Before the Financial Stability Oversight Council — the interagency body created after the 2008 crisis — could designate a U.S. nonbank financial company (think insurance giants, hedge funds, or large asset managers) for Federal Reserve supervision, it would first have to try less-drastic options. Specifically, it would need to determine, after consulting with the company and its primary regulator, that other measures (such as new safeguards or an internal plan from the company) would be insufficient. Supporters say it prevents heavy-handed designations; critics argue it could let genuinely risky firms slip through. Affects how regulators respond to the roughly two dozen nonbank firms large enough to potentially pose systemic risk — and the workers, investors, and policyholders connected to them.
Congressional Summary
Financial Stability Oversight Council Improvement Act of 2025This bill requires the Financial Stability Oversight Council, prior to determining that a U.S. nonbank financial company shall be supervised by the Federal Reserve Board and therefore subject to certain prudential standards, to first determine that certain alternative actions would not mitigate the threat the company may pose to U.S. financial stability.
Details
- Congress
- 119th
- Chamber
- Senate
- Status
- summarized
- Action
- Introduced in Senate
- Action Date
- 2025-12-18
- Date Added
- 2026-04-21
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