Summary#
This bill would add new transparency and reporting rules when a bank failure prompts a systemic-risk determination under the Federal Deposit Insurance Act. It requires two kinds of reports: one by the Government Accountability Office (GAO) and one by the failed bank’s federal banking agency. The broad goal is to give Congress more and faster information about why a systemically important bank failed and what regulators did.
- GAO reports: GAO must report to Congress within 60 days of the systemic-risk determination and again 180 days later. The GAO report must cover the basis for the determination; the purpose and likely effects of actions taken; any executive or board mismanagement; compensation practices; supervisory or regulatory shortcomings; actions by regulators and the Treasury; and other relevant entities or activities (for example auditors, rating agencies, underwriters, and emergency liquidity sources).
- Federal banking agency reports: The regulator for the failed insured depository institution must report to Congress within 90 days and again 210 days. The report must include, subject to redactions for personal data, relevant exam and inspection reports from the prior three years, material supervisory communications, any additional exam materials the agency thinks are relevant, and analyses of mismanagement, supervisory shortcomings, contributing dynamics, and recommendations to improve safety and soundness.
- Publication and protections: Agencies must publish as much of the report materials as possible. If an agency wants to omit materials from publication, it must consult the chairs and ranking members of the relevant House and Senate committees and, if it still withholds materials, provide them to those committees with a written explanation. Providing materials to Congress does not waive legal privileges or FOIA exemptions.
- Timing flexibility: An agency may extend a reporting deadline once by up to 60 days if it notifies Congress and explains why. Agencies may consolidate multiple required reports so long as timing rules are met.
- Rule of construction: The bill says nothing in the reporting requirements limits an agency’s authority to enforce laws or rules.
What it means for you#
- Banks / Insured depository institutions: Your regulator will have to produce and possibly publish more supervisory materials after a failure that triggers a systemic-risk determination. This could lead to public scrutiny of exam findings, communications, compensation practices, and board or executive conduct.
- Bank executives and boards: The bill requires agencies and GAO to examine and report on any mismanagement that contributed to failure. This could increase public and congressional visibility into executive and board decisions before a failure.
- Depositors and the public: Congress would receive more information sooner about why a systemically important bank failed and what actions were taken. Some of that information may be published, subject to redactions for personal data and other protections.
- Federal banking agencies (FDIC, OCC, Federal Reserve, etc.): Agencies will need to prepare detailed reports on short timelines, coordinate redactions and publication decisions, consult with congressional committee leaders about withheld materials, and possibly defend withholding decisions.
- Congress and oversight committees: Committees will receive GAO and agency reports and, in some cases, withheld materials with explanations. This gives Congress faster access to internal supervisory information after a systemically significant failure.
- Other private parties (auditors, rating agencies, underwriters): The GAO report specifically lists these groups as potential subjects of review, so their roles could be examined and included in reports.
Expenses#
No publicly available information.
- This bill will likely require staff time and resources at GAO and at federal banking agencies to compile, review, redact, publish, and explain materials on the required schedules.
- Agencies may incur legal review costs to protect privileges and FOIA exemptions, and technology or publication costs to release materials.
- The bill allows a one-time 60-day extension, which could reduce the need for emergency overtime but not eliminate reporting costs.
- There is no fiscal note or dollar estimate included in the provided material.
Proponents' View#
- The bill appears intended to increase transparency and accountability when the systemic-risk authority is used to resolve a failed bank.
- Supporters may argue it would give Congress timely, detailed information about causes of failure and regulator actions, helping oversight.
- The required reviews of executive and board conduct, compensation practices, and regulator shortcomings could help identify fixes to prevent similar failures.
- Publishing materials “to the fullest extent possible” could improve public understanding of how and why major bank failures occur.
- The bill preserves legal privileges and FOIA exemptions and explicitly preserves agencies’ enforcement authority, which may reassure some stakeholders.
Opponents' View#
- One concern is that the bill could force disclosure of sensitive supervisory information that harms confidentiality, market stability, or ongoing investigations even though some protections are preserved.
- The deadlines (60/180 days for GAO; 90/210 days for agencies) may be tight during a crisis and could divert staff from urgent stability tasks.
- Redacting and legal review to protect privileges and personal data could be time-consuming and costly; the bill does not provide funding or a cost estimate.
- The bill leaves open what counts as a “substantial public interest” for withholding publication; that could create disputes between agencies and Congress.
- Consolidation of reports is allowed only if timing rules are met, which could complicate multi-institution failures or coordinated reviews.
- It is unclear how private third parties (for example auditors or rating agencies) will be treated if materials involving them are released, and whether they could seek legal remedies.