Systemic Risk Authority Transparency

What the document says

“The Comptroller General of the United States shall, not later than 60 days after a determination is made under clause (i), and again 180 days thereafter, review and report to the Congress on the determination under clause (i), including--”

The section rewrites section 13(c)(4)(G)(iv) of the Federal Deposit Insurance Act to require the Comptroller General of the United States to review a systemic risk determination and report to Congress within 60 days and again 180 days later. The review must cover the basis for the determination, the purpose of any action taken, its likely effect on the incentives and conduct of banks and uninsured depositors, mismanagement by the failed bank's executives and board, the bank's compensation practices, supervisory or regulatory shortcomings at its federal banking agency, actions taken by the banking regulators, the Financial Stability Oversight Council, the Treasury and other regulators, and any other entities or activities that contributed, including auditing, accounting, credit rating agencies, investment bank underwriters, and emergency liquidity such as loans from the Federal reserve banks or advances from the Federal Home Loan Bank system.

What the document says

“Nothing in this clause or a report issued pursuant to this clause may be construed to limit the authority of a Federal agency to enforce violations of Federal statutes, rules, or orders.''.”

The section states that nothing in the review clause or a report issued under it may be read as limiting a federal agency's power to enforce violations of federal statutes, rules, or orders.

What the document says

“The appropriate Federal banking agency of an insured depository institution about which a determination is made under paragraph (4)(G)(i) shall, not later than 90 days after the date of such determination, and again 210 days thereafter, submit a report to the Congress that discloses the following:”

The section adds a new paragraph (12) to section 13(c) of the Federal Deposit Insurance Act requiring the failed bank's federal banking agency to report to Congress within 90 days of a systemic risk determination and again 210 days later. The report must disclose, subject to redactions protecting personal information about customers and other institutions, all examination and inspection reports on the bank from the previous three years, all formal communications of a material supervisory determination in that period, and any other exam reports or correspondence the agency finds relevant, together with an examination of mismanagement by the bank's executives and board, any supervisory or regulatory shortcomings of the agency itself, any dynamics that may have contributed to the failure, and any recommendations to improve safety and soundness.

What the document says

“``(I) waiving, destroying, or otherwise affecting any privilege applicable to the information; or ``(II) waiving any exemption applicable to the information under section 552 of title 5, United States Code (commonly known as the `Freedom of Information Act').”

The section provides that a federal banking agency giving information under the new paragraph does not thereby waive, destroy, or affect any privilege applying to it, or waive any exemption under the Freedom of Information Act. Privilege here covers work-product, attorney-client, and any other privilege recognized under federal or State law.

What the document says

“A Federal banking agency shall publish materials contained in a report required under subparagraph (A) to the fullest extent possible to promote transparency.”

The section requires a federal banking agency to publish the materials in the report as fully as possible. Where it decides particular materials should not be published, it must consult the chair and ranking member of the House Committee on Financial Services and of the Senate Committee on Banking, Housing, and Urban Affairs, and where after that it finds a substantial public interest in not publishing them, it must give those materials to both committees with a written explanation of its reasons.

What the document says

“A Federal banking agency may extend a deadline described under subparagraph (A) for an additional 60 days, if the Federal banking agency-- ``(i) faces ongoing circumstances that require the Federal banking agency to prioritize activities to promote stability of the United States banking system; and”

The section lets a federal banking agency extend a report deadline by 60 days where ongoing circumstances require it to prioritize work promoting the stability of the banking system, and it notifies Congress of the extension and the reasons. An agency may also consolidate several reports so long as each still meets its timing requirement, and nothing in the paragraph limits any agency's power to enforce federal law.