Bill Summary
This legislation, known as the Financial Stability Oversight Council Improvement Act of 2021, seeks to amend the Financial Stability Act of 2010. The amendment would require the Financial Stability Oversight Council to consider other options before determining that a nonbank financial company in the US should be supervised by the Federal Reserve Board of Governors. This measure aims to ensure that alternatives have been thoroughly evaluated and deemed insufficient before subjecting a company to increased oversight.
Possible Impacts
1. The "Financial Stability Oversight Council Improvement Act of 2021" could potentially lead to increased financial stability for individuals and businesses by requiring the Council to consider alternative approaches before determining a nonbank financial company should be supervised by the Federal Reserve. This could potentially prevent another financial crisis like the one in 2008, which greatly affected people's livelihoods and financial security.
2. The requirement for the Council to consult with the nonbank financial company and the primary regulatory agency could potentially give these parties a chance to voice their concerns and offer alternative solutions. This could lead to a more fair and informed decision-making process, potentially benefiting those who may have been unfairly targeted for supervision under the previous legislation.
3. The provision that a company may submit a written plan to the Council could potentially give the company more control over their own fate. If the Council determines that a different action or plan is sufficient to mitigate any threat to financial stability, the company could potentially avoid being placed under the supervision of the Federal Reserve. This could be beneficial for the company's operations and reputation, and also potentially for its employees and stakeholders who may have been negatively affected by the initial determination.
[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3899 Introduced in House (IH)]
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117th CONGRESS
1st Session
H. R. 3899
To amend the Financial Stability Act of 2010 to require the Financial
Stability Oversight Council to consider alternative approaches before
determining that a U.S. nonbank financial company shall be supervised
by the Board of Governors of the Federal Reserve System, and for other
purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
June 15, 2021
Mr. Foster (for himself, Mr. Perlmutter, Mr. Hollingsworth, and Mr.
Huizenga) introduced the following bill; which was referred to the
Committee on Financial Services
_______________________________________________________________________
A BILL
To amend the Financial Stability Act of 2010 to require the Financial
Stability Oversight Council to consider alternative approaches before
determining that a U.S. nonbank financial company shall be supervised
by the Board of Governors of the Federal Reserve System, and for other
purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Financial Stability Oversight
Council Improvement Act of 2021''.
SEC. 2. FINANCIAL STABILITY OVERSIGHT COUNCIL.
Section 113 of the Financial Stability Act of 2010 (12 U.S.C. 5323)
is amended--
(1) in subsection (a)--
(A) in paragraph (1), by striking ``The Council''
and inserting ``Subject to paragraph (3), the
Council''; and
(B) by adding at the end the following:
``(3) Initial determination.--The Council may not vote on a
proposed determination with respect to a U.S. nonbank financial
company under paragraph (1) unless the Council first
determines, in consultation with the company and the primary
financial regulatory agency with respect to the company, that a
different action by the Council or the agency (including the
application of new or heightened standards and safeguards under
section 120), or by the company under a written plan that is
submitted promptly to the Council, is impracticable or
insufficient to mitigate the threat that the company could pose
to the financial stability of the United States.''; and
(2) in subsection (f)(1), by striking ``subsection (e)''
and inserting ``subsections (a)(3) and (e)''.
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