A bipartisan bill sponsored on Jan. 17 by U.S. Sen. Mike Rounds (R-SD) aims to ramp up transparency and accountability within the Financial Stability Oversight Council (FSOC).
If enacted, the FSOC Improvement Act of 2024, S. 3601, which Sen. Rounds introduced alongside lead original cosponsor U.S. Sen. Kyrsten Sinema (I-AZ), would improve transparency and procedural fairness of the systemically important financial institutions (SIFI) designation process, according to a bill summary provided by the lawmakers.
“I believe the FSOC Improvement Act is a crucial step towards enhancing the effectiveness and transparency of our financial regulatory system,” Sen. Rounds said.
The senator pointed out that the SIFI designation is a blunt tool that comes with a significant increase in regulatory burden for individual companies.
“By allowing an affected institution to modify its business, structure or operations prior to the SIFI designation, we are creating a more resilient financial environment for the American people, fostering economic growth and stability,” said Sen. Rounds.
The legislation would codify 2019 guidance that requires the FSOC to determine whether systemic risks could be better addressed through means other than designating a financial institution as an SIFI, the summary says.
The bill also would require the council and its member agencies to report on crisis planning activities and potential threats, among other provisions.
“We’re fueling growth and creating careers for Arizonans while increasing transparency,” said Sen. Sinema.
S. 3601 has been referred to the U.S. Senate Banking, Housing, and Urban Affairs Committee for consideration.