Financial Stability Oversight Council Improvement Act of 2025

Floor Speech

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Mr. HILL of Arkansas. Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 3682) to amend the Financial Stability Act of 2010 to require the Financial Stability Oversight Council to consider alternative approaches before determining that a U.S. nonbank financial company shall be supervised by the Board of Governors of the Federal Reserve System, and for other purposes, as amended.

The Clerk read the title of the bill.

The text of the bill is as follows: H.R. 3682

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE.

This Act may be cited as the ``Financial Stability Oversight Council Improvement Act of 2025''. SEC. 2. FINANCIAL STABILITY OVERSIGHT COUNCIL.

Section 113 of the Financial Stability Act of 2010 (12 U.S.C. 5323) is amended--

(1) in subsection (a)--

(A) in paragraph (1), by striking ``The Council'' and inserting ``Subject to paragraph (3), the Council''; and

(B) by adding at the end the following:

``(3) Initial determination.--The Council may not vote on a proposed determination with respect to a U.S. nonbank financial company under paragraph (1) unless the Council first determines, in consultation with the company and the primary financial regulatory agency with respect to the company, that a different action by the Council or the agency (including the application of new or heightened standards and safeguards under section 120), or by the company under a written plan that is submitted promptly to the Council, is impracticable or insufficient to mitigate the threat that material financial distress at the company, or the nature, scope, size, scale, concentration, interconnectedness, or mix of the activities of the company, could pose to the financial stability of the United States.''; and

(2) in subsection (f)(1), by striking ``subsection (e)'' and inserting ``subsections (a)(3) and (e)''.

Mr. Speaker, I rise today in support of this fine bill offered by Mr. Foster and Mr. Huizenga. It is a bipartisan bill, Mr. Speaker, the Financial Stability Oversight Council Improvement Act, after a decade of collaboration across four Presidential administrations that has led to this consensus on this measure.

The Financial Stability Oversight Council, FSOC, created in the aftermath of the global financial crisis, plays an important role in understanding and examining nonbanks, and that is because many nonbanks, large nonbanks, are not subject to the same regulations and supervision as traditional banks, so the Congress created this process.

Unfortunately, its own structure, as composed by political appointees, can inhibit the Council's ability to effectively critique fellow agencies or itself when monitoring potential systemic risk to financial stability by a large nonbank.

H.R. 3682 requires the FSOC to explore alternatives to designating a nonbank for enhanced supervision by the Federal Reserve. This is at the heart of the collaboration in this bill.

If a nonbank were improperly designated, it could hinder innovation and make the United States' financial system less competitive as a result.

This bill will impose rigorous procedural guardrails and enhance due diligence protections and a stronger analytic framework before a firm can be designated as a systemically important financial institution, or SIFI.

I thank, again, the gentleman from Illinois (Mr. Foster) and the gentleman from Michigan (Mr. Huizenga) for their collaboration in producing this solid, bipartisan bill that will protect U.S. competitiveness and deliver financial stability consistent with FSOC's mission, but do that in a thoughtful, analytic way that can support a review of systemic risk.

Mr. Speaker, I urge my colleagues to support the bill, and I reserve the balance of my time.
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Mr. HILL of Arkansas. Mr. Speaker, I include in the Record the CBO estimate on this bill. EFFECTS ON DIRECT SPENDING AND REVENUES OF LEGISLATION CONSIDERED UNDER SUSPENSION OF THE RULES IN THE HOUSE OF REPRESENTATIVES WEEK OF FEBRUARY 9, 2026 ---------------------------------------------------------------------------------------------------------------- Additional Information on Bill Number Title Effect on Direct Effect on Revenues Direct Spending Spending and Revenue Effects ---------------------------------------------------------------------------------------------------------------- H.R. 3682....................... Finanical Increase by Less Increase by Less Would change Stability Than $500K. Than $500K. deficits by less Oversight Council than $500K, Improvement Act direction of 2025, as unknown. amended. ---------------------------------------------------------------------------------------------------------------- Source: Congressional Budget Office.

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Mr. HILL of Arkansas. Mr. Speaker, I am prepared to close, and I reserve the balance of my time.

Mr. Speaker, I thank the gentleman from Illinois and his collaboration with the gentleman from Michigan to tackle and bring definition to something that has been a big issue for the past decade, which is what is the proper method, style, and oversight of designating a nonbank a systemically important financial institution.

I congratulate them on their bipartisan work. For the reasons I have stated, I urge a ``yes'' vote, and I yield back the balance of my time.

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