Financial Stability Oversight Council Improvement Act of 2025

This bill adds a step before the federal council that watches over financial stability can put a large, nonbank financial company under Federal Reserve supervision. Before they can vote to do that, the council must first talk with the company and its main regulator, and look at other ways to reduce risk—like tougher rules or a written plan from the company. Only if those other options are not practical or don’t solve the problem can they move ahead with the vote.

It also makes a small fix so the council’s procedures line up with this new step. The goal is to try simpler solutions first, and use stricter oversight only if needed to protect the U.S. financial system.

• Who is affected: U.S. nonbank financial companies; the financial stability council; companies’ primary regulators.
• What changes: The council must consider and rule out other actions (including tougher standards or a company’s written plan) before voting to place a company under Federal Reserve supervision; procedures are updated to reflect this new requirement.
• When: Would take effect if enacted into law; no specific date is provided in the text.