YourVoice.Now Summary
Transparency & AccountabilityCorporate BenefitsEnvironmentHow the Fed grades big banks would become public — and climate risk tests would be off the table.
Transparency & Accountability
The Fed would have to write down the models, assumptions, and formulas it uses to grade big banks, and publish them as a rule. Today much of that math is not public.
Once those methods are set, the Fed could not make big changes to them quietly. It would have to propose the change and let the public respond first.
Each test uses a made-up bad economy, called a scenario. The Fed would have to release each one at least 60 days before running the test, starting the first full calendar year after the bill became law.
The Government Accountability Office, Congress's watchdog, would study the three most recent years of stress tests and report on whether they work. That report would repeat every three years.
Corporate Benefits
The Fed could not use its stress-test power to check whether banks or other large finance firms could handle climate-related losses. Its other stress tests would go on.
The extra cash cushion a big bank must hold comes out of its test score. Where the Fed has results from two or more test rounds, it would have to use more than one, so the number moves less from year to year.
Big banks face two separate cash-cushion rules. The Fed would have to make sure the same risk is not charged under both at once.
Environment
A climate-related stress test would ask whether a bank could handle losses tied to climate change, such as storm damage or a move away from fossil fuels. The Fed would be barred from running one.
More about this bill
Nothing here would change your bank account, your fees, or your paperwork. The Federal Reserve tests whether big banks could survive a bad economy. Right now, much of how the Fed grades them stays private. Within 90 days, the Fed would have to publish those models and methods in a rule. Later changes to the methods would need public notice and comment first. The Fed would also have to release each test scenario at least 60 days early. Other parts would change the tests themselves. The Fed could no longer run climate-related stress tests on banks or other finance firms. The cash cushion a big bank must hold would be set from more than one year of test results. And the Fed could not count the same risk twice when setting that cushion. A government watchdog would review the whole program every three years.
Congressional Summary
This bill requires the Federal Reserve Board to make public certain details concerning annual stress tests performed by the board and prohibits certain stress test practices. (Stress tests assess a financial institution’s response to a hypothetical disruptive economic event. The board sets an institution’s capital requirements or stress capital buffer based on the results.) Specifically, the bill requires the board to issue a rule that establishes the models, assumptions, and methods used by the board to perform annual stress tests on certain nonbank financial companies and large bank holding companies. The board must also issue a rule determining the stress capital buffer requirement for certain companies that have at least two results from periodic stress tests. In addition, the board must disclose annually each scenario to be used in stress testing.Further, the board is prohibited from materially changing stress test methodologies outside of the rulemaking process. The board must also ensure that stress capital buffer requirements and risk-based capital requirements do not contain capital requirements for the same risks. The board is also prohibited from performing climate-related stress tests. The Government Accountability Office must report on the effectiveness of the stress tests every three years.
Details
- Congress
- 119th
- Chamber
- Status
- summarized
- Action
- Action Date
- Date Added
- 2026-04-02
- Source
- Congress.gov →
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