119-HR-3682 Journalist Public Summary
119 · HR 3682 Financial Stability Oversight Council Improvement Act of 2025
A bipartisan House bill would make FSOC try other fixes first—like working with a firm’s primary regulator—before slapping bank‑style Fed oversight on a nonbank; the House passed it by voice vote on February 9, 2026, and it now heads to the Senate. (congress.gov)
Headline Summary
Make FSOC use “lighter-touch” options first—before designating a nonbank (like an insurer, asset manager, or fintech) for Federal Reserve supervision. (congress.gov)
What It Does
The bill amends Section 113 of the Dodd‑Frank Act to bar FSOC from even voting on a nonbank “systemic” designation unless it first determines—after consulting the company and its primary regulator—that other actions (including activity-based safeguards under Section 120) are impracticable or insufficient. In short, designation becomes a tool of last resort. (congress.gov)
Why it matters: FSOC’s 2023 guidance made it easier to revisit nonbank designations and de‑emphasized a strict preference for activity‑based fixes; supporters of this bill say Congress should hard‑code a step‑by‑step process so firms get due process and tailored remedies first, while critics worry it slows FSOC’s ability to act in a crisis. (home.treasury.gov)
Who’s For It
- Sponsors from both parties: Rep. Bill Foster (D‑IL) and Rep. Bill Huizenga (R‑MI); the bill advanced from committee 47–4. Supporters say it adds transparency and requires FSOC to exhaust alternative tools before designating a firm. (congress.gov)
- A broad industry coalition (U.S. Chamber of Commerce; trade groups for insurers, asset managers, mortgage lenders, fintechs, and others) argues the bill restores predictability, ensures consultation with a company’s primary regulator, and keeps SIFI designation as a last resort. (uschamber.com)
- Alternative asset managers (MFA) back the bill, saying firms like theirs already face SEC oversight and don’t pose bank‑like systemic risk; they want FSOC to favor targeted, activity‑based fixes. (mfaalts.org)
Who’s Against It
- Public Citizen and other consumer‑advocacy groups oppose H.R. 3682, calling it another roadblock that would make it harder for FSOC to designate risky nonbanks when needed. (citizen.org)
- Financial‑reform advocates such as Better Markets have praised the 2023 FSOC framework that revitalized nonbank designation authority and warn against efforts that could weaken it; they argue swift tools are necessary to prevent taxpayer‑backed rescues. (bettermarkets.org)
- Some progressive lawmakers have criticized recent moves to narrow FSOC’s reach, signaling skepticism of proposals viewed as constraining the council’s authorities. (banking.senate.gov)
What’s Next
Status as of February 10, 2026: The House passed the bill by voice vote on February 9, 2026, under suspension of the rules; the motion to reconsider was laid on the table. The measure now goes to the Senate, where an identical companion (S. 3578) is in the Banking Committee. Note: official status pages (e.g., Congress.gov) often lag floor action by a day. (clerk.house.gov)
Discussion