Financial Institutions Examination Fairness and Reform Act

Floor Speech

BREAK IN TRANSCRIPT

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 As we know, each regulator has their own rules about what decisions can or cannot be repealed.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.

BREAK IN TRANSCRIPT

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.

BREAK IN TRANSCRIPT

Source