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Financial Stability Oversight Council Improvement Act of 2025

Introduced 2025-06-03
H.R. 3682 (119th)Stage: In Committee
1
Show progress & status
60/100 · Moderate Contention40/100 · PassageLeans Right
Status: Placed on the Union Calendar, Calendar No. 316.

Summary & Impact

This bill amends Section 113 of the Financial Stability Act of 2010 to add a procedural requirement before the Financial Stability Oversight Council (FSOC) may vote to determine that a U.S. nonbank financial company should be supervised by the Federal Reserve. FSOC must first consult with the company and the company's primary financial regulator and determine that alternative actions (including new or heightened standards, safeguards under section 120, or a company-submitted written plan) are impracticable or insufficient to mitigate the threat to U.S. financial stability. The change is a pre-vote ‘‘initial determination’’ requirement and includes minor conforming subsection edits.
Perspective snapshot
Left30%
Center65%
Right85%
Where people disagree: Progressive emphasizes risk to rapid FSOC action and capture More
Risk snapshot
ScopeLOW
ComplexityLOW
SalienceMEDIUM
Fiscal/RegLOW
✓ Potential Benefits
  • Reduces immediate regulatory imposition on nonbank companies by requiring consideration of less intrusive alternatives before Federal Reserve supervision.HIGH
  • Increases formal consultation between FSOC, companies, and primary regulators, potentially improving information and transparency in designation decisions.HIGH
  • Encourages use of targeted supervisory measures or company remediation plans as alternatives to Board supervision.MEDIUM
  • May reduce compliance costs and capital requirements for some firms by avoiding Federal Reserve supervisory regime.LOW
  • Could preserve market confidence and credit availability by preventing abrupt regulatory escalations affecting firms' operations.LOW
⚠ Potential Concerns
  • Could delay urgent FSOC designations, reducing regulators' ability to respond quickly to emerging systemic risks.HIGH
  • Adds procedural requirements that could increase FSOC administrative workload and slow decision timelines.HIGH
  • Gives companies and primary regulators more leverage, potentially constraining independent FSOC determinations.MEDIUM
  • May increase moral hazard if firms avoid stronger supervision through negotiated alternative plans.MEDIUM
  • Could produce inconsistent outcomes if agencies apply different standards for alternative actions and safeguards.MEDIUM
What this means for you
  • Content is narrow and technical which helps prospects, but regulatory pushback and Senate consensus requirements create meaningful obstacles.
  • Narrow, administrative tweak with limited fiscal impact increases acceptability; some opposition possible from regulators and those favoring broad FSOC authority.
  • Senate procedural hurdles and higher consensus requirement make passage harder despite modest substance and low cost.
More detail
Caveats & assumptions (7)
  • Interpretation of 'impracticable or insufficient' by FSOC and courts is uncertain.
  • Timeline and procedural deadlines for consultation and written plans are unspecified in the amendment.
  • Extent to which primary regulators implement 'new or heightened standards' varies by agency and rulemaking.
  • Number of future designations may change depending on FSOC policy and risk assessments.
  • Market reactions to slower designations could be positive or negative, depending on context.
  • Administrative costs for FSOC to conduct consultations and determinations are uncertain.
  • Legal challenges may arise over sufficiency of consultation or alternative action evaluations.
Analyzed Jan 9, 2026•Based on: Reported in House @ 2025-11-04T05:00:00Z