[House Report 119-234]
[From the U.S. Government Publishing Office]
119th Congress } { Report
HOUSE OF REPRESENTATIVES
1st Session } { 119-234
=======================================================================
BRINGING THE DISCOUNT WINDOW INTO THE 21ST
CENTURY ACT
----------------
September 4, 2025.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
----------------
Mr. Hill of Arkansas, from the Committee on Financial Services,
submitted the following
R E P O R T
[To accompany H.R. 3390]
The Committee on Financial Services, to whom was referred
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, having considered the same, reports favorably thereon
with an amendment and recommends that the bill as amended do
pass.
CONTENTS
Page
Purpose and Summary.............................................. 3
Background and Need for Legislation.............................. 3
Committee Consideration.......................................... 4
Related Hearings................................................. 4
Committee Votes.................................................. 5
Committee Oversight Findings..................................... 7
Performance Goals and Objectives................................. 7
Committee Cost Estimate.......................................... 7
New Budget Authority and CBO Cost Estimate....................... 7
Unfunded Mandates Statement...................................... 7
Earmark Statement................................................ 7
Federal Advisory Committee Act Statement......................... 8
Applicability to the Legislative Branch.......................... 8
Duplication of Federal Programs.................................. 8
Section-by-Section Analysis of the Legislation................... 8
Changes in Existing Law Made by the Bill, as Reported............ 9
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
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
``(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.''.
Purpose and Summary
H.R. 3390, the Bringing the Discount Window into the 21st
Century Act, was introduced on May 14, 2025 by Republican
Representative Monica De La Cruz (TX-15). H.R. 3390 directs the
Federal Reserve Board to review its discount window program,
identify deficiencies, develop a remediation plan, and submit a
report to Congress outlining findings and proposed
improvements.
Background and Need for Legislation
The Federal Reserve's discount window is a core element of
its role as lender of last resort, providing liquidity to
solvent depository institutions during periods of stress.
Access is conditioned on the posting of high-quality collateral
and paying a penalty rate. In extraordinary circumstances, the
Fed may also lend to nonbank financial institutions under
Section 13(3) of the Federal Reserve Act. However, persistent
stigma and outdated infrastructure have made institutions
reluctant to use the window, impairing the discount window's
function as a source of emergency liquidity during financial
stress.
Operational shortcomings have also limited the window's
usefulness. Until 2024, online access was minimal, and its
closing time of 7 p.m. Eastern Time, excludes institutions
still operating on the West Coast. This was a contributing
factor to the collapse of Silicon Valley Bank in 2023. Even
Federal Reserve Chair, Jerome Powell, acknowledged that the
process was inefficient.\1\ H.R. 3390 reflects a commitment to
strengthening the discount window's functionality and ensuring
it is a timely, modern tool for preventing liquidity crises and
safeguarding financial stability.
---------------------------------------------------------------------------
\1\Kyle Campbell, Powell: Banks are working to avoid `clunky'
discount window experience, AMERICAN BANKER (July 26, 2023), https://
www.americanbanker.com/news/powell-banks-working-to-avoid-clunky-
discount-window-experience.
---------------------------------------------------------------------------
Committee Consideration
119TH CONGRESS
On May 14, 2025, Representative De La Cruz introduced H.R.
3390, the Bringing the Discount Window into the 21st Century
Act, with Representatives Daniel Meuser (R-PA) and Frank D.
Lucas (R-OK) as original cosponsors. The bill was referred
solely to the Committee on Financial Services.
The bill was attached to the May 14, 2025 hearing titled
``Enhancing Competition: Shaping the Future of Bank Mergers and
De Novo Formation''.
On July 23, 2025, the Committee on Financial Services met
in open session to consider, among others, H.R. 3390. The
Committee ordered H.R. 3390, as amended, to be favorably
reported to the House of Representatives.
118TH CONGRESS
On May 8, 2024, Representative Andy Barr (R-KY) introduced
H.R. 8288, the Bringing the Discount Window into the 21st
Century Act. The bill was referred solely to the Committee on
Financial Services. A draft version of the bill was attached to
the May 15, 2024 hearing of the Committee on Financial Services
titled, ``Oversight of Prudential Regulators.'' The text of
H.R. 8288 was included as Title V in H.R. 8337, the Bank
Resilience and Regulatory Improvement Act, which was ordered to
be reported by the Committee on May 16, 2024 by a vote of 24
yeas and 22 nays. H. Rept. 118-788 accompanying the bill was
filed on December 3, 2024. There was no further action on the
bill in the 118th Congress.
Related Hearings
Pursuant to clause 3(c)(6) of rule XIII of the Rules of the
House of Representatives, the following hearing was used to
develop H.R. 3390:
The Subcommittee on Financial Institutions held a May 14,
2025 hearing titled, ``Enhancing Competition: Shaping the
Future of Bank Mergers and De Novo Formation.'' A discussion
draft version of the bill was attached to the hearing. The
following witnesses testified: Mr. Keith Costello, President
and CEO, Locality Bank; Ms. Mary Usategui, President and CEO,
BankMiami; Ms. Amanda Allexon, Partner, Simpson Thacher &
Bartlett LLP; Mr. John Berlau, Senior Fellow and Director of
Finance Policy, Competitive Enterprise Institute; and Mrs.
ReShonda Young, Founder, Jabez Inc.
Committee Votes
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee Report to include record
votes on the motion to report legislation and amendments
thereto.
On July 23, 2025, the Committee ordered H.R. 3390, as
amended, to be reported favorably to the House by a recorded
vote of 48 yeas and 1 nay. (Record Vote No. FC-190).
The Committee considered the following amendments to H.R.
3390:
Representative De La Cruz offered an
amendment in the nature of a substitute, designated as
DeLaCruz_037, which made minor edits and technical
changes. This amendment was agreed to by a voice vote.
Representative Bill Foster (D-IL) offered an
amendment (No. 12), designated as Foster_044. This
amendment would require the Federal Reserve to review
the effectiveness of communications between the Federal
Reserve Banks, financial institutions, the Board of
Governors, the FDIC, OCC, and the Department of
Treasury. This amendment would require a review of
different financial institutions' access to the
discount window to ensure consistency, how mobile
banking and instant communications technology impact
depositor behavior and liquidity risk posed by
financial institutions, and whether changes can be made
to the discount window to better address the rapid
liquidity demands that could be faced by banks in the
future. This amendment was agreed to by a voice vote.
Representative Maxine Waters (D-CA) offered
an amendment (No. 13), designated as Waters_077. This
amendment would require the Federal Reserve to review
the effectiveness of the discount window in light of
the stigma associated with its usage, ways to reduce
stigma, and ways to improve access, operational
efficiency, transparency, and timeliness of the
process. This amendment was agreed to by a voice vote.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Committee Oversight Findings
Pursuant to clause 3(c) of rule XIII of the Rules of the
House of Representatives, the findings and recommendations of
the Committee, based on oversight activities under clause
2(b)(1) of rule X of the Rules of the House of Representatives
are incorporated in the descriptive portions of this report.
Performance Goals and Objectives
Pursuant to clause 3(c)(4) of rule XIII of the Rules of the
House of Representatives, the goal of H.R. 3390 is to direct
the Federal Reserve to review and submit a remediation plan to
enhance the functionality of the discount window for preventing
liquidity crises and safeguarding financial stability.
Committee Cost Estimate
Clause 3(d)(1) of rule XIII of the Rules of the House of
Representatives requires an estimate and a comparison of the
costs that would be incurred in carrying out H.R. 3390. The
Committee has requested but not received a cost estimate from
the Director of the Congressional Budget Office. However,
pursuant to clause 3(d)(1) of rule XIII of the Rules of the
House of Representatives, the Committee will adopt as its own
the cost estimate by the Director of the Congressional Budget
Office once it has been prepared.
New Budget Authority and CBO Cost Estimate
With respect to the requirements of clause 3(c)(2) of rule
XIII of the Rules of the House of Representatives and section
308(a) of the Congressional Budget Act of 1974 and with respect
to requirements of clause 3(c)(3) of rule XIII of the Rules of
the House of Representatives and section 402 of the
Congressional Budget Act of 1974, the Committee will adopt as
its own the cost estimate for the bill prepared by the Director
of the Congressional Budget Office. However, a cost estimate
was not made available to the Committee in time for the filing
of this report. The Chairman of the Committee shall cause such
estimate to be printed in the Congressional Record upon its
receipt by the Committee.
Unfunded Mandates Statement
The Committee has requested but not received from the
Director of the Congressional Budget Office an estimate of the
Federal mandates pursuant to section 423 of the Unfunded
Mandates Reform Act. The Chairman of the Committee shall cause
such estimate to be printed in the Congressional Record upon
its receipt by the Committee.
Earmark Statement
In compliance with clause 9 of rule XXI of the Rules of the
House of Representatives, this bill, as reported, contains no
congressional earmarks, limited tax benefits, or limited tariff
benefits as defined in clause 9(e), 9(f), or 9(g) of rule XXI.
Federal Advisory Committee Act Statement
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
Applicability to the Legislative Branch
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.
Duplication of Federal Programs
Pursuant to clause 3(c)(5) of rule XIII of the Rules of the
House of Representatives, the Committee states that no
provision of the bill establishes or reauthorizes a program of
the Federal Government known to be duplicative of another
Federal program, including any program that was included in a
report to Congress pursuant to section 21 of the Public Law
111-139 or the most recent Catalog of Federal Domestic
Assistance.
Section-by-Section Analysis of the Legislation
Section 1. Short title
Section 1 provides the short title is the ``Bringing the
Discount Window into the 21st Century Act''.
Section 2. Review of discount window operations
Section 2 directs the Board of Governors of the Federal
Reserve System, no later than 60 days after the date of
enactment of this Act, to conduct a review of the discount
window lending programs of the Federal Reserve banks. The
review shall include a consideration of the discount window's
effectiveness in providing liquidity to financial institutions
in times of financial stress; whether the technology
infrastructure are sufficient to support the timely provision
of liquidity; the effectiveness of cybersecurity measures,
communications between Federal reserve banks, the Board of
Governors in providing oversight of the discount window,
existing discount window operating hours and whether such hours
should be expanded, and how the discount window interacts with
other providers of liquidity, including the Federal Home Loan
Banks.
This section directs the Board of Governors, upon
completion of the review, to develop and approve a written plan
to remediate any identified deficiencies or areas for enhancing
the effectiveness of the discount window.
This section requires the Board of Governors, no later than
365 days after the date of enactment of this Act, to 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 findings of the review
and the remediation plan.
This section requires the Chairman of the Board of
Governors to testify before the Committee on Financial Services
of the House of Representatives and the Committee on Banking,
Housing, and Urban Affairs of the Senate with respect to the
contents of the report, and requires the Board of Governors
submit an annual report to the respective committees of
jurisdiction.
This section allows the Board of Governors to include a
confidential annex for certain types of information.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italics, and existing law in which no
change is proposed is shown in roman):
FEDERAL RESERVE ACT
* * * * * * *
board of governors of the federal reserve system
Sec. 10. The Board of Governors of the Federal Reserve System
(hereinafter referred to as the ``Board'') shall be composed of
seven members, to be appointed by the President, by and with
the advice and consent of the Senate, after the date of
enactment of the Banking Act of 1935, for terms of fourteen
years except as hereinafter provided, but each appointive
member of the Federal Reserve Board in office on such date
shall continue to serve as a member of the Board until February
1, 1936, and the Secretary of the Treasury and the Comptroller
of the Currency shall continue to serve as members of the Board
until February 1, 1936. In selecting the members of the Board,
not more than one of whom shall be selected from any one
Federal Reserve district, the President shall have due regard
to a fair representation of the financial, agricultural,
industrial, and commercial interests, and geographical
divisions of the country. In selecting members of the Board,
the President shall appoint at least 1 member with demonstrated
primary experience working in or supervising community banks
having less than $10,000,000,000 in total assets. The members
of the Board shall devote their entire time to the business of
the Board and shall each receive an annual salary of $15,000,
payable monthly, together with actual necessary traveling
expenses.
The members of the Board shall be ineligible during the time
they are in office and for two years thereafter to hold any
office, position, or employment in any member bank, except that
this restriction shall not apply to a member who has served the
full term for which he was appointed. Upon the expiration of
the term of any appointive member of the Federal Reserve Board
in office on the date of enactment of the Banking Act of 1935,
the President shall fix the term of the successor to such
member at not to exceed fourteen years, as designated by the
President at the time of nomination, but in such manner as to
provide for the expiration of the term of not more than one
member in any two-year period, and thereafter each member shall
hold office for a term of fourteen years from the expiration of
the term of his predecessor, unless sooner removed for cause by
the President. Of the persons thus appointed, 1 shall be
designated by the President, by and with the advice and consent
of the Senate, to serve as Chairman of the Board for a term of
4 years, and 2 shall be designated by the President, by and
with the advice and consent of the Senate, to serve as Vice
Chairmen of the Board, each for a term of 4 years, 1 of whom
shall serve in the absence of the Chairman, as provided in the
fourth undesignated paragraph of this section, and 1 of whom
shall be designated Vice Chairman for Supervision. The Vice
Chairman for Supervision shall develop policy recommendations
for the Board regarding supervision and regulation of
depository institution holding companies and other financial
firms supervised by the Board, and shall oversee the
supervision and regulation of such firms. The chairman of the
Board, subject to its supervision, shall be its active
executive officer. Each member of the Board shall within
fifteen days after notice of appointment make and subscribe to
the oath of office. Upon the expiration of their terms of
office, members of the Board shall continue to serve until
their successors are appointed and have qualified. Any person
appointed as a member of the Board after the date of enactment
of the Banking Act of 1935 shall not be eligible for
reappointment as such member after he shall have served a full
term of fourteen years.
The Board of Governors of the Federal Reserve System shall
have power to levy semiannually upon the Federal reserve banks,
in proportion to their capital stock and surplus, an assessment
sufficient to pay its estimated expenses and the salaries of
its members and employees for the half year succeeding the
levying of such assessment, together with any deficit carried
forward from the preceding half year, and such assessments may
include amounts sufficient to provide for the acquisition by
the Board in its own name of such site or building in the
District of Columbia as in its judgment alone shall be
necessary for the purpose of providing suitable and adequate
quarters for the performance of its functions. After September
1, 2000, the Board may also use such assessments to acquire, in
its own name, a site or building (in addition to the facilities
existing on such date) to provide for the performance of the
functions of the Board. After approving such plans, estimates,
and specifications as it shall have caused to be prepared, the
Board may, notwithstanding any other provision of law, cause to
be constructed on any site so acquired by it a building or
buildings suitable and adequate in its judgment for its
purposes and proceed to take all such steps as it may deem
necessary or appropriate in connection with the construction,
equipment, and furnishing of such building or buildings. The
Board may maintain, enlarge, or remodel any building or
buildings so acquired or constructed and shall have sole
control of such building or buildings and space therein.
The principal offices of the Board shall be in the District
of Columbia. At meetings of the Board the chairman shall
preside, and, in his absence, the vice chairman shall preside.
In the absence of the chairman and the vice chairman, the Board
shall elect a member to act as chairman pro tempore. The Board
shall determine and prescribe the manner in which its
obligations shall be incurred and its disbursements and
expenses allowed and paid, and may leave on deposit in the
Federal Reserve banks the proceeds of assessments levied upon
them to defray its estimated expenses and the salaries of its
members and employees, whose employment, compensation, leave,
and expenses shall be governed solely by the provisions of this
Act, specific amendments thereof, and rules and regulations of
the Board not inconsistent therewith; and funds derived from
such assessments shall not be construed to be Government funds
or appropriated moneys. No member of the Board of Governors of
the Federal Reserve System shall be an officer or director of
any bank, banking institution, trust company, or Federal
Reserve bank or hold stock in any bank, banking institution, or
trust company; and before entering upon his duties as a member
of the Board of Governors of the Federal Reserve System he
shall certify under oath that he has complied with this
requirement, and such certification shall be filed with the
secretary of the Board. Whenever a vacancy shall occur, other
than by expiration of term, among the six members of the Board
of Governors of the Federal Reserve System appointed by the
President as above provided, a successor shall be appointed by
the President, by and with the advice and consent of the
Senate, to fill such vacancy, and when appointed he shall hold
office for the unexpired term of his predecessor.
The President shall have power to fill all vacancies that
may happen on the Board of Governors of the Federal Reserve
System during the recess of the Senate by granting commissions
which shall expire with the next session of the Senate.
Nothing in this Act contained shall be construed as taking
away any powers heretofore vested by law in the Secretary of
the Treasury which relate to the supervision, management, and
control of the Treasury Department and bureaus under such
department, and wherever any power vested by this Act in the
Board of Governors of the Federal Reserve System or the Federal
reserve agent appears to conflict with the powers of the
Secretary of the Treasury, such powers shall be exercised
subject to the supervision and control of the Secretary.
The Board of Governors of the Federal Reserve System shall
annually make a full report of its operations to the Speaker of
the House of Representatives, who shall cause the same to be
printed for the information of the Congress. The report
required under this paragraph shall include the reports
required under section 707 of the Equal Credit Opportunity Act,
section 18(f)(7) of the Federal Trade Commission Act, section
114 of the Truth in Lending Act, and the tenth undesignated
paragraph of this section.
* * * * * * *
No Federal Reserve bank may authorize the acquisition or
construction of any branch building, or enter into any contract
or other obligation for the acquisition or construction of any
branch building, without the approval of the Board.
The Board of Governors of the Federal Reserve System shall
keep a complete record of the action taken by the Board and by
the Federal Open Market Committee upon all questions of policy
relating to open-market operations and shall record therein the
votes taken in connection with the determination of open-market
policies and the reasons underlying the action of the Board and
the Committee in each instance. The Board shall keep a similar
record with respect to all questions of policy determined by
the Board, and shall include in its annual report to the
Congress a full account of the action so taken during the
preceding year with respect to open-market policies and
operations and with respect to the policies determined by it
and shall include in such report a copy of the records required
to be kept under the provisions of this paragraph.
[(12)] (11) Appearances before congress.--The Vice
Chairman for Supervision shall appear before the
Committee on Banking, Housing, and Urban Affairs of the
Senate and the Committee on Financial Services of the
House of Representatives and at semi-annual hearings
regarding the efforts, activities, objectives, and
plans of the Board with respect to the conduct of
supervision and regulation of depository institution
holding companies and other financial firms supervised
by the Board.
(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
(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.
[Section 2(2) of H.R. 3390 (as reported) provides for an
amendment to section 10 of the Federal Reserve Act by inserting
after paragraph (11) as redesignated a new paragraph (12).
Subparagraph (G) of paragraph (12) provides ``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.'' On such date,
paragraph (12) of section 10 (represented below in roman
typeface) is repealed as follows:]
* * * * * * *
[(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
[(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. ]
* * * * * * *
[all]