Overview
Title
To place the Financial Stability Oversight Council and the Office of Financial Research under the regular appropriations process, to provide for certain quarterly reporting and public notice and comment requirements for the Office of Financial Research, and for other purposes.
ELI5 AI
This bill wants to make the rules for two money-watching groups more like the usual ones other government groups have. It says they should tell everyone about their plans and spending more often and listen to what people think before making new rules.
Summary AI
H.R. 6962, known as the "Financial Stability Oversight Council Reform Act," proposes placing the Financial Stability Oversight Council and the Office of Financial Research under the regular appropriations process. It requires these entities to provide quarterly reports on their activities and expenses and imposes a public notice and comment period of at least 90 days before issuing proposed reports or regulations. Additionally, the bill mandates an annual work plan detailing the Office's priorities, the development of a cybersecurity plan, and the inclusion of consultation with other federal entities when preparing public reports.
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AnalysisAI
The Financial Stability Oversight Council Reform Act, formally known as H.R. 6962, is a legislative proposal introduced in the U.S. House of Representatives aimed at reforming how the Financial Stability Oversight Council (FSOC) and the Office of Financial Research (OFR) operate. The bill proposes to bring these entities under the regular appropriations process, introducing quarterly reporting requirements, and mandating public notice and comment for certain activities. The bill also outlines additional duties for the OFR, including annual work plans and cybersecurity measures.
General Summary of the Bill
The Act strives to enhance the transparency and accountability of the FSOC and OFR by shifting their financial management to a more structured budgetary framework. Under this bill, funding for these offices would need to be processed through legislative appropriation acts. It also imposes a requirement for quarterly reporting to Congress on various operational aspects and insists on a public engagement process before any substantial regulatory actions are taken. Moreover, the OFR is tasked with creating detailed annual work plans and bolstering its cybersecurity practices.
Summary of Significant Issues
One significant issue with the bill is the change in funding mechanisms for the FSOC and OFR. By necessitating that funds be appropriated through acts, there may be delays that could impair these offices' operational activities, potentially affecting their ability to fulfill their mandates effectively. Moreover, the mandated quarterly reporting lacks a standardized format, which may result in inconsistent data presentation and a lack of clear accountability, undermining the intended transparency.
Public participation is encouraged by a required 90-day notice for comments before implementing new rules. However, the complex language of these provisions may confuse the general public, thus limiting engagement and potentially stifling constructive feedback. Furthermore, the required duration for notices may slow down the OFR’s agility in responding to critical financial stability issues.
On the cybersecurity front, the bill's lack of detailed guidelines on what constitutes appropriate safeguards could result in uneven implementation and security risks. The listing of advisory committees and professional affiliations also raises privacy concerns if not managed with the right precautions.
Public Impact
For the general public, this bill may offer increased transparency into the financial stability activities and potential vulnerabilities of key financial entities. Regular congressional reporting could enhance oversight and perhaps engender greater public confidence in the stewardship of financial stability.
However, there is a risk that the transition to an appropriations-based funding model could introduce fiscal delays, potentially debilitating the quick response mechanisms of the FSOC and OFR during financial crises. This might lead to prolonged regulatory responses during periods of financial instability, which can have far-reaching economic consequences.
Impact on Stakeholders
Financial institutions and regulatory bodies might perceive this bill as a mixed blessing. On one hand, the emphasis on transparency and engagement gives them an opportunity to weigh in on regulatory processes, potentially influencing policies that directly affect their operations. On the other hand, delays in funding and decision-making processes might impede timely regulatory guidance which these entities depend upon for compliance and strategic planning.
For policymakers and governmental agencies, this reform proposes a more systematic and accountable structure for overseeing financial stability efforts. However, the operational delays and procedural complications inherent in the proposed changes may require careful management to avoid undermining the efficiency and effectiveness of regulatory oversight bodies.
In summary, the Financial Stability Oversight Council Reform Act aims to strengthen accountability and transparency within key financial oversight bodies, yet it poses challenges that need to be carefully considered to ensure these objectives are met without inadvertently compromising the functions of these essential institutions.
Issues
The change to the funding mechanism in Section 2 could significantly impact the operations and financial stability of the Financial Stability Oversight Council and the Office of Financial Research. Specifically, the alteration from 'immediately available' funds to those 'provided for in appropriation Acts' may introduce delays that could affect their essential functions.
Section 3 lacks a standardized format or level of detail for quarterly reports, potentially leading to inconsistent reporting and reduced transparency regarding the Office's activities. There is also no direct accountability or oversight mechanism included, which might result in reports that are merely procedural without meaningful impact.
The public notice and comment period outlined in Section 4 may confuse the public due to its complex language and lack of clarity about which reports, rules, or regulations it applies to, potentially limiting public engagement and transparency.
In Section 5, the requirement for a 60-day public notice and comment period for the annual work plan and a 90-day period for public reports may impede timely decision-making and responsiveness of the Office, affecting its agility in addressing financial stability issues.
Section 5 also raises privacy concerns due to the requirement for listing technical and professional advisory committees along with the professional affiliations of fellows. Without privacy safeguards, this may lead to unnecessary exposure of personal information.
The cybersecurity provisions in Section 5 lack specific guidelines on 'appropriate safeguards', which could result in inconsistent implementation and effectiveness, potentially putting sensitive data at risk.
Sections
Sections are presented as they are annotated in the original legislative text. Any missing headers, numbers, or non-consecutive order is due to the original text.
1. Short title Read Opens in new tab
Summary AI
The first section of this Act states its short title, which is called the “Financial Stability Oversight Council Reform Act.”
2. Funding Read Opens in new tab
Summary AI
Section 2 of the bill amends the Financial Stability Act of 2010 by changing how funds are made available to the Office, stating that they will be provided through appropriation Acts. It also removes a specific paragraph and modifies the heading for subsection (d), with these changes taking effect on October 1, 2023.
3. Quarterly reporting Read Opens in new tab
Summary AI
The section amends the Financial Stability Act of 2010 to require the Office to submit detailed quarterly reports about its activities to key congressional committees. The reports must include information on spending, staffing, and progress towards goals, and the Office may be asked to provide testimony on the contents of the reports.
4. Public notice and comment period Read Opens in new tab
Summary AI
The amendment to the Financial Stability Act of 2010 requires a public notice and comment period of at least 90 days before the Office issues any proposed reports, rules, or regulations. It also states that for most proposed reports, the same rules apply as for proposed regulations, except for a few specific reports that are not subject to these rules.
5. Additional duties of the Office of Financial Research Read Opens in new tab
Summary AI
The section outlines additional responsibilities for the Office of Financial Research, requiring it to publish an annual work plan, consult with federal agencies for public reports, and create a cybersecurity plan. It mandates the use of a unique identifier system for financial entities and includes oversight measures, such as public consultation and audits.