Fair Audits and Inspections for Regulators' Exams Act

What it does

• •Requires federal financial regulators to complete examinations of most financial institutions within 270 days of commencement, with written notice needed for extensions, and to provide final examination reports within 90 days of the exit interview.
• •Establishes a procedure for financial institutions to request written guidance from regulators on specific activities, interpretations of law or regulations, or application of supervisory guidance, with regulators required to respond within 60 days of a complete request.
• •Creates an Office of Independent Examination Review within the Federal Financial Institutions Examination Council, headed by a three-member Board appointed by the President with Senate confirmation, to review and provide recommendations on examination disputes.

Why it matters

• •The bill aims to reduce regulatory uncertainty and delays by imposing specific timelines on examination completion and regulatory guidance, which the bill frames as necessary to provide fairness to regulated institutions.
• •The independent review office provides a mechanism for financial institutions to challenge examination findings and regulatory determinations without going through courts, establishing an internal dispute resolution process.

Who is affected

• •Federal financial institutions and covered financial institutions subject to examination or supervisory authority of federal financial regulators.
• •Federal financial institutions regulatory agencies, which must comply with examination timelines and establish procedures for issuing written guidance.

What happens next

The bill was referred to the Committee on Banking, Housing, and Urban Affairs for consideration.