H.R.3716 - Systemic Risk Authority Transparency Act (119th Congress)
Summary
H.R.3716, the Systemic Risk Authority Transparency Act, aims to amend the Federal Deposit Insurance Act to enhance transparency regarding the use of systemic risk authority when winding up a failed insured depository institution. The bill 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. It also requires the appropriate Federal banking agency to submit reports to Congress disclosing relevant information about the failed institution.
Expected Effects
The likely effect of this bill is increased oversight and accountability in the handling of bank failures that pose a systemic risk. This includes greater scrutiny of the decisions made by regulators and the factors contributing to the failure of insured depository institutions. The bill also aims to provide more information to Congress and the public regarding these events.
Potential Benefits
- Increased transparency in the handling of bank failures.
- Enhanced accountability for regulators and bank executives.
- Improved understanding of the factors contributing to systemic risk.
- Potential for better regulatory practices and legislation to prevent future failures.
- Greater public awareness of the financial system's vulnerabilities.
Most Benefited Areas:
Potential Disadvantages
- Increased reporting requirements for federal banking agencies may create an additional burden.
- The review process could potentially delay necessary actions during a financial crisis.
- The consultation process regarding the omission of sensitive materials could become politicized.
- The act may not fully address the underlying causes of bank failures.
- Potential for information overload, making it difficult to identify key issues.
Constitutional Alignment
The bill aligns with the US Constitution by promoting transparency and accountability in government actions, particularly concerning financial stability. Article I, Section 8 grants Congress the power to regulate commerce and currency, which implicitly includes oversight of the banking system. The reporting requirements imposed by the bill serve to inform Congress in its exercise of these powers. The bill does not appear to infringe upon any specific constitutional rights or limitations.
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).