Systemic Risk Authority Transparency Act

IB Union Calendar No. 512 118TH CONGRESS 2D SESSION H. R. 4116 [Report No. 118–614] To amend the Federal Deposit Insurance Act to require reports on the use of the systemic risk authority applicable to winding up a failed insured depository institution, and for other purposes. IN THE HOUSE OF REPRESENTATIVES JUNE 14, 2023 Mr. GREEN of Texas (for himself, Mr. SHERMAN, and Mrs. BEATTY) intro- duced the following bill; which was referred to the Committee on Finan- cial Services JULY 30, 2024 Reported with an amendment, committed to the Committee of the Whole House on the State of the Union, and ordered to be printed [Strike out all after the enacting clause and insert the part printed in italic] [For text of introduced bill, see copy of bill as introduced on June 14, 2023] VerDate Sep 11 2014 20:46 Jul 30, 2024 Jkt 049200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6652 E:\BILLS\H4116.RH H4116 ssavage on LAPJG3WLY3PROD with BILLS 2 •HR 4116 RH A BILL To amend the Federal Deposit Insurance Act to require reports on the use of the systemic risk authority applica- ble to winding up a failed insured depository institution, and for other purposes. VerDate Sep 11 2014 20:46 Jul 30, 2024 Jkt 049200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6652 E:\BILLS\H4116.RH H4116 ssavage on LAPJG3WLY3PROD with BILLS 3 •HR 4116 RH Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Systemic Risk Authority 4 Transparency Act’’. 5 SEC. 2. BANK FAILURE TRANSPARENCY RELATED TO SYS- 6 TEMIC RISK EXCEPTION. 7 (a) GAO REVIEW.—Section 13(c)(4)(G)(iv) of the Fed- 8 eral Deposit Insurance Act (12 U.S.C. 1823(c)(4)(G)(iv)) 9 is amended to read as follows: 10 ‘‘(iv) GAO REVIEW.— 11 ‘‘(I) IN GENERAL.—The Comp- 12 troller General of the United States 13 shall, not later than later than 60 days 14 after a determination is made under 15 clause (i), and again 180 days there- 16 after, review and report to the Congress 17 on the determination under clause (i), 18 including— 19 ‘‘(aa) the basis for the deter- 20 mination; 21 ‘‘(bb) the purpose for which 22 any action was taken pursuant to 23 such clause; 24 VerDate Sep 11 2014 20:46 Jul 30, 2024 Jkt 049200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6203 E:\BILLS\H4116.RH H4116 ssavage on LAPJG3WLY3PROD with BILLS 4 •HR 4116 RH ‘‘(cc) the likely effect of the 1 determination and such action on 2 the incentives and conduct of in- 3 sured depository institutions and 4 uninsured depositors; 5 ‘‘(dd) any mismanagement 6 by the executives and board of the 7 insured depository institution 8 that contributed to the failure of 9 the insured depository institution; 10 ‘‘(ee) a review of the com- 11 pensation practices of the insured 12 depository institution; 13 ‘‘(ff) any supervisory or reg- 14 ulatory shortcomings with respect 15 to the appropriate Federal bank- 16 ing agency of the insured deposi- 17 tory institution; 18 ‘‘(gg) any actions taken by 19 the Federal banking regulators, 20 Financial Stability Oversight 21 Council, Treasury Department, 22 and other relevant financial regu- 23 lators in relation to the failure of 24 VerDate Sep 11 2014 20:46 Jul 30, 2024 Jkt 049200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6203 E:\BILLS\H4116.RH H4116 ssavage on LAPJG3WLY3PROD with BILLS 5 •HR 4116 RH the insured depository institution; 1 and 2 ‘‘(hh) any additional rel- 3 evant entities or activities that 4 may have contributed to the fail- 5 ure of the insured depository in- 6 stitution, including with respect 7 to auditing, accounting, credit 8 rating agencies, investment bank 9 underwriters, and emergency li- 10 quidity options such as loans 11 from the Federal reserve banks or 12 advances through the Federal 13 Home Loan Bank system. 14 ‘‘(II) RULE OF CONSTRUCTION.— 15 Nothing in this clause or a report 16 issued pursuant to this clause may be 17 construed to limit the authority of a 18 Federal agency to enforce violations of 19 Federal statutes, rules, or orders.’’. 20 (b) APPROPRIATE FEDERAL BANKING AGENCY RE- 21 PORT.—Section 13(c) of the Federal Deposit Insurance Act 22 (12 U.S.C. 1823(c)) is amended by adding at the end the 23 following: 24 VerDate Sep 11 2014 20:46 Jul 30, 2024 Jkt 049200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6203 E:\BILLS\H4116.RH H4116 ssavage on LAPJG3WLY3PROD with BILLS 6 •HR 4116 RH ‘‘(12) APPROPRIATE FEDERAL BANKING AGENCY 1 REPORT.— 2 ‘‘(A) IN GENERAL.—The appropriate Fed- 3 eral banking agency of an insured depository in- 4 stitution about which a determination is made 5 under paragraph (4)(G)(i) shall, not later than 6 90 days after the date of such determination, 7 and again 210 days thereafter, submit a report 8 to the Congress that discloses the following: 9 ‘‘(i) Subject to such redactions as the 10 appropriate Federal banking agency deter- 11 mines appropriate of personally identifiable 12 information about customers and other fi- 13 nancial institutions (as such term is defined 14 under section 11(e)(9)(D)), all— 15 ‘‘(I) reports of examination and 16 inspection that relate to the failed in- 17 sured depository institution in the pre- 18 vious 3-year period; 19 ‘‘(II) formal communications of a 20 material supervisory determination 21 conveyed to the failed insured deposi- 22 tory institution in the previous 3-year 23 period; and 24 VerDate Sep 11 2014 20:46 Jul 30, 2024 Jkt 049200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6203 E:\BILLS\H4116.RH H4116 ssavage on LAPJG3WLY3PROD with BILLS 7 •HR 4116 RH ‘‘(III) any additional exam re- 1 ports and correspondence that the ap- 2 propriate Federal banking agency de- 3 termines may be relevant to the failure 4 of the insured depository institution. 5 ‘‘(ii) An examination of any mis- 6 management by the executives and board of 7 the insured depository institution that con- 8 tributed to the failure of the insured deposi- 9 tory institution. 10 ‘‘(iii) Any supervisory or regulatory 11 shortcomings by such appropriate Federal 12 banking agency with respect to the insured 13 depository institution. 14 ‘‘(iv) Any dynamics that the appro- 15 priate Federal banking agency determines 16 may have contributed to the failure of the 17 insured depository institution. 18 ‘‘(v) Any supervisory, regulatory, and 19 legislative recommendations such appro- 20 priate Federal banking agency may have to 21 improve the safety and soundness of simi- 22 larly situated insured depository institu- 23 tions, the banking system, and financial 24 stability. 25 VerDate Sep 11 2014 20:46 Jul 30, 2024 Jkt 049200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6203 E:\BILLS\H4116.RH H4116 ssavage on LAPJG3WLY3PROD with BILLS 8 •HR 4116 RH ‘‘(B) PROTECTION OF SENSITIVE INFORMA- 1 TION.— 2 ‘‘(i) EFFECT ON PRIVILEGE.—The pro- 3 vision of any information by a Federal 4 banking agency under this paragraph may 5 not be construed as— 6 ‘‘(I) waiving, destroying, or other- 7 wise affecting any privilege applicable 8 to the information; or 9 ‘‘(II) waiving any exemption ap- 10 plicable to the information under sec- 11 tion 552 of title 5 United States Code 12 (commonly known as the ‘Freedom of 13 Information Act’). 14 ‘‘(ii) TRANSPARENCY.— 15 ‘‘(I) IN GENERAL.—A Federal 16 banking agency shall publish materials 17 contained in a report required under 18 subparagraph (A) to the fullest extent 19 possible to promote transparency. 20 ‘‘(II) CONSULTATION ON OMITTING 21 MATERIALS.—If a Federal banking 22 agency determines particular materials 23 described under subclause (I) should 24 not be published, the Federal banking 25 VerDate Sep 11 2014 20:46 Jul 30, 2024 Jkt 049200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6203 E:\BILLS\H4116.RH H4116 ssavage on LAPJG3WLY3PROD with BILLS 9 •HR 4116 RH agency shall consult with the chair and 1 ranking member of the Committee on 2 Financial Services of the House of 3 Representatives and the chair and 4 ranking member of the Committee on 5 Banking, Housing, and Urban Affairs 6 of the Senate. 7 ‘‘(III) OMITTING MATERIALS.—If, 8 after the consultation required under 9 subclause (II), the Federal banking 10 agency determines there is a substan- 11 tial public interest in not publishing 12 such materials, the Federal banking 13 agency shall provide those materials to 14 the Committee on Financial Services of 15 the House of Representatives and the 16 Committee on Banking, Housing, and 17 Urban Affairs of the Senate with a 18 written explanation describing the rea- 19 sons for not publishing those materials. 20 ‘‘(iii) PRIVILEGE.—For purposes of 21 this subparagraph, the term ‘privilege’ in- 22 cludes any work-product, attorney-client, or 23 other privilege recognized under Federal or 24 State law. 25 VerDate Sep 11 2014 20:46 Jul 30, 2024 Jkt 049200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6203 E:\BILLS\H4116.RH H4116 ssavage on LAPJG3WLY3PROD with BILLS 10 •HR 4116 RH ‘‘(C) REPORT EXTENSION.—A Federal 1 banking agency may extend a deadline described 2 under subparagraph (A) for an additional 60 3 days, if the Federal banking agency— 4 ‘‘(i) faces ongoing circumstances that 5 require the Federal banking agency to 6 prioritize activities to promote stability of 7 the U.S. banking system; and 8 ‘‘(ii) notifies the Congress of such ex- 9 tension and the reasons for such extension. 10 ‘‘(D) CONSOLIDATED REPORTS.—A Federal 11 banking agency may consolidate multiple reports 12 required under this paragraph so long as the in- 13 dividual reports being consolidated all meet the 14 timing requirements under this paragraph. 15 ‘‘(E) RULE OF CONSTRUCTION.—Nothing in 16 this paragraph or reports or materials provided 17 pursuant to this paragraph may be construed to 18 limit the authority of a Federal agency to en- 19 force violations of Federal statutes, rules, or or- 20 ders.’’. 21 VerDate Sep 11 2014 20:46 Jul 30, 2024 Jkt 049200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6203 E:\BILLS\H4116.RH H4116 ssavage on LAPJG3WLY3PROD with BILLS VerDate Sep 11 2014 20:46 Jul 30, 2024 Jkt 049200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6203 E:\BILLS\H4116.RH H4116 ssavage on LAPJG3WLY3PROD with BILLS Union Calendar No. 512 118TH CONGRESS 2D SESSION H. R. 4116 [Report No. 118–614] A BILL To amend the Federal Deposit Insurance Act to re- quire reports on the use of the systemic risk au- thority applicable to winding up a failed insured depository institution, and for other purposes. JULY 30, 2024 Reported with an amendment, committed to the Com- mittee of the Whole House on the State of the Union, and ordered to be printed VerDate Sep 11 2014 20:46 Jul 30, 2024 Jkt 049200 PO 00000 Frm 00012 Fmt 6651 Sfmt 6651 E:\BILLS\H4116.RH H4116 ssavage on LAPJG3WLY3PROD with BILLS