Bringing the Discount Window into the 21st Century Act
- Bill Number
- S. 5465
- Origin Chamber
- Senate
- Congress
- 119th Congress, Session 2
- Policy Area
- Finance and Financial Sector
- Status
- Introduced
- Latest Action
- 2026-09-23: Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
- Last Updated
- 2026-10-08T14:25:53Z
AI-Generated Summary
Purpose The legislation aims to update and improve the Federal Reserve's discount window lending programs, which provide short-term loans to banks and other financial institutions during normal operations and periods of financial stress. It requires a comprehensive review and the creation of a plan to address any identified weaknesses in these operations.
Key Provisions
- The Board of Governors of the Federal Reserve System must begin a review of discount window operations within 60 days of the bill's enactment and complete it within 240 days.
- The review must examine the effectiveness of liquidity provision, technology and communication systems, cybersecurity, inter-agency coordination, oversight consistency, interactions with other liquidity sources like Federal Home Loan Banks, operating hours, the effects of mobile banking on liquidity risks, and ways to reduce stigma around using the discount window.
- Following the review, the Board must create a written remediation plan with specific actions, timelines, milestones, and measures to maintain improvements.
- The Board must submit a report to Congress within 365 days detailing the review findings and remediation plan, after consulting with other agencies. The Chair must also testify about the report during required semi-annual hearings.
- Annual reports are required from the Board on ongoing effectiveness and progress, and from the Inspector General on implementation.
- Reports may include confidential sections to protect sensitive information related to monetary policy, financial stability, or cybersecurity.
- The new requirements end once the remediation plan is fully implemented, as notified by the Board.
Significant Changes to Existing Law This bill adds a new paragraph (12) to Section 10 of the Federal Reserve Act, introducing mandatory review, planning, and reporting requirements for discount window operations. It also includes a sunset clause that removes these requirements once the plan is complete, marking a temporary expansion of congressional oversight over Federal Reserve functions.
Potential Impacts
- On government agencies: It increases coordination and reporting obligations for the Federal Reserve Board, Federal Reserve Banks, FDIC, Office of the Comptroller of the Currency, Federal Housing Finance Agency, and Treasury Department.
- On citizens and the financial system: It could enhance the ability of banks to access emergency liquidity more efficiently, potentially reducing risks of broader financial instability during crises, though effects on everyday consumers would be indirect.
- On international relations: No direct impacts are outlined in the legislation.
Main Stakeholders Affected
- The Board of Governors of the Federal Reserve System and the Federal Reserve Banks.
- Financial institutions that use discount window services.
- Other federal regulators, including the FDIC, Office of the Comptroller of the Currency, Federal Housing Finance Agency, and Treasury Secretary.
- Congress, through required reports and testimony.
- The Inspector General of the Federal Reserve System.
Notable Legal, Constitutional, or Political Implications The bill strengthens congressional oversight of an independent federal agency by mandating reviews and reports, which could raise questions about the balance of authority between Congress and the Federal Reserve. It emphasizes transparency and accountability in monetary policy tools without altering the core structure of the Federal Reserve Act. The inclusion of a sunset provision limits the duration of these new mandates.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Sen. Cortez Masto, Catherine [D-NV]
Cosponsors (1)
Recent Actions
- 2026-09-23: Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
- 2026-09-23: Introduced in Senate
Bill Versions
- Bringing the Discount Window into the 21st Century Act — issued 2026-09-23 — PDF (9 pages)