Bringing the Discount Window into the 21st Century Act · Reported in House (2025-09-04)

119th CONGRESS 1st Session

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 HOUSE OF REPRESENTATIVES · May 14, 2025 · Sponsor: Ms. De La Cruz · Committee: Committee on Financial Services

SEC. 2. Review of discount window operations

Section 10 of the Federal Reserve Act () is amended— 12 U.S.C. 241 et seq.

by redesignating paragraph (12) as paragraph (11); and
- (12) Review of discount window operations
  - (A) In general
    - Not later than 60 days after the date of enactment of this paragraph, the Board of Governors shall commence a review of the discount window lending programs of the Federal reserve banks (the ), and shall complete such review not later than 240 days after the date of enactment of this paragraph.
  - (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 of Governors, the Federal Deposit Insurance Corporation, the Comptroller of the Currency, and the Secretary of the Treasury regarding discount window operations;
      - (v) the effectiveness of the Board of Governors 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—
      - help financial institutions better respond to rapid liquidity shortfalls; and
      - 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 of Governors completes the review required by subparagraph (A), the Board of Governors, 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—
      - an identification of actions that will be taken to enhance discount window effectiveness and remediate identified deficiencies;
      - timelines and milestones for implementing the plan and measures to demonstrate how the implemented improvements will be maintained on an ongoing basis; and
      - 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) Not later than 365 days after the date of enactment of this paragraph, the Board of Governors shall submit a 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—
    - the findings of the review required by subparagraph (A); and
    - the remediation plan required by subparagraph (C).
    - (ii) Before submitting the report required by clause (i), the Board of Governors shall—
    - provide a copy of the proposed report to the Comptroller of the Currency, the Federal Deposit Insurance Corporation, and the Secretary of the Treasury; and
    - provide the Comptroller of the Currency, the Federal Deposit Insurance Corporation, and the Secretary of the Treasury with an opportunity to provide feedback on the report.
    - (iii) The Chairman of the Board of Governors 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) The Board of Governors 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 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) 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 of Governors 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.
  - (G) Repeal
    - This paragraph shall be repealed on the date on which the Board of Governors notifies the Congress and publishes on a public website of the Board of Governors that the remediation plan required under subparagraph (C) has been fully implemented.
by adding at the end the following:

H.R. 3390

Table of contents

SEC. 1. Short title

SEC. 2. Review of discount window operations