Sponsors (21)
The bill gives nonbank firms and their regulators more procedural flexibility to avoid disruptive SIFI designations and to pursue tailored remediation, but that added process may slow decisive action and raise the risk of prolonged systemic exposure and taxpayer losses.
Nonbank financial companies: may avoid being designated as systemically important if they present feasible alternatives or remedial plans, reducing regulatory burden and the disruption of a SIFI designation.
Primary regulators and covered companies: gain a formal role in evaluating alternatives and remediation, enabling more tailored, less disruptive supervisory actions instead of immediate blunt interventions.
Nonbank financial companies and the broader financial system: are incentivized to submit prompt written remediation plans, which can encourage pre-emptive fixes and potentially improve financial stability without full designation.
Taxpayers and the financial system: added procedural requirements and stronger protections for firms could slow FSOC’s ability to designate quickly, prolonging systemic risk and increasing the chance of taxpayer-funded interventions.
Regulatory enforcement and public accountability: formal consultation and a requirement to consider company plans can create opportunities for delay or regulatory capture, weakening enforcement leverage against risky firms.
Based on analysis of 2 sections of legislative text.
Requires FSOC to make a written initial finding—after consulting the company and its regulator—that alternatives or a company plan are impracticable or insufficient before proposing a nonbank SIFI designation.
Introduced June 3, 2025 by Bill Foster · Last progress February 11, 2026
Requires the Financial Stability Oversight Council (FSOC) to make a formal initial finding, after consulting with the nonbank firm and its primary financial regulator, that alternative actions or a company-submitted plan are impracticable or insufficient before FSOC may vote to propose designating a U.S. nonbank financial company as systemically important. Also updates a cross-reference so an existing procedural subsection points to the new initial-determination requirement.