The American Fintech Council (AFC) has announced its support for the Fair Audits and Inspections for Regulators’ (FAIR) Exams Act, a bipartisan and bicameral legislation aimed at enhancing transparency and accountability in bank examinations. The bill was introduced by Representatives French Hill (R-AR) and David Scott (D-GA) in the House, following its introduction in the Senate by Senators Jerry Moran (R-KS) and Joe Manchin (D-WV).
Phil Goldfeder, Chief Executive Officer of the AFC, emphasized the need for fair and efficient exams and appeals. "Innovative banks embracing responsible technology should be held to the highest regulatory standard to ensure important consumer access but they should also be granted the opportunity for fair and efficient exams and appeals," he stated.
The proposed legislation seeks to establish an independent review process to resolve disputes between banks and regulators. It includes hiring an independent director to oversee disputes and refer appeals to an administrative law judge. Additionally, it mandates timely responses during exams and aims to reduce examination burdens on financial institutions through increased transparency.
Congressman David Scott highlighted the importance of this act for community banks. “The bank examination process is the first line of defense against threats to bank safety and soundness. Unfortunately, in the event of a bank having deficiencies in their examinations, poor responsiveness can result in smaller community banks running the risk of going out of business,” he said. “The bipartisan FAIR Exams Act will ensure fairness, accountability, and efficiency to the supervisory examination process.”
Congressman French Hill echoed these sentiments, emphasizing that all banks deserve a fair supervisory examination process. “Banks deserve to experience a fair and efficient supervisory examination process,” he remarked. “The Fair Exams Act will allow any bank - including our community and rural banks in Arkansas - to appeal a supervisory determination through a third-party, independent director for review.”
The legislation also proposes creating a new Office of Independent Examination Review led by an independent director appointed by the Federal Financial Institutions Examination Council (FFIEC). This office would report annually to Congress on actions taken under this bill.
AFC has consistently advocated for clear regulatory frameworks that reflect industry developments while ensuring transparent examination processes. The council continues proactive engagement with state and federal financial services regulators.
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