[Congressional Record Volume 171, Number 200 (Monday, December 1, 2025)]
[House]
[Pages H4947-H4948]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
SYSTEMIC RISK AUTHORITY TRANSPARENCY ACT
Mr. DAVIDSON. Mr. Speaker, I move to suspend the rules and pass the
bill (H.R. 3716) 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, as
amended.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 3716
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 ``Systemic Risk Authority
Transparency Act''.
SEC. 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 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, Department of the
Treasury, 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, or 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.''.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Ohio (Mr. Davidson) and the gentlewoman from California (Ms. Waters)
each will control 20 minutes.
The Chair recognizes the gentleman from Ohio.
General Leave
Mr. DAVIDSON. Mr. Speaker, I ask unanimous consent that all Members
may have 5 legislative days in which to revise and extend their remarks
and include extraneous material on this bill.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Ohio?
There was no objection.
Mr. DAVIDSON. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I rise in support of H.R. 3716, the Systemic Risk
Authority Transparency Act.
Mr. Speaker, I thank the gentleman from Texas (Mr. Green) for
offering this bill. I am pleased to note that this legislation earned
unanimous support of the House Financial Services Committee in June,
passing 51-0. I thank Mr. Green for offering this bill.
Mr. Speaker, I reserve the balance of my time.
Ms. WATERS. Mr. Speaker, I yield 3 minutes to the gentleman from
Texas (Mr. Green). He is also the ranking member of the Subcommittee on
Oversight and Investigations.
Mr. GREEN of Texas. Mr. Speaker, and still I rise.
[[Page H4948]]
Mr. Speaker, I thank Chairman Hill; the gentleman from Ohio (Mr.
Davidson); and the ranking member for allowing me to carry and present
the Systemic Risk Authority Transparency Act.
Mr. Speaker, following the failures of Silicon Valley Bank and
Signature Bank in 2023, the Federal Deposit Insurance Corporation
invoked the systemic risk exception to guarantee uninsured deposits at
those banks. Before 2023, the systemic risk exception was invoked but
five times, all occurring between September 2008 and March 2009.
Mr. Speaker, it is important to note at this point the importance of
the knowledge of what has occurred in Congress. We call it
institutional knowledge. Institutional knowledge is important because
this legislation gives us the opportunity to explain why institutional
knowledge can make a difference.
Because the Honorable Maxine Waters was present in 2008 and saw what
occurred when banks were afraid to lend to each other, she was able to
give the necessary input when we had the Silicon Valley and Signature
Bank failures. She was able to give the necessary input to prevent a
further run on banks in this country. Institutional knowledge should
never be undervalued. We must maintain and keep our institutional
knowledge.
To prevent further panic in the financial system following the
collapse of Silicon Valley Bank and Signature Bank, the FDIC chose not
to follow the typical resolution process for failed banks, in which a
failed bank is immediately sold to a competitor.
{time} 1810
The Systemic Risk Authority Transparency Act would continue this
practice, requiring that for any use of a systemic risk exception, the
Government Accountability Office would have to produce the same post-
failure report within 60 days of invocation of a systemic risk
exception and a more comprehensive report in 180 days.
We deserve transparency--we, the Members of Congress--but the people
in this country deserve transparency also. It is this transparency that
helps people to have the confidence in the system necessary to prevent
runs on banks.
Again, I would want people to understand that institutional knowledge
is a supreme exemplar of what can occur when we have these
circumstances that require bold action, but you can't have bold action,
Mr. Speaker, without bold people. I thank the ranking member for her
bold action.
Ms. WATERS. Mr. Speaker, I have no further speakers, and I yield
myself the balance of my time.
Mr. Speaker, I thank my friend and colleague, Ranking Member Green,
for his good work on this bill.
H.R. 3716 will ensure that if we have another banking emergency, as
we did 2 years ago with several regional banks, and regulators respond
by using systemic risk tools, that Congress and the American people
promptly receive detailed information from GAO and others on what went
wrong and what should be done to promptly fix it.
This bill is supported by Americans for Financial Reform and Public
Citizen.
Mr. Speaker, I urge my colleagues to support this bill, and I yield
back the balance of my time.
Mr. DAVIDSON. Mr. Speaker, I yield myself the balance of my time.
Mr. Speaker, I include in the Record the CBO cost estimate for this
bill.
H.R. 3716, SYSTEMIC RISK AUTHORITY TRANSPARENCY ACT, AS REPORTED BY THE
HOUSE COMMITTEE ON FINANCIAL SERVICES ON JULY 15, 2025
------------------------------------------------------------------------
By fiscal year, millions of
dollars--
-----------------------------------
2025 2025-2030 2025-2035
------------------------------------------------------------------------
Direct Spending (Outlays)........... 0 * *
Revenues............................ 0 * *
Increase or Decrease (-) in the 0 * *
Deficit............................
Spending Subject to Appropriation 0 * *
(Outlays)..........................
------------------------------------------------------------------------
* = between -$500,000 and $500,000.
Increases net direct spending in any of the four
consecutive 10-year periods beginning in 2036? *
Increases on-budget deficits on any of the four consecutive
10-year periods beginning in 2036? *
Statutory pay-as-you-go procedures apply? Yes
Mandate Effects:
Contains intergovernmental mandate? No
Contains private-sector mandate? Yes, Under Threshold
H.R. 3716 would require several federal agencies to report
to the Congress if federal banking regulators invoke an
emergency determination known as the systemic risk exception.
Systemic risk is the possibility that the failure of a
financial business, market, or product could trigger severe
financial instability in the economy. The bill would require
the Federal Deposit Insurance Corporation (FDIC), the Federal
Reserve, the Government Accountability Office (GAO), and the
Office of the Comptroller of the Currency (OCC) to submit
information about bank supervision, regulation, management,
and recommendations to improve the safety and soundness of
the industry.
Enacting H.R. 3716 would increase administrative costs for
those agencies to meet the additional reporting requirements.
CBO estimates that the total cost across all four agencies
would be less than $500,000 over the 2025-2035 period. The
budgetary treatment for those four agencies is described
below:
The operating costs for the FDIC and the OCC are classified
as direct spending. The OCC collects fees from financial
institutions to offset its operating costs; those fees are
recorded as offsetting receipts, that is, as reductions in
direct spending. CBO estimates that enacting the bill would,
on net, increase direct spending by less than $500,000 over
the 2025-2035 period.
Costs incurred by the Federal Reserve reduce remittances to
the Treasury, which are recorded in the budget as revenues.
CBO estimates that enacting H.R. 3716 would decrease revenues
by less than $500,000 over the 2025-2035 period.
GAO's funding is provided in annual appropriation acts. CBO
estimates that implementing the bill would cost less than
$500,000 over the 2025-2030 period; any related spending
would be subject to the availability of appropriated funds.
If federal financial regulators increase annual fees to
offset the costs of implementing the bill, H.R. 3716 would
increase the costs of an existing private-sector mandate on
entities required to pay those fees. CBO estimates that the
incremental cost of the mandate would be small and would fall
well below the annual threshold established in the Unfunded
Mandates Reform Act (UMRA) for private-sector mandates ($206
million in 2025, adjusted annually for inflation).
The bill contains no intergovernmental mandates as defined
in UMRA.
The CBO staff contacts for this estimate are Julia Aman
(for federal costs), Nate Frentz (for revenues), and Rachel
Austin (for mandates). The estimate was reviewed by H. Samuel
Papenfuss, Deputy Director of Budget Analysis.
Mark P. Hadley
(For Phillip L. Swagel, Director, Congressional Budget
Office).
Legislation Considered Under Suspension of the Rules
The Majority Leader of the House of Representatives
announces bills that will be considered under suspension of
the rules in that chamber. Under suspension, floor debate is
limited, all floor amendments are prohibited, points of order
against the bill are waived, and final passage requires a
two-thirds majority vote.
At the request of the Majority Leader and the House
Committee on the Budget, CBO estimates the effects of those
bills on direct spending and revenues. CBO has limited time
to review the legislation before consideration. Although it
is possible in most cases to determine whether the
legislation would affect direct spending or revenues, time
may be insufficient to estimate the magnitude of those
effects. If CBO has prepared estimates for similar or
identical legislation, a more detailed assessment of
budgetary effects, including effects on spending subject to
appropriation, may be included.
Mr. DAVIDSON. For the reasons I explained earlier, Mr. Speaker, I
urge all of my colleagues to support this bill, and I yield back the
balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from Ohio (Mr. Davidson) that the House suspend the rules and
pass the bill, H.R. 3716, as amended.
The question was taken; and (two-thirds being in the affirmative) the
rules were suspended and the bill, as amended, was passed.
A motion to reconsider was laid on the table.
____________________