WASHINGTON, D.C. – U.S. Senator Jerry Moran (R-Kan.), a member of the Senate Banking Committee, and U.S. Senator Joe Manchin (D- W.Va.) have introduced the Financial Institutions Examination Fairness and Reform Act to address concerns about overzealous bank examiners and an uncertain regulatory climate for financial institutions. The bill would establish a more transparent approach to bank examinations and allow for a more robust appeals process for times when there is a legitimate disagreement between a regulator and the bank.

"The American economy will not benefit from a sustained recovery until certainty and confidence is restored to our financial system," Sen. Moran said. “Rather than provide clear rules of the road for an institution to make prudent loans to credit-worthy borrowers, banking agencies have made the lending climate worse by allowing the regulatory pendulum to swing too far. It is time to restore clarity and balance and I hope this bipartisan legislation can accomplish that objective."

"The citizens of this country and our community banks should not be paying the price for the wrongdoings of the Wall Street banks that caused our financial crisis," Sen. Manchin said. "One of the greatest problems with our current banking laws is that it’s just too difficult for small businesses to get the loans they need to expand and hire new employees. With the worst jobs climate in generations, it just makes sense to enact commonsense reforms that make our banking system more transparent and allow banks to make good loans to small businesses so that they can create jobs."

The bipartisan legislation would:
• Require that bank regulators provide timely responses to bankers during the examination process;
• Require bank regulators to provide clear and consistent guidelines for the treatment of loans;
• Create a new inter-agency Ombudsman to receive complaints about an examination or supervisory determination; and
• Explicitly prohibit regulatory retaliation based on an institution’s complaint or appeal.

This bipartisan legislation is the Senate companion bill to legislation introduced in the U.S. House of Representatives by Financial Institutions Subcommittee Chairman Shelley Moore Capito (R-W.Va.) and Ranking Member Carolyn Maloney (D-NY).

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