Systemic Risk Authority Transparency Act
- Bill Number
- H.R. 3716
- Origin Chamber
- House
- Congress
- 119th Congress, Session 1
- Policy Area
- Finance and Financial Sector
- Status
- Passed House
- Latest Action
- 2025-12-02: 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 Systemic Risk Authority Transparency Act (H.R. 3716) aims to increase transparency and accountability in how U.S. banking regulators handle the failure of insured banks (depository institutions protected by federal deposit insurance) when using a special "systemic risk" exception. This exception allows regulators to take extraordinary actions, like protecting uninsured deposits, to prevent broader financial instability. The law requires detailed reports to Congress to explain decisions, identify causes of failures, and suggest improvements.
Key Provisions
- GAO Review and Reporting:
- The Government Accountability Office (GAO, an independent agency that audits government operations) must review any systemic risk determination made by regulators.
- Reports to Congress are required within 60 days of the determination and again 180 days later.
- Reports cover: the reasons for the decision; purposes of actions taken; effects on bank behavior and uninsured depositors (those with deposits over the insured limit, typically $250,000); executive and board mismanagement; compensation practices; regulatory shortcomings; actions by federal regulators, the Financial Stability Oversight Council (a group monitoring financial risks), Treasury Department, and others; and contributions from auditors, credit rating agencies, investment banks, or emergency lending programs like Federal Reserve loans.
- Federal Banking Agency Reporting:
- The relevant federal banking agency (e.g., FDIC for most banks, or others like the Federal Reserve for specific institutions) must submit reports to Congress within 90 days of a systemic risk determination and again 210 days later.
- Reports include (with redactions for personal or sensitive financial data): recent examination reports and supervisory communications from the prior 3 years; analysis of executive/board mismanagement; the agency's own regulatory failures; factors contributing to the failure; and recommendations to enhance bank safety, the overall banking system, and financial stability.
- Agencies must publish report materials publicly as much as possible, but can withhold sensitive items after consulting congressional committees (House Financial Services and Senate Banking, Housing, and Urban Affairs). Withheld items go to Congress with explanations.
- Deadlines can be extended by 60 days if financial stability requires it, with congressional notification. Reports can be combined if timing aligns.
- Protections ensure sharing information does not waive legal privileges (e.g., attorney-client confidentiality) or Freedom of Information Act exemptions.
- General Rules:
- These requirements do not limit regulators' ability to enforce laws or rules.
- The act amends the Federal Deposit Insurance Act (the main law governing bank insurance and failures).
Significant Changes to Existing Law
- Expands the GAO's role under Section 13(c)(4)(G)(iv) of the Federal Deposit Insurance Act by mandating more comprehensive, timed reviews and reports, beyond what was previously required.
- Adds a new subsection (13(c)(12)) requiring banking agencies to disclose internal documents and self-assessments, which were not previously mandated for public or congressional review in this context.
- Introduces publication and consultation requirements to balance transparency with protecting sensitive information, a step up from prior limited disclosures during bank resolutions.
Potential Impacts
- On Government Agencies: Increases workload for GAO and banking agencies (e.g., FDIC, Federal Reserve) in preparing detailed reports, potentially leading to more internal scrutiny and policy adjustments to avoid criticism. Could foster better coordination among regulators like the Treasury and Financial Stability Oversight Council.
- On Citizens and the Economy: Enhances public understanding of bank failures, reasons for using taxpayer funds (via deposit insurance), and protections for depositors. May deter risky bank practices by highlighting mismanagement, indirectly benefiting savers and the broader economy through stronger financial stability.
- On International Relations: Minimal direct impact, though greater transparency in U.S. bank resolutions could influence global investor confidence in the U.S. financial system.
Main Stakeholders Affected
- Federal Regulators: Banking agencies, GAO, Financial Stability Oversight Council, and Treasury Department, who must produce and share reports.
- Banks and Financial Institutions: Insured depository institutions, their executives, boards, auditors, credit rating agencies, and investment banks, subject to scrutiny of practices and failures.
- Congress: Receives reports and can use them for oversight, legislation, or investigations.
- Depositors and Taxpayers: Uninsured depositors gain insights into protections; all citizens benefit from potential improvements in bank safety, as failures can affect the economy and public funds.
- Other Entities: Emergency lenders like Federal Reserve Banks and Federal Home Loan Banks, whose roles in crises may be examined.
Notable Legal, Constitutional, or Political Implications
- Legal: Strengthens enforcement by preserving regulators' privileges and authorities while mandating disclosures, potentially aiding future lawsuits or audits without compromising ongoing investigations. No waivers of existing legal protections.
- Constitutional: Aligns with Congress's oversight powers under Article I (spending and regulation of commerce), promoting accountability in federal financial programs without infringing on executive branch functions.
- Political: Encourages bipartisan scrutiny of financial crises (e.g., inspired by events like the 2023 bank failures), potentially pressuring regulators for reforms. Could reduce moral hazard (where banks take risks expecting bailouts) but might face resistance from agencies concerned about operational burdens or revealing weaknesses.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Recent Actions
- 2025-12-02: Received in the Senate and Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
- 2025-12-01: Motion to reconsider laid on the table Agreed to without objection.
- 2025-12-01: On motion to suspend the rules and pass the bill, as amended Agreed to by voice vote. (text: CR H4947)
- 2025-12-01: Passed/agreed to in House: On motion to suspend the rules and pass the bill, as amended Agreed to by voice vote. (text: CR H4947)
- 2025-12-01: DEBATE - The House proceeded with forty minutes of debate on H.R. 3716.
- 2025-12-01: Considered under suspension of the rules. (consideration: CR H4947-4948)
- 2025-12-01: Mr. Davidson moved to suspend the rules and pass the bill, as amended.
- 2025-07-15: Placed on the Union Calendar, Calendar No. 169.
- 2025-07-15: Reported (Amended) by the Committee on Financial Services. H. Rept. 119-206.
- 2025-07-15: Reported (Amended) by the Committee on Financial Services. H. Rept. 119-206.
- 2025-06-10: Ordered to be Reported (Amended) by the Yeas and Nays: 51 - 0.
- 2025-06-10: Committee Consideration and Mark-up Session Held
- 2025-06-04: Referred to the House Committee on Financial Services.
- 2025-06-04: Introduced in House
- 2025-06-04: Introduced in House
Bill Versions
- Systemic Risk Authority Transparency Act — issued 2025-12-01 — PDF (12 pages)
- Systemic Risk Authority Transparency Act — issued 2025-06-04 — PDF (9 pages)
- Systemic Risk Authority Transparency Act — issued 2025-12-02 — PDF (10 pages)
- Systemic Risk Authority Transparency Act — issued 2025-07-15 — PDF (12 pages)