Technical corrections only. The changes reflect the bill's legislative status update from being engrossed in the House to being referred to the Senate, including the addition of the Senate referral information. No substantive policy changes were made between v3 and v4.
Systemic Risk Authority Transparency Act
- Sponsor
- Rep. Green, Al [D-TX-9]
- Committees
- Banking, Housing, and Urban Affairs Committee (primary)
- Last action
- Dec 2, 2025
Bottom line
This bill aims to increase transparency and accountability from federal regulators and failed institutions following the invocation of systemic risk authority during a bank failure.
What it actually does
The bill expands reporting requirements for federal agencies when the systemic risk exception is invoked for a failed bank. It mandates the Government Accountability Office (GAO) to conduct more comprehensive reviews of such failures, including causes, regulatory shortcomings, and external contributions. Additionally, it requires the appropriate federal banking agency to submit detailed reports to Congress, disclosing examination reports, supervisory determinations, and an analysis of mismanagement and regulatory failures, with provisions for transparency and protection of sensitive information.
Proponents argue
Proponents argue that increased transparency and detailed post-mortem analysis are crucial for preventing future bank failures and ensuring accountability when the systemic risk exception is used, which can involve taxpayer funds. They believe that a deeper understanding of the causes, including regulatory oversight and institutional mismanagement, will lead to better policy and supervision, ultimately strengthening financial stability and restoring public trust.
Opponents contend
Opponents might argue that the extensive reporting requirements could be overly burdensome for agencies, diverting resources from ongoing supervisory activities. They might also raise concerns that broad disclosure of supervisory materials, even with redactions, could inadvertently reveal sensitive information that could destabilize other institutions or compromise future supervisory effectiveness, despite the bill's protection clauses.
The bill is concise and its provisions are clearly laid out, making it accessible for a thorough review within a short timeframe.
Section 2(a)
Expanded GAO Review of Systemic Risk Determinations
This provision significantly broadens the scope of reports the Government Accountability Office (GAO) must submit to Congress following a determination that a bank failure poses a systemic risk. The GAO will now need to investigate the basis for the systemic risk determination, the actions taken, their likely effect on bank and depositor behavior, any mismanagement by the failed bank's leadership, compensation practices, regulatory shortcomings, actions by various financial regulators, and contributions from external entities like auditors or credit rating agencies.
Supporters argue
Supporters argue that a more thorough and independent review by the GAO is essential for public accountability and learning from past failures. This expanded scope ensures that all contributing factors, including regulatory oversight and external influences, are fully examined, leading to more robust policy responses and preventing future crises.
Critics contend
Some might argue that while transparency is good, the GAO's expanded mandate could lead to duplicative efforts with internal agency reviews or place an undue burden on the GAO, potentially delaying critical insights if resources are stretched too thin.
Tradeoffs
The bill balances the need for comprehensive oversight and accountability with the potential for increased administrative burden on the GAO and other agencies involved in the review process.
Section 2(b)
Federal Banking Agency Reports on Failed Institutions
This provision requires the primary federal banking regulator of a failed insured depository institution (e.g., FDIC, OCC, Federal Reserve) to submit detailed reports to Congress within 90 days (and again 210 days later) after a systemic risk determination. These reports must include past examination reports, formal supervisory communications (with redactions for personal and other sensitive financial institution information), an analysis of mismanagement by the bank's leadership, the agency's own supervisory shortcomings, contributing dynamics, and policy recommendations. It also includes clauses for transparency, requiring publication of materials to the fullest extent possible, and consultation with congressional committees if materials are withheld.
States that nothing in the GAO review clause or report limits a federal agency's authority to enforce violations of federal statutes, rules, or orders.
Section 2(a), amending 12 U.S.C. 1823(c)(4)(G)(iv)(II)
Why it matters:Standard legislative practice to clarify the scope and limits of new provisions, ensuring they don't inadvertently curtail existing enforcement powers.
Case for: Ensures that the new reporting requirements do not inadvertently create loopholes or diminish the enforcement capabilities of federal agencies, preserving their ability to prosecute wrongdoing.
Case against: No specific case against; it's a standard clarifying clause.
Estimated impact: Prevents unintended legal consequences; ensures continuity of enforcement.
Specifies that providing information under this paragraph does not waive any privilege (e.g., attorney-client, work-product) or FOIA exemption. It also mandates federal banking agencies to publish materials to the fullest extent possible for transparency, and to consult with House and Senate committee chairs/ranking members if materials are to be omitted, providing a written explanation for such omissions.
Section 2(b), adding 12 U.S.C. 1823(c)(12)(B)
Why it matters:While crucial for implementation, these are technical details about how information sharing and publication will occur, often placed in specific procedural subsections. The balance between transparency and privilege is a complex legal issue.
Case for: Proponents argue this strikes a necessary balance, allowing for increased transparency and congressional oversight while protecting legally privileged information and the integrity of ongoing supervisory processes. The consultation requirement ensures that decisions to withhold information are not made unilaterally.
Case against: Critics might argue that the 'fullest extent possible' language still leaves too much discretion to agencies, potentially allowing them to withhold information that the public or Congress deems essential. The consultation process, while an improvement, might not fully overcome agency reluctance to disclose sensitive details.
Estimated impact: Shapes the practical reality of how much information will be publicly available and how transparent agencies must be.