FINANCIAL STABILITY OVERSIGHT COUNCIL IMPROVEMENT ACT OF 2025

On 2026-02-09, Representative Bill Foster (D-IL-11) delivered a floor speech titled "FINANCIAL STABILITY OVERSIGHT COUNCIL IMPROVEMENT ACT OF 2025" in the House. The speech addressed the economy and also covered taxes, trade policy. It referenced legislation: HR3682.

FINANCIAL STABILITY OVERSIGHT COUNCIL IMPROVEMENT ACT OF 2025

Congressional Record, Volume 172 Issue 27 (Monday, February 9, 2026) [Congressional Record Volume 172, Number 27 (Monday, February 9, 2026)] [House] [Pages H2074-H2076] From the Congressional Record Online through the Government Publishing Office [ www.gpo.gov ] FINANCIAL STABILITY OVERSIGHT COUNCIL IMPROVEMENT ACT OF 2025 Mr. HILL of Arkansas. Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 3682) to amend the Financial Stability Act of 2010 to require the Financial Stability Oversight Council to consider alternative approaches before determining that a U.S. nonbank financial company shall be supervised by the Board of Governors of the Federal Reserve System, and for other purposes, as amended. The Clerk read the title of the bill. The text of the bill is as follows: H.R. 3682 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 ``Financial Stability Oversight Council Improvement Act of 2025''. SEC. 2. FINANCIAL STABILITY OVERSIGHT COUNCIL. Section 113 of the Financial Stability Act of 2010 (12 U.S.C. 5323) is amended-- (1) in subsection (a)-- (A) in paragraph (1), by striking ``The Council'' and inserting ``Subject to paragraph (3), the Council''; and (B) by adding at the end the following: ``(3) Initial determination.--The Council may not vote on a proposed determination with respect to a U.S. nonbank financial company under paragraph (1) unless the Council first determines, in consultation with the company and the primary financial regulatory agency with respect to the company, that a different action by the Council or the agency (including the application of new or heightened standards and safeguards under section 120), or by the company under a written plan that is submitted promptly to the Council, is impracticable or insufficient to mitigate the threat that material financial distress at the company, or the nature, scope, size, scale, concentration, interconnectedness, or mix of the activities of the company, could pose to the financial stability of the United States.''; and (2) in subsection (f)(1), by striking ``subsection (e)'' and inserting ``subsections (a)(3) and (e)''. The SPEAKER pro tempore. Pursuant to the rule, the gentleman from Arkansas (Mr. Hill) and the gentlewoman from Ohio (Mrs. Beatty) each will control 20 minutes. The Chair recognizes the gentleman from Arkansas. General Leave Mr. HILL of Arkansas. Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days to revise and extend their remarks and include extraneous material on this measure. The SPEAKER pro tempore. Is there objection to the request of the gentleman from Arkansas? There was no objection. Mr. HILL of Arkansas. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I rise today in support of this fine bill offered by Mr. Foster and Mr. Huizenga. It is a bipartisan bill, Mr. Speaker, the Financial Stability Oversight Council Improvement Act, after a decade of collaboration across four Presidential administrations that has led to this consensus on this measure. The Financial Stability Oversight Council, FSOC, created in the aftermath of the global financial crisis, plays an important role in understanding and examining nonbanks, and that is because many nonbanks, large nonbanks, are not subject to the same regulations and supervision as traditional banks, so the Congress created this process. Unfortunately, its own structure, as composed by political appointees, can inhibit the Council's ability to effectively critique fellow agencies or itself when monitoring potential systemic risk to financial stability by a large nonbank. H.R. 3682 requires the FSOC to explore alternatives to designating a nonbank for enhanced supervision by the Federal Reserve. This is at the heart of the collaboration in this bill. If a nonbank were improperly designated, it could hinder innovation and make the United States' financial system less competitive as a result. This bill will impose rigorous procedural guardrails and enhance due diligence protections and a stronger analytic framework before a firm can be designated as a systemically important financial institution, or SIFI. I thank, again, the gentleman from Illinois (Mr. Foster) and the gentleman from Michigan (Mr. Huizenga) for their collaboration in producing this solid, bipartisan bill that will protect U.S. competitiveness and deliver financial stability consistent with FSOC's mission, but do that in a thoughtful, analytic way that can support a review of systemic risk. Mr. Speaker, I urge my colleagues to support the bill, and I reserve the balance of my time. Mrs. BEATTY. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I rise in support of H.R. 3682, the Financial Stability Oversight Council Improvement Act of 2025, sponsored by Representative Foster. Let me start by thanking the bill sponsor and our ranking member for our Financial Institutions Subcommittee for his leadership on these matters. Representative Foster has helped raise the alarm regarding the financial stability threats posed by the AI boom. He has introduced additional bills that would strengthen our financial stability, including one to reverse Trump's dangerous budget and staffing cuts to the Financial Stability Oversight Council and Office of Financial Research. [[Page H2075]] Mr. Foster introduced another bill to close a regulatory gap to oversee third-party vendors used by credit unions and the GSEs. I know Republicans have some concerns with the former, but the latter bill has bipartisan support in the Senate and is timely. Given how our community financial institutions increasingly rely on these vendors, helping them access technology to compete, the least we can do is ensure that there is good oversight to address vulnerabilities like cybersecurity threats. Turning to this bill, H.R. 3682, let's step back and remember why we have a Financial Stability Oversight Council in the first place. Congress established FSOC following the 2008 global financial crisis to close regulatory gaps and enhance oversight of large, nonbank financial firms like AIG or Lehman Brothers that can pose a threat to our financial stability. Congress gave FSOC various tools, including the power to designate a large nonbank company as a systemically important financial institution for enhanced oversight and regulation. In Trump's first term, they severely weakened the nonbank designation process. In a letter, former Treasury Secretaries Geithner, Lew, and Yellen, along with former Fed Chair Bernanke, warned: ``These changes would make it impossible to prevent the build-up of risk in financial institutions whose failure would threaten the stability of the system as a whole.'' Biden's FSOC addressed these concerns and improved procedures for designations, while importantly ensuring there is due process and opportunities to consider alternatives to designation that might better mitigate systemic risks. They also made clear that the Council should not prioritize designation over other options. Mr. Foster will make sure that FSOC gives a company and its primary regulators an opportunity to present alternatives to be promptly considered by the Council; otherwise, they may proceed and follow the regular procedures to designate a firm if need be. The bill also allows FSOC to revise and waive these considerations if doing so would promote financial stability. Given all of that, Mr. Speaker, I will support H.R. 3682, and I reserve the balance of my time. Mr. HILL of Arkansas. Mr. Speaker, I yield 4 minutes to the gentleman from Michigan (Mr. Huizenga), who is the vice chairman of our full committee and the author of this important bill. Mr. HUIZENGA. Mr. Speaker, I thank my friend and colleague, Mr. Foster, on the other side for working on this. Mr. Speaker, I rise today in strong support of Mr. Foster's legislation, the Financial Stability Oversight Council Improvement Act, and urge its immediate adoption. Mr. Speaker, in response to the 2008 financial crisis, Congress, under the Dodd-Frank Act, created the Financial Stability Oversight Council, known as FSOC, as the chairman was talking about, and tasked them with preventing systemic risk. It was absolutely a worthwhile and needed endeavor. However, in the early years, the FSOC was given broad-reaching authorities to designate nonbanks as systemically important financial institutions, otherwise known as SIFIs. During President Trump's first administration, the FSOC moved to an activities-based approach in 2019, which I think was an appropriate response in a post-MetLife court case world where the Federal Government lost because of aggressive overreach. In fact, the judge used the phrase ``excessive and capricious.'' Four years later in 2023, under former President Biden, I believe the FSOC snapped right back into using those faulty analytical frameworks for identifying and dealing with systemic risks. Just last week, in testimony before the House Committee on Financial Services, Treasury Secretary Bessent emphasized on multiple occasions that the so-called activities-based approach would be preferred. We agree. {time} 1620 Unfortunately, this back-and-forth guidance has not allowed businesses to plan for the future or make new investments. Mr. Speaker, why does a SIFI designation actually matter? Many people watching might ask themselves that. Well, as history has taught us, it is a broad-reaching issue that can have some very negative consequences. Excessive regulatory scrutiny and additional costs can change the way nonbanks conduct business. Mr. Speaker, we cannot continue applying banklike regulations to nonbanks that have fundamentally different business models and roles within the American economy. The Financial Stability Oversight Council Improvement Act, on which I am a proud co-lead with Mr. Foster, makes 

Referenced legislation: HR3682, HR3682