119-HR-3390 Journalist Public Summary
119 · HR 3390 Bringing the Discount Window into the 21st Century Act
A bipartisan House-passed bill would make the Federal Reserve review and modernize its "discount window"—the backstop lending option for banks—set deadlines to fix gaps, and report progress to Congress, with Inspector General oversight. It passed the House on February 9, 2026 and now awaits Senate action.
Headline Summary
A bipartisan House-passed bill would require the Federal Reserve to review, modernize, and report on its bank backstop lending operations (the “discount window”), with deadlines and oversight to ensure improvements are made.
What It Does
The bill directs the Fed’s Board of Governors to quickly review how the discount window works and then implement fixes on a schedule. The review must cover technology and cybersecurity, operating hours, how it coordinates with other liquidity sources (like the Federal Home Loan Banks), communication among regulators, and ways to reduce the stigma that deters banks from using it.
- Timeline-driven plan: Finish a system-wide review within roughly eight months of enactment, then deliver a written remediation plan with concrete actions, milestones, and measures to keep improvements in place.
- Modernization focus: Assess whether technology, communications, and operating hours (including links to Fedwire and FedNow) support fast access during stress, and whether cybersecurity protections are adequate.
- Behavioral risks: Examine how mobile banking and instant communications can intensify bank runs and how the discount window should adapt.
- Access and pricing: Look at consistency across Reserve Banks, transparency, and whether terms help institutions respond quickly without destabilizing the system.
- Accountability: Submit a comprehensive report to Congress within one year; provide annual progress reports; require the Fed’s Inspector General to file annual oversight reports; allow a confidential annex for sensitive stability or cybersecurity details.
- Sunset: The new mandate repeals once the Fed certifies it fully implemented the remediation plan.
Who’s For It
- Sponsors: Reps. Monica De La Cruz (R‑TX), Dan Meuser (R‑PA), and Frank Lucas (R‑OK). They frame the bill as a modernization push so the Fed can move liquidity faster and more securely in a crisis.
- Bipartisan signals: The House Financial Services Committee advanced it 48–1 in July 2025, and the full House passed it by voice vote under suspension on February 9, 2026—both procedures typically used for broadly supported measures.
- Bank supervisors and crisis-planning advocates (in general): Emphasize clearer playbooks, stronger technology, and reduced operational friction so solvent banks can bridge short-term shocks without jolting the wider economy.
Who’s Against It
- Skeptics of congressional direction for the Fed: Worry about micromanaging the central bank’s operational toolkit or adding reporting mandates that could distract from crisis response.
- Moral‑hazard critics: Argue that making the window easier to use might encourage some banks to take more liquidity risk, counting on Fed credit during stress.
- Transparency purists: Note that allowing confidential annexes could limit public insight into how the window is used and on what terms, even if justified by stability or cybersecurity concerns.
- Practical implementers: Flag the cost and complexity for the Fed and banks to update systems, extend hours, and coordinate across Reserve Banks and payment rails.
What’s Next
Status: The House passed H.R. 3390 by voice vote on February 9, 2026. Next, the bill goes to the Senate, where it awaits committee consideration and floor action.
Discussion