of the insured credit union. 
                Approval of the proposal for conversion shall 
                be by the affirmative vote of a majority of the 
                members of the insured credit union who vote on 
                the proposal.
                  (C) Notice of proposal to members.-- An 
                insured credit union that proposes to convert 
                to a mutual savings bank or savings association 
                under subparagraph (A) shall submit notice to 
                each of its members who is eligible to vote on 
                the matter of its intent to convert--
                          (i) 90 days before the date of the 
                        member vote on the conversion;
                          (ii) 60 days before the date of the 
                        member vote on the conversion; and
                          (iii) 30 days before the date of the 
                        member vote on the conversion.
                  (D) Notice of proposal to board.-- The Board 
                may require an insured credit union that 
                proposes to convert to a mutual savings bank or 
                savings association under subparagraph (A) to 
                submit a notice to the Board of its intent to 
                convert during the 90-day period preceding the 
                date of the completion of the conversion.
                  (E) Inapplicability of act upon conversion.-- 
                Upon completion of a conversion described in 
                subparagraph (A), the credit union shall no 
                longer be subject to any of the provisions of 
                this Act.
                  (F) Limit on compensation of officials.--
                          (i) In general.-- No director or 
                        senior management official of an 
                        insured credit union may receive any 
                        economic benefit in connection with a 
                        conversion of the credit union as 
                        described in subparagraph (A), other 
                        than--
                                  (I) director fees; and
                                  (II) compensation and other 
                                benefits paid to directors or 
                                senior management officials of 
                                the converted institution in 
                                the ordinary course of 
                                business.
                          (ii) Senior management official.-- 
                        For purposes of this subparagraph, the 
                        term ``senior management official'' 
                        means a chief executive officer, an 
                        assistant chief executive officer, a 
                        chief financial officer, and any other 
                        senior executive officer (as defined by 
                        the appropriate Federal banking agency 
                        pursuant to section 32 (f) of the 
                        Federal Deposit Insurance Act).
                  (G) Consistent rules.--
                          (i) In general.-- Not later than 6 
                        months after the date of enactment of 
                        the Credit Union Membership Access Act, 
                        the Administration shall promulgate 
                        final rules applicable to charter 
                        conversions described in this paragraph 
                        that are consistent with rules 
                        promulgated by other financial 
                        regulators, including the Office of the 
                        Comptroller of the Currency. The rules 
                        required by this clause shall provide 
                        that charter conversion by an insured 
                        credit union shall be subject to 
                        regulation that is no more or less 
                        restrictive than that applicable to 
                        charter conversions by other financial 
                        institutions.
                          (ii) Oversight of member vote.-- The 
                        member vote concerning charter 
                        conversion under this paragraph shall 
                        be administered by the Administration, 
                        and shall be verified by the Federal or 
                        State regulatory agency that would have 
                        jurisdiction over the institution after 
                        the conversion. If either the 
                        Administration or that regulatory 
                        agency disapproves of the methods by 
                        which the member vote was taken or 
                        procedures applicable to the member 
                        vote, the member vote shall be taken 
                        again, as directed by the 
                        Administration or the agency.
  (3) Except with the prior written approval of the Board, no 
insured credit union shall merge or consolidate with any other 
insured credit union or, either directly or indirectly, acquire 
the assets of, or assume liability to pay any member accounts 
in, any other insured credit union.
  (c) In granting or withholding approval or consent under 
subsection (b) of this section, the Board shall consider--
          (1) the history, financial condition, and management 
        policies of the credit union;
          (2) the adequacy of the credit union's reserves;
          (3) the economic advisability of the transaction;
          (4) the general character and fitness of the credit 
        union's management;
          (5) the convenience and needs of the members to be 
        served by the credit union; and
          (6) whether the credit union is a cooperative 
        association organized for the purpose of promoting 
        thrift among its members and creating a source of 
        credit for provident or productive purposes.
  (d) Prohibition.--
          (1) In general.-- Except with prior written consent 
        of the Board--
                  (A) any person who has been convicted of any 
                criminal offense involving dishonesty or a 
                breach of trust, or has agreed to enter into a 
                pretrial diversion or similar program in 
                connection with a prosecution for such offense, 
                may not--
                          (i) become, or continue as, an 
                        institution-affiliated party with 
                        respect to any insured credit union; or
                          (ii) otherwise participate, directly 
                        or indirectly, in the conduct of the 
                        affairs of any insured credit union; 
                        and
                  (B) any insured credit union may not permit 
                any person referred to in subparagraph (A) to 
                engage in any conduct or continue any 
                relationship prohibited under such 
                subparagraph.
          (2) Minimum 10-year prohibition period for certain 
        offenses.--
                  (A) In general.-- If the offense referred to 
                in paragraph (1)(A) in connection with any 
                person referred to in such paragraph is--
                          (i) an offense under--
                                  (I) section 215, 656, 657, 
                                1005, 1006, 1007, 1008, 1014, 
                                1032, 1344, 1517, 1956, or 1957 
                                of title 18, United States 
                                Code; or
                                  (II) section 1341 or 1343 of 
                                such title which affects any 
                                financial institution (as 
                                defined in section 20 of such 
                                title); or
                          (ii) the offense of conspiring to 
                        commit any such offense,
                the Board may not consent to any exception to 
                the application of paragraph (1) to such person 
                during the 10-year period beginning on the date 
                the conviction or the agreement of the person 
                becomes final.
                  (B) Exception by order of sentencing court.--
                          (i) In general.-- On motion of the 
                        Board, the court in which the 
                        conviction or the agreement of a person 
                        referred to in subparagraph (A) has 
                        been entered may grant an exception to 
                        the application of paragraph (1) to 
                        such person if granting the exception 
                        is in the interest of justice.
                          (ii) Period for filing.-- A motion 
                        may be filed under clause (i) at any 
                        time during the 10-year period 
                        described in subparagraph (A) with 
                        regard to the person on whose behalf 
                        such motion is made.
          (3) Penalty.-- Whoever knowingly violates paragraph 
        (1) or (2) shall be fined not more than $1,000,000 for 
        each day such prohibition is violated or imprisoned for 
        not more than 5 years, or both.
  (e)(1) The Board shall promulgate rules establishing minimum 
standards with which each insured credit union must comply with 
respect to the installation, maintenance, and operation of 
security devices and procedures, reasonable in cost, to 
discourage robberies, burglaries, and larcenies and to assist 
in the identification and apprehension of persons who commit 
such acts.
  (2) The rules shall establish the time limits within which 
insured credit unions shall comply with the standards and shall 
require the submission of periodic reports with respect to the 
installation, maintenance, and operation of security devices 
and procedures.
  (3) An insured credit union which violates a rule promulgated 
pursuant to this subsection shall be subject to a civil penalty 
which shall not exceed $100 for each day of the violation.
  (f)(1) Every insured credit union is authorized to maintain, 
and make loans with respect to, share draft accounts in 
accordance with rules and regulations prescribed by the Board. 
Except as provided in paragraph (2), an insured credit union 
may pay dividends on share draft accounts and may permit the 
owners of such share draft accounts to make withdrawals by 
negotiable or transferable instruments or other orders for the 
purpose of making transfers to third parties.
  (2) Paragraph (1) shall apply only with respect to share 
draft accounts in which the entire beneficial interest is held 
by one or more individuals or members or by an organization 
which is operated primarily for religious, philanthropic, 
charitable, educational, or other similar purposes and which is 
not operated for profit, and with respect to deposits of public 
funds by an officer, employee, or agent of the United States, 
any State, county, municipality, or political subdivision 
thereof, the District of Columbia, the Commonwealth of Puerto 
Rico, American Samoa, Guam, any territory or possession of the 
United States, or any political subdivision thereof.
  (g)(1) If the applicable rate prescribed in this subsection 
exceeds the rate an insured credit union would be permitted to 
charge in the absence of this subsection, such credit union 
may, notwithstanding any State constitution or statute which is 
hereby preempted for the purposes of this subsection, take, 
receive, reserve, and charge on any loan, interest at a rate of 
not more than 1 per centum in excess of the discount rate on 
ninety-day commercial paper in effect at the Federal Reserve 
bank in the Federal Reserve district where such insured credit 
union is located or at the rate allowed by the laws of the 
State, territory, or district where such credit union is 
located, whichever may be greater.
  (2) If the rate prescribed in paragraph (1) exceeds the rate 
such credit union would be permitted to charge in the absence 
of this subsection, and such State fixed rate is thereby 
preempted by the rate described in paragraph (1), the taking, 
receiving, reserving, or charging a greater rate than is 
allowed by paragraph (1), when knowingly done, shall be deemed 
a forfeiture of the entire interest which the loan carries with 
it, or which has been agreed to be paid thereon. If such 
greater rate of interest has been paid, the person who paid it 
may recover, in a civil action commenced in a court of 
appropriate jurisdiction not later than two years after the 
date of such payment, an amount equal to twice the amount of 
interest paid from the credit union taking or receiving such 
interest.
  (h) Notwithstanding any other provision of law, the Board may 
authorize a merger or consolidation of an insured credit union 
which is insolvent or is in danger of insolvency with any other 
insured credit union or may authorize an insured credit union 
to purchase any of the assets of, or assume any of the 
liabilities of, any other insured credit union which is 
insolvent or in danger of insolvency if the Board is satisfied 
that--
          (1) an emergency requiring expeditious action exists 
        with respect to such other insured credit union;
          (2) other alternatives are not reasonably available; 
        and
          (3) the public interest would best be served by 
        approval of such merger, consolidation, purchase, or 
        assumption.
  (i)(1) Notwithstanding any other provision of this Act or of 
State law, the Board may authorize an institution whose 
deposits or accounts are insured by the Federal Deposit 
Insurance Corporation to purchase any of the assets of or 
assume any of the liabilities of an insured credit union which 
is insolvent or in danger of insolvency, except that prior to 
exercising this authority the Board must attempt to effect the 
merger or consolidation of an insured credit union which is 
insolvent or in danger of insolvency with another insured 
credit union, as provided in subsection (h).
  (2) For purposes of the authority contained in paragraph (1), 
insured accounts of the credit union may upon consummation of 
the purchase and assumption be converted to insured deposits or 
other comparable accounts in the acquiring institution, and the 
Board and the National Credit Union Share Insurance Fund shall 
be absolved of any liability to the credit union's members with 
respect to those accounts.
  (j) Privileges Not Affected by Disclosure to Banking Agency 
or Supervisor.--
          (1) In general.-- The submission by any person of any 
        information to the Bureau of Consumer Financial 
        Protection, the Administration, any State credit union 
        supervisor, or foreign banking authority for any 
        purpose in the course of any supervisory or regulatory 
        process of such Board, supervisor, or authority shall 
        not be construed as waiving, destroying, or otherwise 
        affecting any privilege such person may claim with 
        respect to such information under Federal or State law 
        as to any person or entity other than such Board, 
        supervisor, or authority.
          (2) Rule of construction.-- No provision of paragraph 
        (1) may be construed as implying or establishing that--
                  (A) any person waives any privilege 
                applicable to information that is submitted or 
                transferred under any circumstance to which 
                paragraph (1) does not apply; or
                  (B) any person would waive any privilege 
                applicable to any information by submitting the 
                information to the Bureau of Consumer Financial 
                Protection, the Administration, any State 
                credit union supervisor, or foreign banking 
                authority, but for this subsection.

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