Bringing the Discount Window into the 21st Century Act
- Bill Number
- H.R. 3390
- Origin Chamber
- House
- Congress
- 119th Congress, Session 2
- Policy Area
- Finance and Financial Sector
- Status
- Passed House
- Latest Action
- 2026-02-11: Received in the Senate and Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
- Last Updated
- 2026-05-02T19:06:20Z
AI-Generated Summary
Purpose
The legislation aims to modernize the Federal Reserve's "discount window," a short-term lending program that provides liquidity (cash access) to banks and financial institutions, especially during financial stress. It requires a comprehensive review and improvements to ensure the program is effective, efficient, and adaptable to modern technologies like mobile banking.
Key Provisions
- Review Requirement: The Board of Governors of the Federal Reserve System must begin a review of discount window operations within 60 days of enactment and complete it within 240 days. The review covers:
- Effectiveness in delivering liquidity to financial institutions, including during crises.
- Adequacy of technology infrastructure and communication methods for timely support.
- Strength of cybersecurity measures.
- Quality of coordination among Federal Reserve Banks, financial institutions, the Board, the Federal Deposit Insurance Corporation (FDIC, which insures bank deposits), the Comptroller of the Currency (a regulator of national banks), and the Treasury Secretary.
- Oversight by the Board to ensure consistent access across the Federal Reserve System.
- Interactions with other liquidity sources, like Federal Home Loan Banks (which provide funding to housing-related institutions).
- Operating hours and potential expansions, considering links to Federal Reserve payment systems (e.g., Fedwire for large transfers and FedNow for instant payments).
- Effects of mobile banking and instant communications on depositor behavior and bank liquidity risks, including how the discount window can address sudden shortfalls and prevent wider instability.
- Challenges from "stigma" (reluctance to use the program due to perceived weakness), and ways to improve access, efficiency, transparency, timeliness, pricing, and terms of loans.
- Remediation Plan: Post-review, the Board, in consultation with Federal Reserve Banks, must identify issues and enhancements, then create a written plan including:
- Specific actions to fix problems and boost effectiveness.
- Timelines, milestones, and ongoing maintenance measures.
- Interim controls for managing issues until full implementation.
- Reporting to Congress:
- A report due within 365 days detailing review findings and the remediation plan, shared first with the FDIC, Comptroller, and Treasury for feedback.
- The Board's Chair must testify on the report during semi-annual congressional hearings.
- Annual reports from the Board on effectiveness and progress, plus separate annual reports from the Board's Inspector General (an internal watchdog) on implementation.
- Reports may include confidential sections to protect monetary policy, financial stability, cybersecurity, or individual institutions.
- Repeal: The new requirements end once the Board notifies Congress and publicly confirms full implementation of the plan.
Significant Changes to Existing Law
This amends Section 10 of the Federal Reserve Act (the law establishing the Federal Reserve System) by adding a new subsection (12) focused on discount window review and improvement. It introduces mandatory timelines, detailed review criteria, a remediation framework, and ongoing reporting—none of which existed before—while redesignating an existing paragraph for organizational purposes. The provision self-repeals upon completion, making it a temporary mandate rather than a permanent addition.
Potential Impacts
- Government Agencies: Increases workload and accountability for the Federal Reserve Board and Banks through reviews, planning, and reporting; involves more coordination with FDIC, Comptroller of the Currency, and Treasury, potentially streamlining inter-agency efforts.
- Citizens: Indirectly benefits the public by aiming to strengthen financial stability, reducing risks of bank runs or crises that could affect savings, loans, and the economy; no direct impact on individuals unless they hold bank deposits.
- International Relations: Minimal direct effects, though enhanced U.S. financial resilience could indirectly support global stability, as the Federal Reserve's actions often influence international markets.
Main Stakeholders Affected
- Federal Reserve System: Board of Governors and Federal Reserve Banks bear the primary burden of review, planning, and implementation.
- Financial Institutions: Banks and other eligible entities gain from potential improvements in liquidity access, reduced stigma, and modernized operations.
- Regulators and Oversight Bodies: FDIC, Comptroller of the Currency, Treasury Secretary, and the Board's Inspector General provide input and monitor progress.
- Congress: House Committee on Financial Services and Senate Committee on Banking, Housing, and Urban Affairs receive reports and testimony, enhancing legislative oversight.
- Broader Financial Sector: Entities like Federal Home Loan Banks may see adjusted interactions with the discount window.
Notable Legal, Constitutional, or Political Implications
- Legal: Strengthens administrative accountability under the Federal Reserve Act without altering core monetary policy authority; allows confidential reporting to balance transparency with financial security, aligning with existing laws on sensitive economic data.
- Constitutional: No apparent conflicts; it supports Congress's enumerated power to regulate commerce and coin money (Article I, Section 8) by refining a key economic tool.
- Political: Promotes modernization in response to past financial crises (e.g., 2008), emphasizing technology and stigma reduction; the self-repeal and annual oversight could foster bipartisan support for efficiency, while requiring testimony enhances democratic transparency without imposing new penalties or mandates on private entities.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Rep. De La Cruz, Monica [R-TX-15]
Cosponsors (2)
Rep. Meuser, Daniel [R-PA-9], Rep. Lucas, Frank D. [R-OK-3]
Recent Actions
- 2026-02-11: Received in the Senate and Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
- 2026-02-09: Motion to reconsider laid on the table Agreed to without objection.
- 2026-02-09: On motion to suspend the rules and pass the bill, as amended Agreed to by voice vote.
- 2026-02-09: Passed/agreed to in House: On motion to suspend the rules and pass the bill, as amended Agreed to by voice vote.
- 2026-02-09: DEBATE - The House proceeded with forty minutes of debate on H.R. 3390.
- 2026-02-09: Considered under suspension of the rules. (consideration: CR H2076-2078; text: CR H2076-2077)
- 2026-02-09: Mr. Hill (AR) moved to suspend the rules and pass the bill, as amended.
- 2025-09-04: Placed on the Union Calendar, Calendar No. 191.
- 2025-09-04: Reported (Amended) by the Committee on Financial Services. H. Rept. 119-234.
- 2025-09-04: Reported (Amended) by the Committee on Financial Services. H. Rept. 119-234.
- 2025-07-23: Ordered to be Reported (Amended) by the Yeas and Nays: 48 - 1.
- 2025-07-23: Committee Consideration and Mark-up Session Held
- 2025-07-22: Committee Consideration and Mark-up Session Held
- 2025-05-14: Referred to the House Committee on Financial Services.
- 2025-05-14: Introduced in House
Bill Versions
- Bringing the Discount Window into the 21st Century Act — issued 2026-02-09 — PDF (10 pages)
- Bringing the Discount Window into the 21st Century Act — issued 2025-05-14 — PDF (7 pages)
- Bringing the Discount Window into the 21st Century Act — issued 2026-02-11 — PDF (9 pages)
- Bringing the Discount Window into the 21st Century Act — issued 2025-09-04 — PDF (12 pages)