Systemic Risk Authority Transparency Act

Bill: 118-hr-4116
Sponsor: full_name: Rep. Green, Al [D-TX-9]
Introduced: 2023-06-14
Policy area: Finance and Financial Sector
Subjects: Banking and financial institutions regulation

Congressional oversight

Government studies and investigations
Latest action: action_date: 2024-07-30
text: Placed on the Union Calendar, Calendar No. 512.

Summaries:
action_date: 2023-06-14
action_desc: Introduced in House
text: <p><b>Systemic Risk Authority Transparency Act </b></p> <p>This bill requires banking regulators to submit a report to Congress in the event of the failure of an insured depository institution that leads to a systemic risk determination by the Department of the Treasury. </p> <p>Regulators must report confidential supervisory information relating to the institution, any institutional mismanagement by the executives and the board, any shortcomings by the regulator, and recommendations to improve the safety and soundness of similarly situated institutions. This report must be made no later than 60 days after such a determination and again 180 days afterwards. </p> <p>The Governmental Accountability Office (GAO) must report on additional factors in its report regarding such a determination. Specifically, GAO must report on any mismanagement by the executives and board of the institution, a review of the institution's compensation practices, supervisory or regulatory shortcomings, actions taken by regulators, and other relevant information. The bill also requires this report to be made no later than 60 days after such a determination and again 180 days afterwards. </p>

tv_txt: IB Union Calendar No. 512 118th CONGRESS 2d Session H. R. 4116 [Report No. 118–614] IN THE HOUSE OF REPRESENTATIVES June 14, 2023 Mr. Green of Texas (for himself, Mr. Sherman , and Mrs. Beatty ) introduced the following bill; which was referred to the Committee on Financial Services July 30, 2024 Reported with an amendment, committed to the Committee of the Whole House on the State of the Union, and ordered to be printed Strike out all after the enacting clause and insert the part printed in italic For text of introduced bill, see copy of bill as introduced on June 14, 2023 A BILL To amend the Federal Deposit Insurance Act to require reports on the use of the systemic risk authority applicable to winding up a failed insured depository institution, and for other purposes.

1. Short title This Act may be cited as the Systemic Risk Authority Transparency Act . 2. Bank failure transparency related to systemic risk exception (a) GAO review Section 13(c)(4)(G)(iv) of the Federal Deposit Insurance Act ( 12 U.S.C. 1823(c)(4)(G)(iv) ) is amended to read as follows: (iv) GAO review (I) In general The Comptroller General of the United States shall, not later than later than 60 days after a determination is made under clause (i), and again 180 days thereafter, review and report to the Congress on the determination under clause (i), including— (aa) the basis for the determination; (bb) the purpose for which any action was taken pursuant to such clause; (cc) the likely effect of the determination and such action on the incentives and conduct of insured depository institutions and uninsured depositors; (dd) any mismanagement by the executives and board of the insured depository institution that contributed to the failure of the insured depository institution; (ee) a review of the compensation practices of the insured depository institution; (ff) any supervisory or regulatory shortcomings with respect to the appropriate Federal banking agency of the insured depository institution; (gg) any actions taken by the Federal banking regulators, Financial Stability Oversight Council, Treasury Department, and other relevant financial regulators in relation to the failure of the insured depository institution; and (hh) any additional relevant entities or activities that may have contributed to the failure of the insured depository institution, including with respect to auditing, accounting, credit rating agencies, investment bank underwriters, and emergency liquidity options such as loans from the Federal reserve banks or advances through the Federal Home Loan Bank system. (II) Rule of construction Nothing in this clause or a report issued pursuant to this clause may be construed to limit the authority of a Federal agency to enforce violations of Federal statutes, rules, or orders. . (b) Appropriate federal banking agency report Section 13(c) of the Federal Deposit Insurance Act ( 12 U.S.C. 1823(c) ) is amended by adding at the end the following: (12) Appropriate federal banking agency report (A) In general The appropriate Federal banking agency of an insured depository institution about which a determination is made under paragraph (4)(G)(i) shall, not later than 90 days after the date of such determination, and again 210 days thereafter, submit a report to the Congress that discloses the following: (i) Subject to such redactions as the appropriate Federal banking agency determines appropriate of personally identifiable information about customers and other financial institutions (as such term is defined under section 11(e)(9)(D)), all— (I) reports of examination and inspection that relate to the failed insured depository institution in the previous 3-year period; (II) formal communications of a material supervisory determination conveyed to the failed insured depository institution in the previous 3-year period; and (III) any additional exam reports and correspondence that the appropriate Federal banking agency determines may be relevant to the failure of the insured depository institution. (ii) An examination of any mismanagement by the executives and board of the insured depository institution that contributed to the failure of the insured depository institution. (iii) Any supervisory or regulatory shortcomings by such appropriate Federal banking agency with respect to the insured depository institution. (iv) Any dynamics that the appropriate Federal banking agency determines may have contributed to the failure of the insured depository institution. (v) Any supervisory, regulatory, and legislative recommendations such appropriate Federal banking agency may have to improve the safety and soundness of similarly situated insured depository institutions, the banking system, and financial stability. (B) Protection of sensitive information (i) Effect on privilege The provision of any information by a Federal banking agency under this paragraph may not be construed as— (I) waiving, destroying, or otherwise affecting any privilege applicable to the information; or (II) waiving any exemption applicable to the information under section 552 of title 5 United States Code (commonly known as the Freedom of Information Act ). (ii) Transparency (I) In general A Federal banking agency shall publish materials contained in a report required under subparagraph (A) to the fullest extent possible to promote transparency. (II) Consultation on omitting materials If a Federal banking agency determines particular materials described under subclause (I) should not be published, the Federal banking agency shall consult with the chair and ranking member of the Committee on Financial Services of the House of Representatives and the chair and ranking member of the Committee on Banking, Housing, and Urban Affairs of the Senate. (III) Omitting materials If, after the consultation required under subclause (II), the Federal banking agency determines there is a substantial public interest in not publishing such materials, the Federal banking agency shall provide those materials to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate with a written explanation describing the reasons for not publishing those materials. (iii) Privilege For purposes of this subparagraph, the term privilege includes any work-product, attorney-client, or other privilege recognized under Federal or State law. (C) Report extension A Federal banking agency may extend a deadline described under subparagraph (A) for an additional 60 days, if the Federal banking agency— (i) faces ongoing circumstances that require the Federal banking agency to prioritize activities to promote stability of the U.S. banking system; and (ii) notifies the Congress of such extension and the reasons for such extension. (D) Consolidated reports A Federal banking agency may consolidate multiple reports required under this paragraph so long as the individual reports being consolidated all meet the timing requirements under this paragraph. (E) Rule of construction Nothing in this paragraph or reports or materials provided pursuant to this paragraph may be construed to limit the authority of a Federal agency to enforce violations of Federal statutes, rules, or orders. .

July 30, 2024 Reported with an amendment, committed to the Committee of the Whole House on the State of the Union, and ordered to be printed

tv_txt: I 118th CONGRESS 1st Session H. R. 4116 IN THE HOUSE OF REPRESENTATIVES June 14, 2023 Mr. Green of Texas (for himself, Mr. Sherman , and Mrs. Beatty ) introduced the following bill; which was referred to the Committee on Financial Services A BILL To amend the Federal Deposit Insurance Act to require reports on the use of the systemic risk authority applicable to winding up a failed insured depository institution, and for other purposes.

1. Short title This Act may be cited as the Systemic Risk Authority Transparency Act . 2. Systemic risk provisions (a) GAO review Section 13(c)(4)(G)(iv) of the Federal Deposit Insurance Act ( 12 U.S.C. 1823(c)(4)(G)(iv) ) is amended to read as follows: (iv) GAO Review The Comptroller General of the United States shall, not later than later than 60 days after a determination is made under clause (i), and again 180 days thereafter, review and report to the Congress on the determination under clause (i), including— (I) the basis for the determination; (II) the purpose for which any action was taken pursuant to such clause; (III) the likely effect of the determination and such action on the incentives and conduct of insured depository institutions and uninsured depositors; (IV) any mismanagement by the executives and board of the insured depository institution that contributed to the failure of the insured depository institution; (V) a review of the compensation practices of the insured depository institution; (VI) any supervisory or regulatory shortcomings with respect to the primary Federal banking regulators of the insured depository institution; (VII) any actions taken by the Federal banking regulators, Financial Stability Oversight Council, Treasury Department, and other relevant financial regulators in relation to the bank’s failure; and (VIII) any additional relevant entities or activities that may have contributed to the failure of the insured depository institution, including with respect to auditing, accounting, credit rating agencies, investment bank underwriters, and emergency liquidity options such as loans from the Federal Reserve or advances through the Federal Home Loan Bank system. . (b) Primary Federal regulator report Section 13(c) of the Federal Deposit Insurance Act ( 12 U.S.C. 1823(c) ) is amended by adding at the end the following: (12) Primary Federal Regulator report The primary Federal regulator of an insured depository institution about which a determination is made under clause (i) shall, not later than 60 days after the date of such determination, and again 180 days thereafter, submit a report to the Congress that— (A) discloses all confidential supervisory information held by such primary Federal regulator that relates to the failed insured depository institution; (B) examines any mismanagement by the executives and board of the insured depository institution that contributed to the failure of the insured depository institution; (C) discloses any supervisory or regulatory shortcomings by such primary Federal regulator with respect to the insured depository institution; (D) describes any dynamics that the primary Federal regulator determines may have contributed to the failure of the insured depository institution; and (E) includes any supervisory, regulatory, and legislative recommendations such primary Federal regulator may have to improve the safety and soundness of similarly situated insured depository institutions, the banking system, and financial stability. .