SenateS. 5465119th Congress
Bringing the Discount Window into the 21st Century Act
Full Text
Official text as published. Use Ctrl+F / Cmd+F to search within the document.
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 5465 Introduced in Senate (IS)]
<DOC>
119th CONGRESS
2d Session
S. 5465
To amend the Federal Reserve Act to require the Board of Governors of
the Federal Reserve System to carry out a review of discount window
operations and to implement improvements to such operations, and for
other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
September 23, 2026
Ms. Cortez Masto (for herself and Mr. Rounds) introduced the following
bill; which was read twice and referred to the Committee on Banking,
Housing, and Urban Affairs
_______________________________________________________________________
A BILL
To amend the Federal Reserve Act to require the Board of Governors of
the Federal Reserve System to carry out a review of discount window
operations and to implement improvements to such operations, and for
other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Bringing the Discount Window into
the 21st Century Act''.
SEC. 2. REVIEW OF DISCOUNT WINDOW OPERATIONS.
(a) In General.--Section 10 of the Federal Reserve Act (12 U.S.C.
241 et seq.) is amended--
(1) by redesignating paragraph (12) as paragraph (11); and
(2) by adding at the end the following:
``(12) Review of discount window operations.--
``(A) In general.--The Board shall--
``(i) not later than 60 days after the date
of enactment of this paragraph, commence a
review of the discount window lending programs
of the Federal reserve banks; and
``(ii) not later than 240 days after the
date of enactment of this Act, complete the
review required under clause (i).
``(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;
``(iii) the effectiveness of cybersecurity
measures implemented with respect to discount
window operations;
``(iv) the effectiveness of communications
between Federal reserve banks, financial
institutions, the Board, the Federal Deposit
Insurance Corporation, the Comptroller of the
Currency, the Federal Housing Finance Agency,
and the Secretary of the Treasury regarding
discount window operations;
``(v) the effectiveness of the Board in
providing oversight of the discount window and
in ensuring consistent access to the discount
window across the Federal Reserve System;
``(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;
``(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 Federal reserve banks,
such as the Fedwire Funds Service and FedNow
Service;
``(viii) the impact of mobile banking and
instant communications technology on depositor
behavior and liquidity risk posed to financial
institutions, including how the discount window
can--
``(I) help financial institutions
better respond to rapid liquidity
shortfalls; and
``(II) prevent broader financial
instability; and
``(ix) the effectiveness of the discount
window in light of the stigma associated with
its usage, ways to reduce such stigma, and ways
to improve access, operational efficiency,
transparency, and timeliness of the process for
financial institutions seeking advances,
including on the pricing and other terms of
such advances.
``(C) Remediation plan.--After the Board completes
the review required by subparagraph (A), the Board, in
consultation with the Federal reserve banks, shall--
``(i) identify deficiencies with the
discount window and areas for enhancing
discount window effectiveness; and
``(ii) develop a written plan to remediate
the identified deficiencies and implement the
identified enhancements, which shall include--
``(I) an identification of actions
that will be taken to enhance discount
window effectiveness and remediate
identified deficiencies;
``(II) timelines and milestones for
implementing the plan and measures to
demonstrate how the implemented
improvements will be maintained on an
ongoing basis; and
``(III) measures of managing and
controlling any deficiencies and
current operations until the plan is
implemented in full.
``(D) Report to congress on review and plan.--
``(i) In general.--Not later than 365 days
after the date of enactment of this paragraph,
the Board shall submit to the Committee on
Financial Services of the House of
Representatives and the Committee on Banking,
Housing, and Urban Affairs of the Senate a
report containing--
``(I) the findings of the review
required by subparagraph (A); and
``(II) the remediation plan
required by subparagraph (C).
``(ii) Consultation.--Before submitting the
report required by clause (i), the Board
shall--
``(I) provide a copy of the
proposed report to the Comptroller of
the Currency, the Federal Deposit
Insurance Corporation, the Federal
Housing Finance Agency, and the
Secretary of the Treasury; and
``(II) provide the Comptroller of
the Currency, the Federal Deposit
Insurance Corporation, the Federal
Housing Finance Agency, and the
Secretary of the Treasury with an
opportunity to provide feedback on the
report.
``(iii) Testimony.--The Chairman of the
Board shall, at the semi-annual hearing
required under section 2B, testify with respect
to the contents of the report required under
this subparagraph.
``(E) Annual reports to congress.--
``(i) Reports by the board.--The Board
shall submit to the Committee on Financial
Services of the House of Representatives and
the Committee on Banking, Housing, and Urban
Affairs of the Senate an annual report
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).
``(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 in implementing the
remediation plan required by subparagraph (C).
``(F) Confidential report information.--Any report
required under this paragraph may contain a
confidential annex containing information that, if made
public, could--
``(i) impact monetary policy, financial
stability, or cybersecurity; or
``(ii) significantly endanger the financial
stability of any financial institution.''.
(b) Sunset.--
(1) In general.--Section 10 of the Federal Reserve Act (12
U.S.C. 241 et seq.) is amended by striking paragraph (12), as
added by subsection (a) of this section.
(2) Effective date.--The amendments made by paragraph (1)
shall take effect on the date on which the Board of Governors
of the Federal Reserve System notifies Congress and publishes
on a public website of the Board that the remediation plan
required under subparagraph (C) of paragraph (12) of section 10
of the Federal Reserve Act (12 U.S.C. 241 et seq.), as added by
subsection (a) of this section, has been fully implemented.
<all>