Systemic Risk Authority Transparency Act
Summary
The Systemic Risk Authority Transparency Act amends the Federal Deposit Insurance Act to enhance transparency regarding the use of systemic risk authority when winding up a failed insured depository institution. It mandates the Government Accountability Office (GAO) to review and report to Congress on determinations made under clause (i) of Section 13(c)(4)(G) of the Federal Deposit Insurance Act. The Act also requires the appropriate Federal banking agency to submit reports to Congress disclosing relevant information about failed insured depository institutions.
Expected Effects
This act will increase oversight and transparency in the handling of bank failures, particularly those involving systemic risk. It aims to provide Congress and the public with more information about the decisions and actions taken by regulatory agencies in response to such failures. Ultimately, it seeks to improve accountability and potentially prevent future mismanagement.
Potential Benefits
- Increased transparency in the handling of failed banks.
- Enhanced accountability of federal banking agencies.
- Improved oversight by Congress through GAO reviews and agency reports.
- Potential for better regulatory practices based on lessons learned from past failures.
- Greater public awareness of the factors contributing to bank failures.
Most Benefited Areas:
Potential Disadvantages
- Increased reporting requirements may create an additional burden for federal banking agencies.
- Potential for delays in resolving bank failures due to increased scrutiny.
- Risk of information overload for Congress and the public.
- Possible chilling effect on regulators' decision-making due to heightened oversight.
- Redactions of sensitive information may limit the usefulness of the reports.
Constitutional Alignment
The Act aligns with the principles of government transparency and accountability, which are implicit in the structure of the US Constitution. Article I, Section 8 grants Congress the power to regulate commerce and banking, and this Act serves as a mechanism for Congress to oversee the execution of those powers by federal agencies. The reporting requirements imposed on federal agencies are consistent with Congress's role in providing oversight of the executive branch.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).