Section 1 Short title
This Act may be cited as the “Stress Testing Accountability and Transparency Act”.
Stress Testing Accountability and Transparency Act
A BILL
To require the Board of Governors of the Federal Reserve System to issue rules to establish certain methodologies and scenarios used in stress testing, and for other purposes.
Sec. 2 Rulemaking related to stress capital buffer requirements
In general— Not later than 90 days after the date of the enactment of this section, the Board of Governors of the Federal Reserve System (in this Act referred to as the “Board”) shall issue a rule—
establishing the models, assumptions, formulas, and other decisional methodologies that are used to conduct any stress test pursuant to section 165(i) of the Financial Stability Act of 2010 (12 U.S.C. 5365(i)), including any such test that is used to determine any component or subcomponent of the stress capital buffer requirement for a covered company; and
to determine, where the Board has supervisory stress test results from two or more periodic analyses of a covered company, the covered company’s stress capital buffer requirement on the basis of supervisory stress test results from two or more periodic analyses of that covered company.
Changes— The Board may only make material changes to the methodologies established in the rule issued under subsection (a)(1) through notice and comment rulemaking.
No double-count— The Board shall ensure no double-count of capital requirements for the same risks in the stress capital buffer requirement and the risk-based capital requirements.
Definitions— In this section:
Covered company— The term “covered company” means a company to which section 225.8 of title 12, Code of Federal Regulations, or section 238.170 of title 12, Code of Federal Regulations, applies.
Stress capital buffer requirement— The term “stress capital buffer requirement” has the meaning given that term under—
section 225.8(d) of title 12, Code of Federal Regulations; and
section 238.170(d) of title 12, Code of Federal Regulations.
Rule of construction— Nothing in this section may be construed to imply that the Board is required to establish a stress capital buffer requirement for any bank holding company or any other company regulated by the Board.
Sec. 3 Rulemaking relating to stress testing
In general— Beginning in the first calendar year beginning after the date of the enactment of this section, the Board shall, not less than 60 days before conducting a stress test pursuant to section 165(i) of the Financial Stability Act of 2010, publicly disclose each scenario to be used in such stress test.
Prohibition— The Board may not, by rule or otherwise, subject any nonbank financial company or bank holding company to a climate-related stress test using the authority provided in section 165(i) of the Financial Stability Act of 2010.
Sec. 4 GAO report
In general— The Comptroller General of the United States shall, every 3 years, conduct a study and submit a report to the Congress with respect to the stress tests conducted by the Board under section 165(i) of the Financial Stability Act of 2010 in the 3 most recent calendar years.
Contents— The report submitted to the Congress under subsection (a) shall consider the effectiveness of the stress tests in evaluating—
the safety and soundness of the nonbank financial companies and bank holding companies subjected to stress tests; and
the stability of the United States financial system.