[Congressional Record Volume 172, Number 27 (Monday, February 9, 2026)]
[House]
[Pages H2076-H2078]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
BRINGING THE DISCOUNT WINDOW INTO THE 21ST CENTURY ACT
Mr. HILL of Arkansas. Mr. Speaker, I move to suspend the rules and
pass the bill (H.R. 3390) to amend the Federal Reserve Act to require
the Board of Governors of the Federal Reserve System to carry out a
review of discount window operations and to implement improvements to
such operations, and for other purposes, as amended.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 3390
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 ``Bringing the Discount Window
into the 21st Century Act''.
SEC. 2. REVIEW OF DISCOUNT WINDOW OPERATIONS.
Section 10 of the Federal Reserve Act (12 U.S.C. 241 et
seq.) is amended--
(1) by redesignating paragraph (12) as paragraph (11); and
(2) by adding at the end the following:
``(12) Review of discount window operations.--
``(A) In general.--Not later than 60 days after the date of
enactment of this paragraph, the Board of Governors shall
commence a review of the discount window lending programs of
the Federal reserve banks (the `discount window'), and shall
complete such review not later than 240 days after the date
of enactment of this paragraph.
``(B) Contents.--The review required by subparagraph (A)
shall include a consideration of--
``(i) the effectiveness of the discount window in providing
liquidity to financial institutions, including in times of
financial stress;
``(ii) whether the technology infrastructure, including
means of communications, are sufficient to support the timely
provision of liquidity, including in times of financial
stress;
``(iii) the effectiveness of cybersecurity measures
implemented with respect to discount window operations;
``(iv) the effectiveness of communications between Federal
reserve banks, financial institutions, the Board of
Governors, the Federal Deposit Insurance Corporation, the
Comptroller of the Currency, and the Secretary of the
Treasury regarding discount window operations;
``(v) the effectiveness of the Board of Governors in
providing oversight of the discount window and in ensuring
consistent access to the discount window across the Federal
Reserve System;
``(vi) how the discount window interacts with other
providers of liquidity, including the Federal Home Loan
Banks, during both normal operations and times of financial
distress;
``(vii) the effectiveness of existing discount window
operating hours and whether such hours should be expanded,
taking into account the interaction between discount window
operating hours and the operating hours of payment systems of
the Federal reserve banks, such as the Fedwire Funds Service
and FedNow Service;
``(viii) the impact of mobile banking and instant
communications technology on depositor behavior and liquidity
risk posed to financial institutions, including how the
discount window can--
``(I) help financial institutions better respond to rapid
liquidity shortfalls; and
``(II) prevent broader financial instability; and
``(ix) the effectiveness of the discount window in light of
the stigma associated with its usage, ways to reduce such
stigma, and ways to improve access, operational efficiency,
transparency, and timeliness of the process for financial
institutions seeking advances, including on the pricing and
other terms of such advances.
``(C) Remediation plan.--After the Board of Governors
completes the review required by subparagraph (A), the Board
of Governors, in consultation with the Federal reserve banks,
shall--
``(i) identify deficiencies with the discount window and
areas for enhancing discount window effectiveness; and
``(ii) develop a written plan to remediate the identified
deficiencies and implement the identified enhancements, which
shall include--
``(I) an identification of actions that will be taken to
enhance discount window effectiveness and remediate
identified deficiencies;
``(II) timelines and milestones for implementing the plan
and measures to demonstrate how the implemented improvements
will be maintained on an ongoing basis; and
``(III) measures of managing and controlling any
deficiencies and current operations until the plan is
implemented in full.
``(D) Report to congress on review and plan.--
``(i) In general.--Not later than 365 days after the date
of enactment of this paragraph, the Board of Governors shall
submit a report to the Committee on Financial Services of the
House of Representatives and the Committee on Banking,
Housing, and Urban Affairs of the Senate containing--
``(I) the findings of the review required by subparagraph
(A); and
[[Page H2077]]
``(II) the remediation plan required by subparagraph (C).
``(ii) Consultation.--Before submitting the report required
by clause (i), the Board of Governors shall--
``(I) provide a copy of the proposed report to the
Comptroller of the Currency, the Federal Deposit Insurance
Corporation, and the Secretary of the Treasury; and
``(II) provide the Comptroller of the Currency, the Federal
Deposit Insurance Corporation, and the Secretary of the
Treasury with an opportunity to provide feedback on the
report.
``(iii) Testimony.--The Chairman of the Board of Governors
shall, at the semi-annual hearing required under section 2B,
testify with respect to the contents of the report required
under this subparagraph.
``(E) Annual reports to congress.--
``(i) Reports by the board.--The Board of Governors shall
submit an annual report to the Committee on Financial
Services of the House of Representatives and the Committee on
Banking, Housing, and Urban Affairs of the Senate containing
a review of the effectiveness of discount window operations
and a progress report on the actions taken to implement the
identified enhancements described in subparagraph (C).
``(ii) Reports by the inspector general.--The Inspector
General of the Board of Governors of the Federal Reserve
System and the Bureau of Consumer Financial Protection shall
submit an annual report to the Committee on Financial
Services of the House of Representatives and the Committee on
Banking, Housing, and Urban Affairs of the Senate containing
a report on the progress of the Board of Governors in
implementing the remediation plan required by subparagraph
(C).
``(F) Confidential report information.--Any report required
under this paragraph may contain a confidential annex
containing information that, if made public, could--
``(i) impact monetary policy, financial stability, or
cybersecurity; or
``(ii) significantly endanger the financial stability of
any financial institution.
``(G) Repeal.--This paragraph shall be repealed on the date
on which the Board of Governors notifies the Congress and
publishes on a public website of the Board of Governors that
the remediation plan required under subparagraph (C) has been
fully implemented.''.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Arkansas (Mr. Hill) and the gentlewoman from Ohio (Mrs. Beatty) each
will control 20 minutes.
The Chair recognizes the gentleman from Arkansas.
General Leave
Mr. HILL of Arkansas. 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 for the Record on this bill.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Arkansas?
There was no objection.
Mr. HILL of Arkansas. Mr. Speaker, I yield myself such time as I may
consume. I rise today in support of Ms. De La Cruz's bill, the Bringing
the Discount Window into the 21st Century Act.
It is critical that our banks have the ability to have emergency
liquidity in the case of a crisis or having liquidity intraday in the
banking day without a stigma. These are challenges. They were
challenges before the financial crisis, but it continues today.
This bill allows banks to keep credit flowing through the economy
while reducing risks that a panic-induced bank run would lead to
unnecessary bank failures.
{time} 1630
The discount window has been underused and burdened by operational
difficulties and stigma. We have seen that on this House floor in our
economy, most recently in the failures of Silicon Valley Bank and
Signature Bank in the spring of 2023, where fear of a market reaction
and outdated technology delayed the use of the discount window when it
was needed most.
It is critical that the Federal Reserve learn from these mistakes of
the past and allow the discount window to fulfill its role as the
primary tool for stabilizing the financial system in a time of stress.
Representative De La Cruz's bipartisan bill would do just that by
directing the Fed to conduct a review of the discount window, submit a
plan to Congress with concrete, actionable reforms, and then provide
regular updates on its implementation.
For example, H.R. 3390 explicitly directs the Federal Reserve to
evaluate whether extending operating hours and improving technology
would make the discount window more accessible and thereby more
effective. In requiring the Fed to make changes based on these
findings, H.R. 3390 goes beyond a study bill and would meaningfully
address deficiencies that would make the American financial system
stronger and more stable.
Mr. Speaker, I thank the gentlewoman from south Texas (Ms. De La
Cruz) for her leadership on this important issue to make sure the Fed
is ready and the discount window use is appropriate for the 21st
century, where money now moves, Mr. Speaker, at the press of a button.
Mr. Speaker, I urge my colleagues to support this bill, and I reserve
the balance of my time.
Mrs. BEATTY. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I rise in support of H.R. 3390, the Bringing the
Discount Window into the 21st Century Act, sponsored by Representative
De La Cruz.
It has been almost 3 years since we saw the dramatic failure of
Silicon Valley Bank, Signature Bank, and First Republic Bank,
representing the second, third, and fourth largest bank failures in
United States history.
Silicon Valley Bank was the fastest bank run ever, with $42 billion
of deposits withdrawn on a Thursday and customers trying to pull out
another $100 billion the next morning when the bank failed.
Upon learning of Silicon Valley's failure, Ranking Member Waters
organized Member briefings with the Treasury Secretary and banking
regulators. We encouraged Biden's regulators, led by former Secretary
Yellen, to use their emergency tools to mitigate the damage, which they
successfully did.
We worked with our former chairman, Mr. McHenry, and launched a
bipartisan investigation to conduct oversight and understand what went
wrong. We received reports and supervisory documents, and hearings were
also held.
Based on the lessons we learned, I and my Democratic colleagues,
including Representatives Waters, Sherman, Lynch, Green, Casten, Tlaib,
and Pettersen, introduced a wave of commonsense bills to promote
safety, soundness, and accountability.
Since then, we have been pushing for action that is long overdue, and
I am glad that Chairman Hill agreed to include several of our post-
Silicon Valley Bank bills in the housing package.
We have other good reforms for community financial institutions in
that packet, but another most critical issue Congress must address is
the need to update our deposit insurance framework.
I appreciate that Chairman Hill recently held a hearing on
Representative Waters' bill, H.R. 4551, the Employee Paycheck and Small
Business Protection Act. We have had a good discussion on the pros and
cons of different approaches.
After Silicon Valley Bank's failure, community banks watched small
businesses move their deposits to the biggest banks to make sure that
they could pay their workers in good times or bad.
There have been at least 37 bank failures since 2007, including a
recent one in Oklahoma, that were too small for regulators to use
emergency tools, and unlike Silicon Valley Bank's customers, small
business depositors lost money through no fault of their own.
Representative Waters' bill would take the data-driven approach that
Chairman Hill prefers to study and then update our deposit insurance
framework to allow more business payment accounts to be insured based
on that research.
This effort has strong bipartisan support, including that of the Vice
President and Treasury Secretary, so I hope we can advance those
reforms soon for community financial institutions, midsized banks, and
small businesses and their workers.
Turning back to the bill that we are considering here, H.R. 3390, I
have heard from minority deposit institutions and other community banks
about various challenges that they have had in accessing Fed
facilities, including the discount window in 2023.
This is a commonsense bill to ensure the Federal Reserve improves its
discount window to provide emergency liquidity to banks when they need
it.
I appreciate that the chairman and sponsor worked with Representative
Waters and Representative Foster to include our amendments to help
ensure that we learn how technology may require faster emergency
liquidity deployment, as well as understanding
[[Page H2078]]
barriers like stigma that need to be addressed to improve the
functioning of the discount window.
Mr. Speaker, I urge Members to support H.R. 3390, and I reserve the
balance of my time.
Mr. HILL of Arkansas. Mr. Speaker, I include in the Record the CBO
estimate for this bill.
EFFECTS ON DIRECT SPENDING AND REVENUES OF LEGISLATION CONSIDERED UNDER SUSPENSION OF THE RULES IN THE HOUSE OF
REPRESENTATIVES WEEK OF FEBRUARY 9, 2026
----------------------------------------------------------------------------------------------------------------
Additional
Information on
Bill Number Title Effect on Direct Effect on Revenues Direct Spending
Spending and Revenue
Effects
----------------------------------------------------------------------------------------------------------------
H.R. 3390....................... Bringing the None.............. Reduce by at Least Would increase
Discount Window $500K. deficits by more
into the 21st than $500K.
Century Act, as
amended.
----------------------------------------------------------------------------------------------------------------
Source: Congressional Budget Office.
Mr. HILL of Arkansas. Mr. Speaker, I yield 3 minutes to the
gentlewoman from Texas (Ms. De La Cruz), the author of this important
legislation.
Ms. De La CRUZ. Mr. Speaker, I thank Chairman Hill for yielding.
Mr. Speaker, today, I rise in support of my bill, H.R. 3390, the
Bringing the Discount Window into the 21st Century Act of 2025, which
has received broad bipartisan support in the Financial Services
Committee.
H.R. 3390 addresses needed improvements for the Federal Reserve's
discount window operations and technology to ensure it is better
equipped to serve depository institutions, including community banks,
which strengthens the resiliency of our U.S. financial system.
The Federal Reserve's important role as the lender of last resort is
supported by the Fed's discount window. In times when depository
institutions need liquidity, they can rely on the discount window to
fulfill short-term liquidity needs by pledging high-quality collateral
such as U.S. Treasuries in return for cash.
Unfortunately, as we saw most recently in the 2023 bank failures,
stigma remains, which can cause the discount window to be underused or
banks to delay accessing it for fear of market reactions.
Bringing the Discount Window into the 21st Century Act ensures that
Congress acts on the bipartisan consensus to modernize the Federal
Reserve's discount window operations and reduce the stigma of accessing
it.
H.R. 3390 does so by requiring the Federal Reserve to conduct a
review of the discount window to identify deficiencies and develop a
remediation plan. This review will identify improvements in all aspects
of discount window operations, including technology, operating hours,
stigma, and interaction with other providers of liquidity, including
the Federal Home Loan Banks, during both normal operations and times of
financial stress.
By improving efficiencies in the U.S. banking system, we are ensuring
homeowners, small businesses, and farmers can access capital from their
financial institutions when they need it most.
Mr. Speaker, I urge my colleagues to join me in support of H.R. 3390.
{time} 1640
Mrs. BEATTY. Mr. Speaker, I yield 2\1/2\ minutes to the gentleman
from Illinois (Mr. Foster), who is also the ranking member of the
Subcommittee on Financial Institutions.
Mr. FOSTER. Mr. Speaker, I rise in support of this legislation, which
requires the Federal Reserve to conduct a comprehensive review of
discount window operations, including its technological infrastructure,
cybersecurity, communications, real-time monitoring, and oversight
mechanisms across the Federal Reserve System.
In 2023, we witnessed the most significant banking turmoil since the
global financial crisis. During that period, record numbers of
institutions turned to the discount window, borrowing at unprecedented
levels with more than $150 billion borrowed during the peak period.
The system held in large part because of the reforms and regulatory
tools provided and implemented as part of the Dodd-Frank Act, but it
came under stress.
I also appreciate the willingness of the legislation's sponsor to
accept my amendment during the Financial Services Committee markup of
this legislation. With my amendment, this bill recognizes that bank
runs will now move at the speed of mobile online banking and instant
communications. Soon, they will move at the speed of agentic AI.
The bank failures of 2023 showed that liquidity pressures can
escalate in hours, not days, a speed that will only intensify with the
rise of artificial intelligence and autonomous financial agents.
This legislation will require the Federal Reserve Board to develop a
written plan to remedy deficiencies like those to be identified during
the review process. This review and remediation will lead to more
accessible, responsive, and secure discount window operations.
Mr. Speaker, I encourage my colleagues to support this bill.
Mr. HILL of Arkansas. Mr. Speaker, I reserve the balance of my time.
Mrs. BEATTY. Mr. Speaker, I yield myself the balance of my time.
Mr. Speaker, this bill will help ensure smaller banks can access the
Federal discount window when they need it, which may be sooner rather
than later, given that Trump's policies are once again raising the
threat of another crisis.
Therefore, I urge Members to vote ``yes,'' and I yield back the
balance of my time.
Mr. HILL of Arkansas. Mr. Speaker, I yield myself the balance of my
time.
Mr. Speaker, I thank the gentlewoman from south Texas for advancing
this bill. I thank the minority's consistent work to make sure that
this is a bill that will substantially direct the Federal Reserve to
make sure our discount window is effective and used by our financial
institutions to enhance financial stability.
Mr. Speaker, I urge both sides of the aisle to vote ``yes,'' and I
yield back the balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from Arkansas (Mr. Hill) that the House suspend the rules and
pass the bill, H.R. 3390, 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.
____________________