H.R. 3390 — what changed

Section 10 of the Federal Reserve Act (12 U.S.C. 241 et seq.) is amended—

“(12) Review of discount window operations

“(A) In general—Not later than 60 days after the date of enactment of this paragraph, the Board of Governors shall commence a review of the discount window lending programs of the Federal reserve banks (the “discount window”), and shall complete such review not later than 240 days after the date of enactment of this paragraph.

“(B) Contents—The review required by subparagraph (A) shall include a consideration of—

“(i) the effectiveness of the discount window in providing liquidity to financial institutions, including in times of financial stress;

“(ii) whether the technology infrastructure, including means of communications, are sufficient to support the timely provision of liquidity, including in times of financial stress;

changed “(iii) the effectiveness of cybersecurity measures;measures implemented with respect to discount window operations;

changed “(iv) the effectiveness of communications between Federal reserve banks banks, financial institutions, the Board of Governors, the Federal Deposit Insurance Corporation, the Comptroller of the Currency, and the Secretary of the Treasury regarding discount window operations;

changed “(v) the effectiveness of the Board of Governors in providing oversight of the discount window;window and in ensuring consistent access to the discount window across the Federal Reserve System;

changed “(vi) how the discount window interacts with other providers of liquidity, including the Federal Home Loan Banks, during both normal operations and times of financial distress; anddistress;

changed “(vii) the effectiveness of existing discount window operating hours and whether such hours should be expanded, taking into account the interaction between discount window operating hours and the operating hours of payment systems of the Board of Governors and Federal reserve banks, such as FedWire the Fedwire Funds Service and FedNow.FedNow Service;

changed “(C) Public comment—In carrying out the review required by subparagraph (A), “(viii) the Board impact of Governors shall provide the public with an opportunity to comment mobile banking and instant communications technology on depositor behavior and liquidity risk posed to financial institutions, including how the effectiveness of discount window operations and to offer suggestions for improving operations.can—

changed “(D) Remediation plan—After completing the review required by subparagraph (A) and considering any public comments received pursuant to subparagraph (C), the Board of Governors shall develop, and approve by a vote of the Board of Governors, a written plan “(I) help financial institutions better respond to remediate any identified deficiencies or areas for enhancing effectiveness of the discount window, which shall include—rapid liquidity shortfalls; and

changed “(i) an identification of actions that the Board of Governors will take to remediate those deficiencies;“(II) prevent broader financial instability; and

changed “(ii) timelines and milestones for implementing “(ix) the plan effectiveness of the discount window in light of the stigma associated with its usage, ways to reduce such stigma, and measures ways to demonstrate how the Board improve access, operational efficiency, transparency, and timeliness of Governors will maintain implemented improvements the process for financial institutions seeking advances, including on an ongoing basis; andthe pricing and other terms of such advances.

changed “(iii) measures “(C) Remediation plan—After the Board of managing and controlling deficiencies until Governors completes the plan is implemented review required by subparagraph (A), the Board of Governors, in full.consultation with the Federal reserve banks, shall—

changed “(E) Report to Congress on review “(i) identify deficiencies with the discount window and planareas for enhancing discount window effectiveness; and

changed “(i) In general—Not later than 365 days after the date of enactment of this paragraph, the Board of Governors shall, after approval by a vote of the Board of Governors, submit “(ii) develop a report written plan to the Committee on Financial Services of the House of Representatives and remediate the Committee on Banking, Housing, identified deficiencies and Urban Affairs of implement the Senate containing—identified enhancements, which shall include—

added “(I) an identification of actions that will be taken to enhance discount window effectiveness and remediate identified deficiencies;

added “(II) timelines and milestones for implementing the plan and measures to demonstrate how the implemented improvements will be maintained on an ongoing basis; and

added “(III) measures of managing and controlling any deficiencies and current operations until the plan is implemented in full.

added “(D) Report to Congress on review and plan

added “(i) In general—Not later than 365 days after the date of enactment of this paragraph, the Board of Governors shall submit a report to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate containing—

“(I) the findings of the review required by subparagraph (A); and

added “(II) the remediation plan required by subparagraph (C).

removed “(II) the remediation plan required by subparagraph (D).

“(ii) Consultation—Before submitting the report required by clause (i), the Board of Governors shall—

removed “(I) provide a copy of the proposed report to the Comptroller General of the United States and the Inspector General of the Board of Governors of the Federal Reserve System and the Bureau of Consumer Financial Protection; and

removed “(II) provide the Comptroller General and Inspector General with an opportunity to provide feedback on the report.

removed “(iii) Testimony—The Chairman of the Board of Governors shall testify before the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate with respect to the contents of the report required under this subparagraph.

removed “(F) Annual reports to Congress

removed “(i) Reports by the Board—The Board of Governors shall submit an annual report to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate containing a review of the effectiveness of discount window operations.

changed “(ii) Reports by the Inspector General—The Inspector General of the Board of Governors “(I) provide a copy of the Federal Reserve System and the Bureau of Consumer Financial Protection shall submit an annual proposed report to the Committee on Financial Services Comptroller of the House of Representatives and Currency, the Committee on Banking, Housing, Federal Deposit Insurance Corporation, and Urban Affairs of the Senate containing a report on the progress of the Board Secretary of Governors in implementing the remediation plan required by subparagraph (D).Treasury; and

changed “(G) Confidential report information—Any report required under this paragraph may contain a confidential annex containing information that details any cybersecurity deficiencies or any deficiencies which, if made public, could cause financial instability.”“(II) provide the Comptroller of the Currency, the Federal Deposit Insurance Corporation, and the Secretary of the Treasury with an opportunity to provide feedback on the report.

added “(iii) Testimony—The Chairman of the Board of Governors shall, at the semi-annual hearing required under section 2B, testify with respect to the contents of the report required under this subparagraph.

added “(E) Annual reports to Congress

added “(i) Reports by the Board—The Board of Governors shall submit an annual report to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate containing a review of the effectiveness of discount window operations and a progress report on the actions taken to implement the identified enhancements described in subparagraph (C).

added “(ii) Reports by the Inspector General—The Inspector General of the Board of Governors of the Federal Reserve System and the Bureau of Consumer Financial Protection shall submit an annual report to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate containing a report on the progress of the Board of Governors in implementing the remediation plan required by subparagraph (C).

added “(F) Confidential report information—Any report required under this paragraph may contain a confidential annex containing information that, if made public, could—

added “(i) impact monetary policy, financial stability, or cybersecurity; or

added “(ii) significantly endanger the financial stability of any financial institution.

added “(G) Repeal—This paragraph shall be repealed on the date on which the Board of Governors notifies the Congress and publishes on a public website of the Board of Governors that the remediation plan required under subparagraph (C) has been fully implemented.”