Sponsors (4)
The bill increases procedural protections and information-sharing for nonbank firms (reducing risk of overbroad or poorly targeted designations) at the cost of making and potentially delaying decisive regulatory action to address systemic risk, which could raise the chance of larger market disruptions and taxpayer exposure.
Nonbank financial companies can submit written remediation plans to avoid being designated, helping those firms preserve business continuity and avoid costly regulatory impositions.
The Council must consult with firms and their primary regulators before voting, improving information flow and increasing the chance that any remedies are better targeted and less likely to create unnecessary disruption.
The bill raises the threshold for quick designation of risky nonbank firms, which could delay interventions that protect financial stability and increase the chance of broader market stress.
Firms could use the consultation and plan-submission process to delay decisive action, prolonging taxpayer and market exposure to systemic risk.
Based on analysis of 2 sections of legislative text.
Requires FSOC to find alternatives impracticable/insufficient, consult the company and its primary regulator, and consider alternatives or a company plan before designating a nonbank financial company.
Requires the Financial Stability Oversight Council (FSOC) to take extra procedural steps before it can vote to designate a U.S. nonbank financial company as systemically important. FSOC must first find that other actions are impracticable or insufficient, consult with the company and the company’s primary federal regulator, and consider alternative agency or Council actions or a written plan submitted by the company.
Introduced December 18, 2025 by Marion Michael Rounds · Last progress December 18, 2025