Bill > HR5270

This bill requires the Federal Reserve Board to establish clear and transparent rules for stress testing financial institutions, specifically focusing on how stress capital buffer requirements are calculated. The bill mandates that within 90 days of enactment, the Board must create rules defining the models, assumptions, and methodologies used in stress tests for covered companies (which includes certain bank holding companies and financial institutions). The bill requires the Board to publicly disclose stress test scenarios at least 60 days before conducting them and prohibits climate-related stress tests. Additionally, the bill requires the Government Accountability Office (GAO) to conduct a comprehensive review of these stress tests every three years, assessing their effectiveness in evaluating the safety of financial institutions and the overall stability of the U.S. financial system. Importantly, the bill stipulates that the Board can only make material changes to stress testing methodologies through a formal notice and comment rulemaking process, and must ensure that capital requirements are not double-counted across different risk assessments. The legislation aims to increase accountability and transparency in how financial institutions are evaluated for their ability to withstand economic challenges.

Business and Industry

https://www.congress.gov/bill/119th-congress/house-bill/5270/all-info