S 5465

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IN THE SENATE OF THE UNITED STATES

September 23, 2026

Ms. Cortez Masto (for herself and Mr. Rounds) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs

A BILL

To amend the Federal Reserve Act to require the Board of Governors of the Federal Reserve System to carry out a review of discount window operations and to implement improvements to such operations, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the “Bringing the Discount Window into the 21st Century Act”.

SEC. 2. REVIEW OF DISCOUNT WINDOW OPERATIONS.

(a) In General.—Section 10 of the Federal Reserve Act (12 U.S.C. 241 et seq.) is amended—

(1) by redesignating paragraph (12) as paragraph (11); and

(2) by adding at the end the following:

“(12) Review of discount window operations.—

“(A) In general.—The Board shall—

“(i) not later than 60 days after the date of enactment of this paragraph, commence a review of the discount window lending programs of the Federal reserve banks; and

“(ii) not later than 240 days after the date of enactment of this Act, complete the review required under clause (i).

“(B) Contents.—The review required by subparagraph (A) shall include a consideration of—

“(i) the effectiveness of the discount window in providing liquidity to financial institutions, including in times of financial stress;

“(ii) whether the technology infrastructure, including means of communications, are sufficient to support the timely provision of liquidity, including in times of financial stress;

“(iii) the effectiveness of cybersecurity measures implemented with respect to discount window operations;

“(iv) the effectiveness of communications between Federal reserve banks, financial institutions, the Board, the Federal Deposit Insurance Corporation, the Comptroller of the Currency, the Federal Housing Finance Agency, and the Secretary of the Treasury regarding discount window operations;

“(v) the effectiveness of the Board in providing oversight of the discount window and in ensuring consistent access to the discount window across the Federal Reserve System;

“(vi) how the discount window interacts with other providers of liquidity, including the Federal Home Loan Banks, during both normal operations and times of financial distress;

“(vii) the effectiveness of existing discount window operating hours and whether such hours should be expanded, taking into account the interaction between discount window operating hours and the operating hours of payment systems of the Federal reserve banks, such as the Fedwire Funds Service and FedNow Service;

“(viii) the impact of mobile banking and instant communications technology on depositor behavior and liquidity risk posed to financial institutions, including how the discount window can—

“(I) help financial institutions better respond to rapid liquidity shortfalls; and

“(II) prevent broader financial instability; and

“(ix) the effectiveness of the discount window in light of the stigma associated with its usage, ways to reduce such stigma, and ways to improve access, operational efficiency, transparency, and timeliness of the process for financial institutions seeking advances, including on the pricing and other terms of such advances.

“(C) Remediation plan.—After the Board completes the review required by subparagraph (A), the Board, in consultation with the Federal reserve banks, shall—

“(i) identify deficiencies with the discount window and areas for enhancing discount window effectiveness; and

“(ii) develop a written plan to remediate the identified deficiencies and implement the identified enhancements, which shall include—

“(I) an identification of actions that will be taken to enhance discount window effectiveness and remediate identified deficiencies;

“(II) timelines and milestones for implementing the plan and measures to demonstrate how the implemented improvements will be maintained on an ongoing basis; and

“(III) measures of managing and controlling any deficiencies and current operations until the plan is implemented in full.

“(D) Report to congress on review and plan.—

“(i) In general.—Not later than 365 days after the date of enactment of this paragraph, the Board shall submit to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate a report containing—

“(I) the findings of the review required by subparagraph (A); and

“(II) the remediation plan required by subparagraph (C).

“(ii) Consultation.—Before submitting the report required by clause (i), the Board shall—

“(I) provide a copy of the proposed report to the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Federal Housing Finance Agency, and the Secretary of the Treasury; and

“(II) provide the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Federal Housing Finance Agency, and the Secretary of the Treasury with an opportunity to provide feedback on the report.

“(iii) Testimony.—The Chairman of the Board shall, at the semi-annual hearing required under section 2B, testify with respect to the contents of the report required under this subparagraph.

“(E) Annual reports to congress.—

“(i) Reports by the board.—The Board shall submit to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate an annual report containing a review of the effectiveness of discount window operations and a progress report on the actions taken to implement the identified enhancements described in subparagraph (C).

“(ii) Reports by the inspector general.— The Inspector General of the Board of Governors of the Federal Reserve System and the Bureau of Consumer Financial Protection shall submit an annual report to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate containing a report on the progress of the Board in implementing the remediation plan required by subparagraph (C).

“(F) Confidential report information.—Any report required under this paragraph may contain a confidential annex containing information that, if made public, could—

“(i) impact monetary policy, financial stability, or cybersecurity; or

“(ii) significantly endanger the financial stability of any financial institution.”.

(b) Sunset.—

(1) In general.—Section 10 of the Federal Reserve Act (12 U.S.C. 241 et seq.) is amended by striking paragraph (12), as added by subsection (a) of this section.

(2) Effective date.—The amendments made by paragraph (1) shall take effect on the date on which the Board of Governors of the Federal Reserve System notifies Congress and publishes on a public website of the Board that the remediation plan required under subparagraph (C) of paragraph (12) of section 10 of the Federal Reserve Act (12 U.S.C. 241 et seq.), as added by subsection (a) of this section, has been fully implemented. <all>